If you kwnew it exists, you are quite into cryptocurrencies already. Even people who know it exists tend to think that it is just “another BitCoin”, however it is not.
Bitcoin’s most powerful contribution in not the ‘coin’ side everyone is paying attention to. It’s the blockchain technology that is going to change the world.
Ethereum puts smart contracts in the blockchain, not just coins.
What does that mean? It allows to automate agreements and link transactions with events, as you would do in regular contracts but removing the need for intermediaries such as notaries. Also, thanks to the nature of the blockchain, it is virtually impossible to attack or manipulate and it’s much faster.
Bitcoin stores value, Ethereum stores value plus automated contracts.
Unlike BitCoin, it is rapidly gaining support from many organizations and official institutions. ( If you want to try, you can start mining your own Ethereum in just 5 min )
Why would BBVA or Santander embrace what looks like an immediate threat to them?
The truth is: the technology offers such a versatile and robust tool, they can adopt it and boost their platforms, or die trying to keep their old tech.
To trully understand the possibilities of Ethereum, one must go deep into the implementation of all these good-looking ideas. The following paragraphs will require a minimum technical knowledge of the processes involved. Keep reading for a quick explanation in plain terms of the key topics.
Cryptocurrencies are often seen as a tool for criminals. That is true, however, it’s equally true for cash.
Now picture an Ethereum contract: A salary is paid through the Ethereum system. It would be configured to contribute the right amount to the State’s account, send the rest to the worker, and log the transaction for tax purposes. What did we get from using the blockchain?
- No intermediaries. Instant and without increased fees.
- Secure for both parts and fully automatic.
- Fraud-free: It’s impossible to cook the books. The blockchain retains all the transactions in an immutable way.
With this perspective, it’s easier to see how some institutions find switching to crypto appealing.
After evaluating the implementation details that derive from these concepts, a via for multiplying the calculation speed (and thus mining profit) was devised and analyzed in a new article.
The Proof of Work is the algorithm that validates transactions. It needs heavy computing and pays for it to the miners. Named Ethash, it involves finding a nonce input to the algorithm so that the result is below a certain threshold depending on the difficulty. The point in PoW algorithms is that there is no better strategy to find such a nonce than enumerating the possibilities while verification of a solution is trivial and cheap.
As compensation for the calc power Mining Rewards are given out.
The successful PoW miner of the winning block receives:
- A static block reward for the ‘winning’ block, consisting of exactly 3.0 Ether
- All of the gas (cost) that took to calculate the block is compensated for by the senders.
A big file (directed acyclic graph) used by the proof of work algorithm, generated for each epoch, i.e every 30000 blocks (100 hours).
Ethash PoW is memory hard, making it basically ASIC resistant. It is designed to hash a fast verifiability time within a slow CPU-only environment, yet provide vast speed-ups for mining when provided with a large amount of memory with high-bandwidth. The large memory requirements mean that large-scale miners get comparatively little super-linear benefit. The high bandwidth requirement means that a speed-up from piling on many super-fast processing units sharing the same memory gives little benefit over a single unit. In BitCoin, quite the opposite is true.
For this reason almost all Ethereum mining is carried on GPUs. Nevertheless, as FPGA experts we have devised an architecture in which the hashing rate can be multiplied offering a more profitable operation with a fast ROI thanks to the relative hashing superiority with respect to widespread GPU implementation.
A Proof of Concept will be carried with a selected partner. Afterwards, results will be made publicly available.