Hello and welcome to this new post. In this post, I will try to explain what is Ethereum, what happened in the past, this week and what will be the future of this cryptocurrency.
What is Ethereum ?
In the post, I will talk about Ethereum but I want to be clear on one thing, I will not only talk about the crypto currency. I will speak about the ecosystem. Because Ethereum is a blockchain, an ecosystem and a crypto currency was developed for all the transactions in the ecosystem. That’s not the crypto currency and the blockchain after.
Now that this is said, what is ethereum really?
Ethereum is a decentralized global software platform powered by blockchain technology. But most people only know about the cryptocurrency associated with this decentralized ecosystem which is called ether and is the native token of this ecosystem.
The creation of Ethereum dates back to 2013 with a paper introducing the blockchain that looks a bit like the white paper associated with cryptocurrencies today. This paper introducing the Ethereum blockchain was published on 27 November 2013 by its creator: Vitalik Buterin.
You will have to wait until 2014 before you can buy your first ethers when sales start on September 2, 2014. You will then have to wait until 30 July 2015 for the Frontier network to appear. Overall, it was the Ethereum project but without any real structure yet. It was intended primarily for developers. A first improvement will take place on September 7 of the same year putting a limit to the amount of gas per transaction and per block.
Finally, on March 14, 2016, the network was released, it will be the "Homestead" network with many changes and improvements allowing it to improve even more in the future.
On June 20, 2016, the first fork of the network took place due to the draining of the DAO contract of the blockchain (Currently we can still use this network since it is the ethereum classic).
Numerous improvements and updates have taken place and still continue to take place and one of them is significant and took place a few days ago.
The MERGE
A few days ago, the biggest update of ethereum took place. This update is called The Merge.
Why this name ?
Before this update, the ethereum network used a validation system called Proof of Work. Proof of work requires ethereum users to provide a considerable amount of computing power while the work performed is easily verifiable by the receiver or a third party. In the context of ethereum, Proof of Work is used to validate transactions and mine new tokens, key tasks that require a high level of security hence the amount of work done by miners (who are paid with gas not to have to do it). And this posed some small problems, mainly energy. This is why the ethereum foundation decided to change its transaction validation system to a system called Proof of Stake. This system works like this: the ethereum user wishing to participate in the creation of new blocks or to validate transactions must own and "stake" a certain amount of tokens, in the cryptocurrency used on the network. So we have a change of system, a convergence from one system to another.
Is that good ?
This update took place on September 15 and was not necessarily well received.
The main dissatisfied are the miners since all their materials are no longer used. If there is no more need of calculation, no more need of graphic cards and money invested without return.
That's why a new fork has taken place led by the miners to keep the blockchain in Proof Of Work. This created a new ethereum called ETHPoW (ETHW) (not to be confused with WETH).
Despite this discontent, it has advantages. The Ethereum blockchain has been able to reduce its power consumption by 99% thanks to this merge. This also theoretically allows for better decentralisation and also a reduction in environmental problems due to noise, heat and power consumption of graphics cards. But the Proof of Stake system is not all advantages. Since this system would be less secure.
And AFTER ?
Many new updates are still to come for the Ethereum network. We can quote: The Surge which will sign the arrival of sharding on Ethereum. We can explain sharding by taking the example of a city, the more roads that connect it, the less congested it will be. So we will probably have cheaper and faster transactions.
Another planned update is The Purge. To understand this you need to know that someone who wants to participate in the blockchain has to download the entire Ethereum blockchain, i.e. download the entire history of the network. This includes all the blocks and therefore all the transactions since the start of Ethereum. All this data is very heavy, a few hundred gigabytes, and this should get worse with sharding since the more routes there are, the more information there is to manage between all the routes.
Finally a last update planned (the updates I'm talking about are planned but all the dates are not known) will be called The Splurge which will be a major update including all full of small fixes, changes. Like the use of Zero Knowledge Proofs which in practice makes it so that only one node that creates the block needs to run the Ethereum virtual machine and not all nodes as currently. Indeed currently each node has to run each transaction on each block.
Thanks for reading ! I hope you like it, sorry in advance if there are any mistakes (If there are mistakes, post a comment and I will fix them :).