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Things to consider before playing
Ethereum, what is it?
Ethereum, sometimes called the “Revolutionary Development of Cryptocurrencies”, is a blockchain platform created and developed by an open-source community of developers and enthusiasts. The blockchain has its own token, named Ether, and a web technology architecture that offers implementations designed on top of the platform for other apps. Presently, Ethereum has a $2.5 million annual community budget.
Why should I be involved in Ethereum?
Ethereum is a game-changer. It is what cryptocurrencies were meant to be, a “real” digital currency with applications beyond currency, and the foundation for an entirely new application layer, in addition to solving current problems.
Ethereum’s creator Vitalik Buterin is an amiable Canadian with a charismatic personality. He can easily be found on his blog and Slack, often having discussions about blockchain technology. Here are his thoughts about cryptocurrency:
One of those concepts which seems common to all of mankind, not only to those with a scientific, mathematical, or metaphysical bent, is the concept of a monetary instrument. We make monetary instruments out of wood and iron and metal, but we also call these instruments “money” in English (sometimes “gold”) and in Greek (“tetra.”). Money was often seen as a finite good: if there were more, people would want more and stop using them, and if there were fewer, people would stop using them and no more would be made. In terms of the logic of scarce goods, there is no other category of goods more closely associated with money than time: there is no good, however scarce it is, that you wouldn’t want to buy for any price. You wouldn’t sell your time for any price you can think of. The market structure of our day’s money supply is directly tied to the valuation of the items it represents: the notion that you are able to pay more for something. But that is not the way that people see things in practice. People think of money as something that can be produced more or less endlessly, and they tend to see it as something that is continuously “more scarce” and that therefore should be expensive. This is generally true, although not always so. For example, while there was a danger that foreign exchange markets would go berserk during the Cold War period, the United States was pressured to make dollar transactions at a cost that was beyond and above what it had ever paid for dollars before. It was just a case of not making an error.
It has become a lot more difficult to imagine that there is no standard to which money might be compared. Think of the famous laundry-list of characteristics, from “needs to be exchangeable” and “not involve charging an arm and a leg for things” to “a form of money that is easy to use.” What is the basic denominator that characterizes cash in these properties? One common answer is “fungibility”: what we need in our everyday lives is something that is indistinguishable from gold, and so to have value at all we need to be able to trade it like it is gold, or as close to gold as we can get, and so we should not be able to distinguish it in any useful way. With currencies, however, the problem is that the current definition of “fungible” is very weak: typically something is fungible with cash, and it is quite easy to trade them. With most of our other goods and services, we have to settle for something we call “marginal efficiency”: we can approximate the fungibility of gold with as much effort as it takes to tell a Bitcoin from a dollar, and while it is probably more efficient to use a Bitcoin as money, it’s not as good as it might be. Hence, we end up with a wide range of prices for the same good in different currencies, but few prices are as “fungible” as those of gold. A related problem is that the only sort of “fungible” good we have right now is money that is good in every currency: it can circulate around the world as easily as dollars can. It is always in demand, and is not subject to the vagaries of any single country’s economy.
In short, what we should think of as “fungible” is the sort of thing that gold is, rather than something like “Accepted by Everyone.” But we don’t really want to do this. If we insist on using “fungibility” as the measure of fungibility, we are likely to come up with prices that are out of proportion to the local market. The analogy between gold and money is a good one: gold is fungible because we can work it into any kind of bar. A dollar is not fungible, since we would buy gold for the lowest possible price if we could. And since the object of Bitcoin is not to be a good that can be worked into bars, a Bitcoin is not fungible.
So what to do?
Gold will be the principal currency in a normal economy, since it is fungible and has a reasonably steady value. In a Bitcoin economy, there would have to be a fractional reserve for each currency, and there would be no reason for the fraction to be at all correlated with the value of the economy as a whole. The rest of the considerations that go into the determination of the ratio between the supply of money and the demand for it, like stability, voluntary convergence, freedom from arbitrage, and “accepted by everyone,” will all take care of themselves. Yet there are all going to be choices to make.
Why Use Ethereum?
In almost every industry, the Ethereum network has many benefits that will cater to high-tech consumers.
Ethereum’s platform is open source and available on Github.
Ethereum also runs on a network called Etherium, a smart contract. A detailed description of the Ethereum smart contract can be found here.
Ethereum allows for the development of decentralized apps (or dapps). Such apps and dapps have their own set of underlying protocols and software which themselves are Ethereum dapps.
Because it’s built on top of the blockchain, a blockchain-based platform, every app is decentralized and no single organization has control over the platform and its protocols.
To run a dapp, all you need to do is download and install the appropriate client, install Etherium and Ethereum-based dapps on your machine, and get going.
The use of blockchain in the technologies of smart contracts gives enterprises the ability to start developing apps that easily and transparently combine all applications. This makes them less susceptible to risk because it makes them independent of the platform itself.
Blockchain-based applications also can be integrated with both enterprise systems and enterprise apps. Ethereum actually has certain software that can be conveniently used in industries. For eg, it is possible to use Ethereum to issue shares and pass funds between partners and customers.
According to a paper published by Finney.com, “Ethereum is becoming the platform of choice for blockchains as it enables sharing of value by creating platform capabilities as a separate field of the Ethereum protocol, in contrast to Bitcoin which can only be used for clearing and settlement.”
A large number of partners that need to work together to process the transactions are better at detecting problems quickly. They can tackle challenges more efficiently than a single firm. According to Huseyin Bagci, a professor at the University of Dundee, “the speed at which nodes work and the speed at which they respond to feedback is something we have not seen in other ways of managing software.”
The decentralized structure and transparent nature of blockchain technology make it easy to customize the platform for the exact requirements of an individual company. According to a Fortune Magazine article, “One benefit of blockchain is that you’re no longer confined to the protocol’s standard design.”
Are slots safe online?
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