Ethereum Mining
Ethereum Mining and Its Pros and Cons
Ethereum Blockchain has its own unique chain network and all transactions in Ethereum must be approved by the miners. For this reason, it takes some time to get the ether you have transferred to someone since the transaction must be approved by the individual miners and placed inside the Ethereum blockchain.
This process is called proof-of-work, and the miners’ job in this process is to make sure that no one cheats in the extraction process. To ensure the validity of transactions, miners are constantly solving complex calculations. If one of the miners solves the equation, the other miners check to see if his calculation is correct, and if 51% of the miners confirm the equation is valid, a new block is added to the blockchain.
This new block contains information such as all transactions made and confirmed, and also the miner who solved the equation will receive a significant reward. After the blockchain is added, the miners start solving the equations again to find new blocks and receive their reward.
Types of Ethereum mining methods
Now that you have enough information about Ethereum and its mining, it is time to get acquainted with the various methods of Ethereum extraction. In general, there are three different methods for extracting Ethereum:
- Pool mining: This method is the best extraction method.
- Mining alone: This method is very difficult and is not recommended.
- Utilizing cloud mining services: This method is also not recommended.
How to start Ethereum mining ?
To start extracting Ethereum, it is enough to go through the following steps:
Step 1: Install a strong graphics card on your computer.
Step 2: Get the right wallet. In the following, we will provide explanations about wallets.
Step 3: Install the appropriate Ethereum extraction software and join the Ethereum extraction pool.
Now you have all the necessary facilities and equipment to start the extraction.
Application of Ethereum and its Blockchain
Ethereum was one of the first platforms to offer smart contracts on its network. With the initial release of the coin in 2017, the network became very popular, and the advertisements made by many projects and companies for Ethereum and ERC-20 tokens played a significant role in increasing the global popularity of this platform.
What are the benefits of Ethereum blockchain for users?
Ethereum owns a vast range of pros which you can read about below:
- You can create complex smart contracts for supply chain management.
- You can run a variety of programs and applications, from applications to games and entertainment on your computer or phone.
- Convert any assets you want, including cryptocurrencies, fiat currencies and even precious metals, into tokens.
- Establish user authentication services, verification of identification documents.
- Exchange your assets decentrally.
- Decentralized applications and games have increased public awareness of the cryptocurrency industry, while also giving new impetus to the entertainment industry.
One of the most popular decentralized games built on the Ethereum blockchain is called CryptoKitties. This game was so popular among gamers that it was able to significantly reduce the speed of the Ethereum network.
This year, Ethereum’s decentralized financial sector has already increased Ethereum’s popularity around the world, and in addition has had a significant impact on ether prices.
Most decentralized exchanges also take place on the Ethereum blockchain. Also, most stablecoins and DeFi cryptocurrencies are built with Ethereum network support. In addition, more than 50% of all applications based on Blockchain technology are built on the Ethereum network.
Applications of Ethereum
The following are the most important applications that Ethereum and its blockchain network can represent:
Smart contracts
Smart contracts have revolutionized the way you work with traditional contracts, so you need to know as much as you can about it.
A smart contract is a simple computer program that makes the exchange of any assets easy and simple for both parties to the transaction. This may be money, stocks, real estate, or even digital assets that you want to exchange with others.
Smart contracts initially include terms and conditions for the parties. In addition, anyone can create these contracts in the Ethereum network.
One of the main features of smart contracts is that once it is implemented, it is not possible to change it at all, and any transaction that is done as a smart contract will be permanently recorded.
So even if you modify a smart contract in the future, the transactions related to the previous and original contract will not change and you cannot change the original contract.
The process of validating smart contracts is done by anonymous people in the Ethereum network, and it does not require the parties to refer to a person or persons, and thus all smart contracts in the Ethereum platform are executed in a decentralized manner.
With the help of smart contracts, the exchange of assets and currency is done in a safe and reliable way, and also the identities of both parties remain anonymous in the network.
After a successful transaction, the sender and receiver accounts are updated accordingly, and both have been able to complete valid transactions with minimal effort and time and expense.
Ethereum Virtual Machine (EVM)
Ethereum Virtual Machine is designed as an environment for developing and executing smart Ethereum-based contracts. Ethereum Virtual Machine is an engine that understands the language of smart contracts and is created in the language of solidity programming and for the Ethereum platform.
Ethereum Virtual Machine runs in a sandbox environment, in fact you can deploy your environment in this platform which can act as an environment for testing and development. You can also test your contracts as many times as you want, then when you are satisfied with the performance of the smart contract, you can deploy it in the main Ethereum network.
Every programming language that enters a bytecode through a smart contract is understood by the Ethereum virtual machine. This bytecode can also be read and executed using the Ethereum virtual machine and is one of the most popular languages for writing a smart solidity contract.
When you write a smart contract in solidity, the contract is converted to bytecode and eventually deployed in the Ethereum virtual machine, thus ensuring the security of contracts and user information against cyber-attacks.
Suppose person A wants to transfer 10 ethers to person B. The transaction is sent to Ethereum Virtual Machine using a smart contract to transfer money from Person A to Person B, and Ethereum Network will perform the proof-of-work consensus algorithm.
Ethereum network miner nodes confirm this transaction, and for these nodes it does not matter whether the identity of the parties to the transaction or the amount of money is known or not. After the transaction is confirmed, a certain amount of money is deposited from the person wallet A to the person B wallet, and during this process, the miners receive a fee for confirming the transaction. All nodes in the Ethereum network execute smart contracts using the Ethereum Virtual Machine.
Decentralized applications
To better understand the difference between Decentralized Applications and traditional applications, we want to briefly explain the two with an example. For instance, when you log in to Twitter, you will be presented with a web application that is rendered using HTML or the standard web design language.
This page contacts an application programming interface (API) to access your centrally hosted information and data, and finally the API collects your data from a centralized database.
Now, if this program or application was decentralized, the situation would be very different. If this application was decentralized, the same web application will be provided to you, but this time the application will call a smart contract-based EPI to receive your information from the Blockchain network.
Thus, the EPI is replaced by a smart contract interface, and the smart contract collects data from the blockchain network that supports it.
This blockchain network is a decentralized database in which miners verify all transactions using smart contracts in the blockchain network; so any transaction or action that takes place in an app like Twitter that has changed now would be a decentralized transaction.
Decentralized applications have a support code that runs on a peer-to-peer distributed network. These applications are not controlled or managed by any centralized system and provide direct interaction between users and decentralized application providers.
An application, when open source, is a decentralized application that uses a blockchain-based token to execute it. These applications are designed to receive decentralized backend codes, and tokens serve as fuel for these applications.
Decentralized self-governing organizations
Decentralized Autonomous Organizations (DAOs) are digital organizations that operate without hierarchical management and in a decentralized and democratic manner. Thus, the DAO is essentially an organization in which decision-making is not in the hands of a centralized authority, but in fact part of it is in the hands of certain designated authorities or designated individuals.
The organization is set up in a blockchain network that is governed by protocols embedded in smart contracts. Therefore, it can be said that his organizations need smart contracts for decision making, or in simpler terms, they need decentralized voting systems located in the organization itself for decision making and management.
Before any decision can be made, it must be done through a voting system that runs with a decentralized application. The way this organization works is that people donate funds through the DIO because the DIO needs the budget to implement and make decisions. In this way, each member is given tokens that show the percentage of that person’s shares in their ID.
These tokens are used to vote on their ID and the proposed comments are selected based on the maximum number of votes. Any decision and solution before implementation must go through this voting process within the organization.
Ethereum blockchain utilizations in today’s market
Ethereum blockchain utilizations in today’s cryptocurrency market which you should know about:
Voting systems
We have seen how his organizations use Ethereum voting systems. Voting results are publicly available, thus preventing any fraud in the results and ensuring a fair voting process.
Banking systems
Today, Ethereum is widely used in banking systems because the use of Ethereum Decentralized System reduces the possibility of virtual attacks by hackers in an incredible way. In addition, it is possible to pay and transfer money in an Ethereum-based network; therefore, banks also use Ethereum as a safe haven for remittances and payments.
Transportation of goods by the Shipping Organization
There are many benefits to using the Ethereum platform for freight transportation in the shipping organization. By this platform, goods can be easily tracked, which prevents theft and encroachment on goods. Ethereum provides tracking services for all assets in the supply chain.
Agreements
With Ethereum Smart Contracts, the agreements are executed without any changes or shortcomings. There is a lot of controversy in a company whose users are scattered and almost anonymous, and to solve this problem of companies, there is a great need for digital contracts, and Ethereum can be used as a technology for developing smart contracts and digitally registering agreements and transactions based on He used them.
Advantages and disadvantages of Ethereum
Unfortunately, there is no technology that has all the advantages and disadvantages, Ethereum is no exception to this rule, and we must remember that having these disadvantages does not detract from the advantages and performance of this platform.
Benefits of Ethereum
Ethereum is the first platform to provide developers with a friendly environment and ecosystem for deploying decentralized applications. There is a collection of toolkits, instructional videos, and articles that provide comprehensive instructions on how to build decentralized applications in the Ethereum blockchain.
In addition, the Ethereum website supports more than 30 living languages of the world and provides access to this platform for many countries and platforms. Ethereum Decentralization provides a great opportunity for users who have been waiting for such an opportunity to participate in large global networks.
Since Ethereum is decentralized, there is no center through which the network can be edited, and it is impossible to hack this platform due to the lack of a management center; therefore, the Ethereum network is a safe and secure space to achieve capital and large profits.
Ethereum’s drawbacks
Ethereum, like other platforms that use proof of consensus algorithms, faces challenges and problems, including the fact that miners need to extract large resources such as electricity and computer equipment. Also, the use of Ethereum’s proof-of-work algorithm has forced users to sometimes pay exorbitant fees.
In addition, Ethereum’s current network is only capable of processing 15 transactions per second, which is definitely not much. However, when all the preparation and switching to the stock proof consensus algorithm is ready and Ethereum is completely switched to Ethereum 2, all the current network flaws will be fixed.
In conclusion
Ethereum is an open software platform which allows clients to prepare a range of decentralised applications. Ethereum like Bitcoin, works via a public blockchain network; while Bitcoin is used to track ownership of currency, the Ethereum blockchain focuses on running the programming code of any decentralized application.
