Ethereum is a decentralized open-source blockchain system with its cryptocurrency, Ether. Ethereum also serves as a platform for other cryptocurrencies and the execution of decentralized smart contracts. Ethereum was first described in the whitepaper by Vitalik Buterin in 2013. Together with other co-founders, Buterin arranged the funding for the project in 2014, and the project was officially launched in 2015. Ethereum’s purpose is to become a global platform for decentralized operations; this platform is meant to allow users from all over the globe to design and implement software that is not prone to fraud, censorship, and downtime.
There are eight co-founders of Ethereum, which is a large number for a project. Their first meeting took place in 2014 in Switzerland. Vitalik Buterin, a Russian-Canadian, is the best known among Ethereum’s founders. He is the author of the initial whitepaper released in 2013. And even today, Buterin works to improve the functionality of the platform. Before Vitalik’s involvement with Ethereum, he wrote for the Bitcoin Magazine website. The second most important contributor is Gavin Wood. This British programmer coded the first technical implementation of ETH in C++ and proposed Solidity, ETH’s native programming language. Wood worked as a research scientist in Microsoft before Ethereum.
Ethereum is a pioneer, as it is the first blockchain smart contract platform. Smart contracts are software that allows automatic execution of the actions required to fulfill an agreement between the parties online. These contracts are meant to reduce the number of intermediaries, allowing transaction costs’ reduction while making transactions more reliable. According to Ethereum’s co-founder Gavin Wood, Ethereum’s blockchain was designed to be a sort of “one computer for the entire planet.” Besides smart contracts, Ethereum’s blockchain can host tokens by means of using the ERC-20 compatibility standard.
As of today, there are around 100 million Ethereum coins in circulation. Over 70 million of these coins were generated in the genesis block, the first block on the blockchain of Ethereum. The remaining coins were given as a reward to the miners on the Ethereum network. The reward initially was 5 ETH per block, and today it is around 2 ETH. An Ethereum block is mined approximately within 15 seconds. The main difference between Ethereum and Bitcoin is that there is no limit to the number of ETH coins.
As of today, Ethereum is secured with the proof-of-work algorithm Ethash; this algorithm belongs to the Keccak family of hash functions. However, there are plans to move the network to a proof-of-stake algorithm connected to the major Ethereum 2.0 update.
Like Bitcoin, Ethereum uses “mining” to make and distribute new coins; Ethereum 2.0 will come to end that. The people worldwide who make mining possible, a.k.a. miners, work with equipment worth millions of dollars. Miners require sophisticated machinery to have a real chance in the race of solving mathematical problems to earn ETH. The process has become a concern due to its energy-intensive consumption and its impact on the environment. But apparently, this won’t be a concern for much longer. Next year Ethereum will go under a significant upgrade that will change how it operates and how its coins are minted. So, mining Ethereum as we know it will become only a part of history.
Ethereum 2.0 is a set of upgrades that are interconnected, planned, and designed to help it become more scalable, sustainable, and way more secure. Several teams within the community have been working on building the upgrades necessary to make this happen.
Since the beginning of Bitcoin, proof of work has been the concept used to make decentralized networks safer for money transactions. In 2015, when Ethereum was launched, they adopted the same protocol. In simple terms, PoW is the algorithm, and mining is the action itself, attaching the right blocks to the chain. Now that the teams have been putting effort into changing the protocol from PoW to PoS since it requires remarkably less electricity. Another advantage of it is that it will also enable a much larger volume of transactions. It will be more secure since attacks can be prevented from happening. Finally, mining will be completely turned off when the PoW and PoS chains are merged, and Ethereum 2.0 is all in. According to Tim Beiko, Ethereum developer, this can possibly happen before next year ends.
Experts say it will not be such a big problem; once the merge has been completed, they believe that miners will go for either one of two easy choices. Once Ethereum 2.0 starts operating entirely, there will be divided opinions about which way to go. The most obvious options are Ravencoin with a market cap of $436 million and Ethereum Classic with $4.7 billion. Another significant change is the way miners get paid; no more transaction fees will go to them, only the newly minted coin as a reward. Although not all of them will endure, those who will keep mining ETH will have it since they will become easier to obtain.
If it’s true that the news about Ethereum 2.0 is a matter of public domain, not everybody involved has done something about it. Some might have done more or even better than others to prepare for the change. It’s also true that some pools have stated their position against the merge, which also impacts the general opinion of the public, traders or not. If Ethereum 2.0 can deliver all that has been promised, it’s still yet to be seen. Although one thing is for sure, if they succeed, this will imply an astronomical jump for the protocol that could potentially cause a chain reaction with other protocols of the exact nature, but what would happen with the PoW protocols? That is still left to be determined.
When we talk about Solana, we’re talking about an exceptionally functional project of open source based on blockchain technology. In simple terms, it relies on the technology’s nature of being permissionless to supply solutions to DeFi. Its protocol is meticulously outlined to make the creation process of decentralized applications easier. Its main goal is to upgrade scalability by using the PoH and PoS of the blockchain. Due to its hybrid design, it got the attention of new traders and institutional investors. Also, the central focus of the Foundation of Solana is to make DeFi accessible on a more significant scale.
Even when the idea of it and the first efforts on the project began back in 2017, it was until March 2020 it was launched. The headquarters of the Solana Foundation was established in Switzerland, in the city of Geneva.
The most significant person behind the project is Anatoly Yakovenko, who started his career at Qualcomm. There, in 2015 he moved fast up the ranks and got to the position of Senior Staff Engineer Manager. After that, he got a new job at Dropbox, this time as a Software Engineer. By 2017, Yakovenko was already working on a project that would later be known as Solana. It was with Greg Fitzgerald with whom he chose to team up; together they founded Solana Labs. While working on it, they attracted more former colleagues from Qualcomm and finally released the protocol and the SOL token to the public in 2020.
One of the most significant differences to the game is the PoH consensus that Anatoly Yakovenko developed. The concept enables higher scalability, which at the same time improves usability. The protocol is well known in the crypto space due to its fantastic fast time to process blockchain offers. Being hybrid allows a remarkable decrease in the time of validation for the execution of contracts and transactions.
It’s been announced by the Solana Foundation that a total of 489 million tokens (SOL) would be put in circulation. A bit more than 206 million of those have been released to the market already. Its distribution goes as follows:
The rest of the coins were already distributed for private, and public sales or are about to be released.
The protocol relies on a mix of PoH and PoS mechanisms of consensus. The first being the one responsible for the number of transactions processed. The second is used to monitor the PoH process and validate the sequences of blocks created by it. The mix of both mechanisms is what makes it so unique in the industry.
Chainlink is a layer of blockchain abstraction that allows smart contracts to be connected universally, it enables blockchains to interact in a secure way. That happens with data feeds from the exterior, different payment methods, and events. That provides essential information needed by complex smart contracts to develop into the predominant configuration of digital agreements. The Network for Chainlink is mainly driven by a community of data providers, operators of nodes, researchers, developers of smart contracts, and so on. The company’s primary focus is to ensure that decentralized participation can be guaranteed for all the operators of nodes and all users who look to make contributions to the network in general.
Chainlink was co-founded in 2017 by Sergey Nazarov, who is also CEO of Chainlink Labs. Nazarov has a degree in business administration from the University of New York. In 2009 he co-founded ExistLocal; in 2014, he was a co-founder of CryptaMail. He also joined forces with Steve Ellis and launched SmartContract, which led Nazarov to start Chainlink. Steve Ellis has a computer science degree from New York University. He was a software engineer at Pivotal Labs, and in 2014 he founded the Secure Asset Exchange.
This is one of the networks that allowed the incorporation of off-chain info into smart contracts for the first time. Chainlink has become a significant player when it comes to data processing. In recent years it has been attracting the attention of different data providers, such as Brave New Coin, Huobi, and Alpha Vantage. Data providers can monetize the data they possess by selling access directly to Chainlink. Since it’s a network that’s not centralized, it enables users to be operators and earn some revenue by running an infrastructure of data that is mandatory for the success of blockchains.
Since the beginning of it, Chainlink announced that there would be a total maximum supply of 1,000,000,000 tokens of Link. The collection at the moment of writing this article is around 419,009,556 of Link tokens, about 42%.
It is secured by the mechanism of proof-of-stake (PoS), which relies on the total of stacked tokens to select validators. The protocols of PoS were created to help with the power consumption issue, plus they’re scalable in an easy way. Now that PoW has proven itself to be a reliable mechanism, a vast variety of ERC-20 tokens have grown fast, marking trends in the space.
Uniswap is a trading protocol that has become popular for being decentralized. It’s also known for participating as a facilitator of trading tokens of decentralized finance that is automated. The main goal for it is to maintain automated trading of tokens and keep it open for everyone with tokens. Uniswap solves the issues of liquidity by implementing automated solutions. This trading protocol also has its own token, called UNI, taking it a step further in September 2020.
The leading creator of the platform is Hayden Adams, also known for being the developer of Ethereum. He was known for working on some successful projects at the same time. Vitalik Buterin, a creator of Ethereum, announced Adam’s work, who claimed that inspiration came from one of Buterin’s posts. The thought of focusing on Ethereum came because of a friend trying to convince him to research the protocol in 2017.
Its main goal is to create liquidity, which also creates more trading and the prices that it provides for the DeFi field. The protocol works by implementing a formula for exchange that is automated. This is not just another decentralized exchange; it tries to present solutions for issues that many platforms experience regarding liquidity. By automating the process of market-making, the protocol motivates the activity by restricting the risk and lowering fees for everyone involved.
The total issuance of the token is 1 billion units. All of those will be available in a time frame of four years, once Uniswap launches a rate of perpetual inflation of 2% to keep the participation of the network. Currently, 60% of Uniswap belongs to users, 21.51% to team members, 17.8% to investors, and 0.60% to advisors.
This is a protocol that is decentralized for trading, and UNI is its governance token. Since it is an ERC-20 token, it means that to function, it needs Ethereum. In other words, it’s defined by a set of rules created for tokens, as well as many considerations of security, directly related to the network of Ethereum.
Polkadot is a protocol of open-source sharding used mainly to facilitate data, assets, or token transfers. It tries to establish through interoperability a private net operated by the users. That makes the process of creating new applications and services significantly more straightforward. This protocol links private and public chains, networks, and other technologies. The previous permits blockchains to be independent of sharing information and performing transactions. That, via the Polkadot relay chain. Its main four elements are Relay Chain, Parachains, Parathread, and Bridges.
The Swiss Foundation, Web3 Foundation, wanted to facilitate a decentralized net that would be functional and friendly to the user. All of that, as a project of open source, which is why they founded Polkadot. The three principal founders are Dr. Gavin Wood, Robert Habermeier, and Peter Czaban. The first one being the most famous out of the three due to his participation as Ethereum co-founder, among other big tech projects. All three of them have experience in very specialized fintech industries.
Starting with the main reason, it can process many transactions in parallel in multiple chains. Processing in parallel equals scalability improvement. Another advantage is how fast custom blockchains can be connected to the network of Polkadot. It also has a high capacity to adapt, being flexible and allowing information to be shared. Therefore, the user gets the feeling similar to using apps on a mobile device.
Currently, it has an issuance of 1 billion DOT tokens. In August 2020, the network had a redenomination that was purely undertaken to steer clear of small decimals. That move only helped to make its calculation way easier. Although balances increased by a factor of 100, it did not impact the DOT distribution or the shares of the holders.
It has a system user-driven, highly sophisticated that helps to secure it. Therefore on the user’s needs, entire communities have the opportunity to customize their blockchains. That and having many validators help ensure its blockchains on multiple levels, and it also allows them to scale their transactions.
When we mention the USD Coin or USDC, we’re talking about a stablecoin that’s directly linked to the USD on a 1:1 reference. That means that for every USDC issuance, there is a backup of $1 that’s being held in reserves. That is in a blend of US Treasury bonds and cash. This currency is issued by institutions that are financially regulated. And mainly, it is thought of as a new era in which transactions without cash are more and more common daily. One of its main uses is providing a safe haven for traders that work with cryptocurrency.
The co-founders behind the Circle Consortium are Sean Neville and Jeremy Allaire. The project started in October 2013. The Circle Consortium has a platform for mobile payment that enables the users to send, receive and hold regular currencies. The British government granted Circle, in April 2016, the licensing of the first virtual currency. In December of that same year, it also started operating as a wallet service for Bitcoin to buy and sell the currency.
When it comes to cryptocurrency, transparency is one of the main concerns users have to deal with. So, them being able to take 1 USDC for 1 USD makes a world of difference in trust. To do that, an important accounting company is in charge of ensuring that the cash levels in reserve as backup match the number of coins issued. This, in combination with USD Coin, achieves compliance with regulation and helps with the plans for international expansion.
In theory, the amount of USDC that can be issued is unlimited. The demand is what determines the number of new coins to be created, as long as it has the backup in reserve. Certain factors helped with the popularity of USDC, such as the growing interest in decentralized finance.
The fact that it can be integrated with applications based on Ethereum is probably one of the most significant advantages. And as mentioned before, the currency is backed up by reserves in USD, which is mainly what makes it safe and trustworthy.
Also known as “DOGE,” Dogecoin is a digital open-source currency that is based on the Internet meme featuring a Shiba Inu. It’s an entertaining, enjoyable cryptocurrency with a greater allure as it is based on a meme of a dog.
In many ways, it is different from the usual proof-of-work protocol of Bitcoin. One of these differences is the use of Scrypt technology. The total supply of the altcoin is uncapped, which translates to there not being a limit to the amount of coins that can be mined. A participant can mine on Mac, Linux, or Windows.
It was released in December 2013, initially as a joke to make fun of the constant growing speculation everywhere about crypto at the time. Its creators, Billy Markus and Jackson Palmer, software engineers, promote the currency as a “fun and friendly internet currency” because of its origins. Another key participant in the growing success of the coin is the CEO of Tesla, Elon Musk, who constantly mentions it or talks about it. He mainly does it on his Twitter account, which makes it more prevalent in a significant way. After posting on social media that this is his preferred coin, the currency became popular.
So far, it has been used to tip people producing or sharing content of quality. It is possible to tip Dogecoin to a group of people that uses cryptocurrency. There are websites called “faucet” where you could get some Dogecoin for free. This to interact with Dogecoin groups or communities.
It is possible to buy or sell it at any trade where digital currency is available. Also, to save it in a wallet for Dogecoin. Also, through communities in which it is accepted.
Since its release in 2015, Cardano has been a platform based on a specially sketched proof-of-stake blockchain protocol for consensus called Ouroboros. This permits ADA, its token, to be received and sent securely and simply. All the time while making sure the smart contracts on the blockchain of Cardano are safe.
With his background in mathematics and experience with cryptocurrencies since 2011, Charles Hoskinson is the founder of Cardano. His first involvement in the industry, professionally speaking, didn’t happen until 2013. Then he created a very successful lecture about Bitcoin that was attended by thousands of students. He also participated as one of the co-founders of the network for Ethereum.
When comparing other decentralized blockchain platforms with similar aspirations and goals, such as creating new tools and protocols, Hoskinson understood the need for a different type of blockchain. It should be secure, scalable, durable and stable. This significantly improves the chances of foreseeing a potential pitfall because it can dispute daring ideas before being validated. In 2020 it had an upgrade that focused on making its blockchain even more decentralized by 50-100 times more than others. This would allow many other assets to be available on its network.
At the time of writing this article, there was a circulation of a bit more than 31 billion ADA. In total, there’s a maximum supply of 45 billion. When the network was launched, 2.5 billion ADA were assigned to IOHK, and 2.1 billion to Emurgo, the company in charge of the Cardano protocol. Additionally, 648 million ADA were granted to the Cardano Foundation. Its goal is to promote the platform and grow volumes of adoption.
The platform is secured through Ouroboros, which is a proof-of-stake protocol. It claims to be more energy efficient than others like Bitcoin, requiring about four times less energy, due to the fact that Ouroboros main goal is to obtain the kind of growth that is ethical and sustainable in the long run. It’s been described as a distinctive merge between technology and mathematically verifiable processes, a mechanism in which participants are rewarded for getting involved.
Binance, launched in July 2017, is a global cryptocurrency exchange. Its aim is to bring the crypto exchange to the foreground of global financial activity. Besides being the most important crypto exchange in the world, Binance introduced a whole ecosystem of functionalities for its audience. The network of Binance includes Academy, Binance Chain, Research Projects, and Trusted Wallet. All these products are powered by blockchain technology to start a new era of finance in the world. Most of the Binance projects involve the cryptocurrency Binance Coin; this coin is an integral part of their successful functioning.
The CEO and founder of Binance is Changpeng Zhao. He joined Bloomberg as head of tradebook futures advancement in 2001. He worked for the company for four years, and after that, Zhao become an investment partner at Fusion Systems. For ten years now, Zhao has been closely involved with cryptocurrencies and blockchain technology. Since 2017, he has been the CEO of Binance after he successfully launched it.
Binance is a one-of-the-kind ecosystem of blockchain-based decentralized networks. In many countries, Binance has become the leading crypto exchange and, while the company’s side organizations are of significant interest to many as well. Binance’s drive for development is one of the company’s most outstanding advantages. The company’s initial purpose was a crypto exchange, although today it has progressed in a number of different spheres. On their website, they mentioned that their goal is to be the infrastructure services provider for the whole blockchain ecosystem. The company also benefits from increased investor interest in Binance Coin. There was a significant price surge at the beginning of 2021, which placed the coin on the map of cryptocurrency investors.
Currently, in circulation, there are 153,432,897 BNB coins out of the total amount of 170,532,785. At first, the coin was among the many tokens run on the Ethereum blockchain. However, later on, the company presented its own blockchain; the coins are secured by BFT (Tendermint byzantine-fault-tolerant) consensus mechanism and are issued from the Binance blockchain.
Tether is a cryptocurrency of stable value, also called stablecoin, that is issued by a company based in Hong Kong and it reflects the price of the USD. The relation between the token with the USD is accomplished by keeping a certain amount of US dollars in the reserves that is the same as the amount in circulation of USDT.
USDT was first launched in 2014 as Realcoin, by Brock Pierce, Craig Sellars, and Reeve Collins. Brock Pierce has also been involved in other major projects, he became the director of Bitcoin Foundation and he co-founded Block.one. Craig Sellars has been part of the Omni Foundation for several years, his participation has allowed users to create smart contracts based on properties and currencies. Reeve Collins, who was CEO of Tether for two years, has also co-founded several successful tech-related companies.
Tether has a unique feature: the ability to guarantee its value to be attached to the USD. According to its policy, Tether assigns the same amount of US dollars to its reserves every time it issues new USDT tokens, which protects it from the high volatility on the crypto markets.
There is no limit to the issuance of USDT and in theory it is limited only by its own policies, but since it is supposed to have a backup in USD, the total amount of tokens depends on the company’s cash reserves. According to the company, as of September last year, the total of tokens in circulation is over 14.4 billion USDT, backed up by $14.6 billion in assets.
Although Tether doesn’t have its own blockchain, it is secured by the hashing algorithms of Bitcoin, Ethereum, Algorand, EOS, Bitcoin Cash, Tron and OMG, since it works as a second layer token that’s on top of those cryptocurrencies blockchains. To learn more about how to invest safely on crypto, click here.