اثيريومتم تحديثه Why are we investing in Ethereum?
As price makes lower lows and seems to crash without a end, it's easy to forget fundamentals and why we invested in the first place.
Many entered the market for a quick buck but had no clue in what they were investing.
As the broad audience of crypto buyers are most likely not traders and don't have a long term perspective.
"I wish i bought more"
"I wish i sold earlier"
They placed it all on the line and have now lost considerable amount of their net worth - those willing to risk it all.
So why are we investing in Ethereum?
Right now there are so many bullish things happening around this project, but it's not reflected in the price.
FUNDAMENTALS
Ethereum has a far greater value than it is valued right now.
Quote from Darren Langley, Kobi Gurkan and Lukas Schor (medium articles):
Ahead of us we have Ethereum 2.0
Proof-of-stake (Beacon Chain, Casper FFG)
Sharding
eWASM
Once delivered, Ethereum 2.0 will support massive on-chain transaction throughput, while balancing decentralisation and security. With this foundation, Ethereum has the potential to be:
A key piece of infrastructure for the world’s transfer of value;
A platform for new economic systems;
A hub for global collaboration;
Sharding
Sharding is how Ethereum will realise the performance gains necessary to scale.
Every machine that runs the Ethereum blockchain has to process the transactions in sequence. These transactions cannot be processed in parallel, despite being run on thousands of machines. So from a scalability perspective, the current Ethereum blockchain is a single pipe that all transactions have to be pushed through. Sharding is like adding X number of additional pipes to take more transactions.
In reality, each shard is a separate blockchain with its own state (account balances, smart-contracts) and transaction history. What makes sharding different to just a bunch of blockchains, is that they all share the same proof-of-stake consensus with the beacon chain. The registered validators on the beacon chain will become a global pool of validators, that validate blocks of transactions on the beacon chain and the shards. To break the consensus protocol of one shard you have to break the protocol for the whole lot.
What is Plasma?
Ethereum Plasma introduced a novel scaling solution that could enable Ethereum to reach many more transactions per second than currently possible. Like payment channels in the Bitcoin Lightning Network, Plasma is a technique for conducting off-chain transactions while relying on the underlying Ethereum blockchain to ground its security. Thus, Plasma can be categorized to the increasing group of “off-chain” technologies which also includes state channels and Truebit. While solving different problems, they all take operations away from the Ethereum “main chain” and are performing them “off chain” instead. Still, these techniques sufficiently guarantee a certain level of security and finality.
But Plasma takes this idea even further by allowing for the creation of “child” blockchains attached to the “main” Ethereum blockchain. These child-chains can even spawn their own child-chains, which can themselves have another set of child-chains etc. So Plasma is basically many branching blockchains linked to one root blockchain.
Ethereum will continue to handle smart contracts in a similar way to how they are handled currently, except it will only broadcast completed transactions to the public Ethereum chain. Think of it as a hierarchical tree of side chains that periodically transfers information back to the main-chain.
As a result, more complex operations can be performed on the child-chain than possible purely on the main chain, allowing developers to run entire applications with thousands of users. This Plasma-chain can operate at faster speeds and lower fees than the main chain, as they do not need to be replicated across the entire Ethereum blockchain.
Why is Plasma necessary?
Cryptocurrency’s future real-world application and feasibility rely on the technology’s scalability. Unfortunately, in its current state, the two major blockchains, Bitcoin and Ethereum, are still fairly limited in the amount of transactions that can be processed in a given time. This results in cases where a single application can bring the network to its knees. A common example how these scalability issues are limiting blockchain’s competitiveness with centralized systems is the comparison with VISA. While the popular credit card provider is handling up to 2’000 transactions per second, Ethereum is currently capped to roughly 15 transactions per second.
Zero-knowledge proofs
Zero-knowledge proofs (ZKPs) allow a verifier to pose a question to a prover, and the prover answers this question, using whatever private data needed to answer it, revealing nothing more than the answer to the question itself.
An example of a question a verifier could pose is “do you know the solution to the following Sudoku puzzle?”. Obviously, the prover who knows the solution can show the solution itself. This prover, though, would like to keep the solution secret for now, but convince the verifier that they do know the solution. The prover can use a zero-knowledge proof to just answer “yes”! The cryptographic proof also serves for convincing the verifier that the right question was used on the right data and no one altered the result.
Many entered the market for a quick buck but had no clue in what they were investing.
As the broad audience of crypto buyers are most likely not traders and don't have a long term perspective.
"I wish i bought more"
"I wish i sold earlier"
They placed it all on the line and have now lost considerable amount of their net worth - those willing to risk it all.
So why are we investing in Ethereum?
Right now there are so many bullish things happening around this project, but it's not reflected in the price.
FUNDAMENTALS
Ethereum has a far greater value than it is valued right now.
Quote from Darren Langley, Kobi Gurkan and Lukas Schor (medium articles):
Ahead of us we have Ethereum 2.0
Proof-of-stake (Beacon Chain, Casper FFG)
Sharding
eWASM
Once delivered, Ethereum 2.0 will support massive on-chain transaction throughput, while balancing decentralisation and security. With this foundation, Ethereum has the potential to be:
A key piece of infrastructure for the world’s transfer of value;
A platform for new economic systems;
A hub for global collaboration;
Sharding
Sharding is how Ethereum will realise the performance gains necessary to scale.
Every machine that runs the Ethereum blockchain has to process the transactions in sequence. These transactions cannot be processed in parallel, despite being run on thousands of machines. So from a scalability perspective, the current Ethereum blockchain is a single pipe that all transactions have to be pushed through. Sharding is like adding X number of additional pipes to take more transactions.
In reality, each shard is a separate blockchain with its own state (account balances, smart-contracts) and transaction history. What makes sharding different to just a bunch of blockchains, is that they all share the same proof-of-stake consensus with the beacon chain. The registered validators on the beacon chain will become a global pool of validators, that validate blocks of transactions on the beacon chain and the shards. To break the consensus protocol of one shard you have to break the protocol for the whole lot.
What is Plasma?
Ethereum Plasma introduced a novel scaling solution that could enable Ethereum to reach many more transactions per second than currently possible. Like payment channels in the Bitcoin Lightning Network, Plasma is a technique for conducting off-chain transactions while relying on the underlying Ethereum blockchain to ground its security. Thus, Plasma can be categorized to the increasing group of “off-chain” technologies which also includes state channels and Truebit. While solving different problems, they all take operations away from the Ethereum “main chain” and are performing them “off chain” instead. Still, these techniques sufficiently guarantee a certain level of security and finality.
But Plasma takes this idea even further by allowing for the creation of “child” blockchains attached to the “main” Ethereum blockchain. These child-chains can even spawn their own child-chains, which can themselves have another set of child-chains etc. So Plasma is basically many branching blockchains linked to one root blockchain.
Ethereum will continue to handle smart contracts in a similar way to how they are handled currently, except it will only broadcast completed transactions to the public Ethereum chain. Think of it as a hierarchical tree of side chains that periodically transfers information back to the main-chain.
As a result, more complex operations can be performed on the child-chain than possible purely on the main chain, allowing developers to run entire applications with thousands of users. This Plasma-chain can operate at faster speeds and lower fees than the main chain, as they do not need to be replicated across the entire Ethereum blockchain.
Why is Plasma necessary?
Cryptocurrency’s future real-world application and feasibility rely on the technology’s scalability. Unfortunately, in its current state, the two major blockchains, Bitcoin and Ethereum, are still fairly limited in the amount of transactions that can be processed in a given time. This results in cases where a single application can bring the network to its knees. A common example how these scalability issues are limiting blockchain’s competitiveness with centralized systems is the comparison with VISA. While the popular credit card provider is handling up to 2’000 transactions per second, Ethereum is currently capped to roughly 15 transactions per second.
Zero-knowledge proofs
Zero-knowledge proofs (ZKPs) allow a verifier to pose a question to a prover, and the prover answers this question, using whatever private data needed to answer it, revealing nothing more than the answer to the question itself.
An example of a question a verifier could pose is “do you know the solution to the following Sudoku puzzle?”. Obviously, the prover who knows the solution can show the solution itself. This prover, though, would like to keep the solution secret for now, but convince the verifier that they do know the solution. The prover can use a zero-knowledge proof to just answer “yes”! The cryptographic proof also serves for convincing the verifier that the right question was used on the right data and no one altered the result.
ملاحظة
Companies involved in ethereum entethalliance.org/members-directory/
ملاحظة
Issuance of Ether will be cut, increasing it's value....Network update is close as well
medium.com/@ewanpj/the-duldrums-2b0585387202
ملاحظة
Quote from article above;In summary, Ethereum is still in a strong position and is at a significant discount at sub $200 levels when considering future upgrades to the protocol. Reasons to be bullish include:
Near-term issuance reduction
The rollout of financial products: A possible Bitcoin ETF approval, Ether Futures
Casper Proof-of-Stake around Q4 2019 (give or take 6 months)
ملاحظة
Why Ethereum wants to use PoS?The Ethereum community and its creator, Vitalik Buterin, are planning to do a hard fork to make a transition from proof of work to proof of stake.
But why they want to switch from one to the other?
In a distributed consensus-based on the proof of Work, miners need a lot of energy. One Bitcoin transaction required the same amount of electricity as powering 1.57 American households for one day (data from 2015).
And these energy costs are paid with fiat currencies, leading to a constant downward pressure on the digital currency value.
In a recent research, experts argued that bitcoin transactions may consume as much electricity as Denmark by 2020.
Developers are pretty worried about this problem, and the Ethereum community wants to exploit the proof of stake method for a more greener and cheaper distributed form of consensus.
Also, rewards for the creation of a new block are different: with Proof-of-Work, the miner may potentially own none of the digital currency he/she is mining.
In Proof-of-Stake, forgers are always those who own the coins minted.
How are forgers selected?
If Casper (the new proof of stake consensus protocol) will be implemented, there will exist a validator pool. Users can join this pool to be selected as the forger. This process will be available through a function of calling the Casper contract and sending Ether – or the coin who powers the Ethereum network – together with it.
ملاحظة
Proof of Work vs Proof of Stake: ConclusionThanks to a PoS system validators do not have to use their computing power because the only factors that influence their chances are the total number of their own coins and current complexity of the network.
So this possible future switch from PoW to PoS may provide the following benefits:
Energy savings;
A safer network as attacks become more expensive: if a hacker would like to buy 51% of the total number of coins, the market reacts by fast price appreciation.
Quotes from both posts about PoS;
blockgeeks.com/guides/proof-of-work-vs-proof-of-stake/
ملاحظة
Fundamentals aside;"The collapse is simply the euphoria stage of the bears."
mobile.twitter.com/ErikVoorhees/status/1066505654100094977?s=20
ملاحظة
Devcon4 Keynote - Vitalik Buterin (Ethereum 2.0)youtube.com/watch?v=Km9BaxRm1wA
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