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What is Ethereum?

what is ethereum

What is Ethereum?

Ethereum is an open software platform for decentralized applications (Dapps), allowing developers to build smart contracts and distributed applications and execute them, mitigating fraud, downtime or control by a third party. It is akin to programming language run on the blockchain.

One of its aspects is its own virtual currency, Ether. Ether is used for two main purposes: it is a digital currency like other cryptocurrencies and is also used within the platform to run applications and to monetize work. Ether is used by the application developers to make any kind of payment in the Ethereum network.

Smart contract

A smart contract is more or less like a self-operating computer code facilitating the exchange of money, shares, property or any unit of value. It can store information about an application such as domain registration and other membership details, provide utility to other contracts, manage agreements between users and function as “multi-signature” account so that funds are spent only upon the agreement of a certain percentage of people.  It is theorized that smart contracts will replace all kinds of contractual agreements at some point, as their implementation provides a level of security superior to any traditional contract law, also reducing transactions costs associated with these contracts. Thus, they establish trust between parties and reduce the overall costs.

Benefits of a decentralized Ethereum platform

  • A third party is not involved, preventing changes to data by intervention.
  • Censorship is avoided with the strong network formed around the principle of consensus. Consensus means all nodes in a particular system must comply with any change made in a system.
  • With the help of cryptography, applications are secured from hacks and frauds.
  • Apps never go down as they are being run by thousands of volunteer computers across the globe.
  • Cuts out middlemen and expenses associated with them.

Disadvantages of Ethereum

  • The code for smart contracts may have errors, giving hackers an opportunity to exploit the code. In such a case, the underlying code has to be rewritten on reaching a consensus but this goes against the very idea of making the Ethereum blockchain an immutable ledger.
  • The transactions are stored on the nodes. The problem is that with the increase in transactions, the developers are trying to increase the size of the nodes, which will consequently kick people off the network. Running a full node allows users to take advantage of privacy and security. Thus, denationalization and scalability are currently at odds.

Scope of improvement

  • There should be more focus on technical issues and security improvement to prevent disruptions of code which has a direct impact on the value of Ether and the public belief in Ethereum.
  • Sharding is a recommended possible implementation. It means moving away from full nodes. Thus, each node stores only a part of the data and verifies the transactions and if it requires information of transactions which it does not store, it approaches the node which has the data for the respective transaction.
  • Transactions can be made off-chain via micro-payment channels, which means, either party can kick the transaction to the blockchain any time they want, giving both parties a chance to end the interaction.

A comparison between Ethereum and Bitcoin

While Ethereum and Bitcoin are two vast projects which seem very similar, they are truly similar only in the cryptocurrency aspect. Bitcoin is a project which focuses solely as a means of payment and store of value, and has successfully established stability by being the most-used cryptocurrency enjoying robust development to date. Ethereum, on the other hand, has a wider scope as it is a multipurpose platform, with Ether being just one aspect of its multiple smart contracts. Therefore, the Bitcoin blockchain is mainly used to track the ownership of bitcoins while the Ethereum blockchain is focused on running Dapps.

Conclusion

Some experts believe that in the coming years, Ethereum will have the potential to completely revolutionize services and industries which have been operating for hundreds of years. The abundance of projects attempting to tokenize services and industries via Ethereum-based tokens shows a strong demand for a platform that makes it relatively easy to crowdfund or tokenize ideas. Its long-term success will rely much on how it handles scaling solutions, with an ongoing Constantinople hard fork making a major switch in algorithm.

On the other hand, others believe that Ethereum’s limitations will mean that it will not outlast other competing platforms, whose development teams appear to be more flexible and agile in responding to market demands and learning from Ethereum’s flaws.

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Fidelity Bitcoin Custody Service Coming in March

Fidelity Bitcoin Custody Service Coming in March

Multinational financial services corporation Fidelity Investments is reportedly giving itself a March deadline to launch its Bitcoin custody service. Bloomberg reports three people familiar with the matter confirmed the March target, although the sources were not named.

The cryptocurrency custody solution is being developed to service the much anticipated institutional investors entering the market; retail investors will be unable to access the service when it does launch.

The cryptocurrency storage service was first announced in October last year, with Fidelity betting it is only a matter of time before Wall Street investors move to the cryptocurrency market. CEO Abigail Johnson said at the time: “Our goal is to make digitally native assets, such as Bitcoin, more accessible to investors.”

Johnson has advocated in favor of cryptocurrency for years, introducing Bitcoin and Ethereum mining at Fidelity in 2017. Clients have also been able to access balances from their Coinbase accounts on the website for several years.

The sources also disclosed to Bloomberg that an Ether custody solution would be the next focus for the firm.

Fidelity Investments administers over USD 7.2 trillion in customer assets and is based in Boston, USA.

 

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BitMEX CEO: Bitcoin Is Society’s Best Hope for a Private Form of Electronic Money

BitMEX CEO_ Bitcoin Is Society’s Best Hope for a Private Form of Electronic Money

BitMEX CEO Arthur Hayes has spoken out in favor of Bitcoin, saying that the hallmark cryptocurrency is “society’s best hope for a private form of electronic money.”

The company is a cryptocurrency exchange and derivative trading platform. It is owned and operated by HDR Global Trading Limited, which is registered in Seychelles and has offices worldwide.

In a blog post published before the weekend, Haye’s latest thoughts on the industry entitled ‘Two sides of the coin: the bifurcated near-future of money’ suggested that the future of Bitcoin is ensured, commenting:

“Even in the face of the various centralized forces currently being marshaled: humanity’s bifurcated monetary future will be better than our monopoly monetary past, as some money becomes more convenient while other money becomes far more private.”

Hayes further suggested that until now, monetary systems had been dominated by monetary monopoly and a bifurcated system with Bitcoin representing the cryptocurrency industry would be the best hope for the future, despite the proliferation of alternatives such as Ether, Ripple, and others.

According to the BitMEX boss, another advantage that Bitcoin possesses when squared up against others is its security, having never been successfully hacked in its ten years of use. Painting a rather utopian picture of a background in which cryptocurrency can flourish, he went on to say that he felt Bitcoin could create an environment where individuals can work together towards a common end.

Hayes’ positive comments were made only weeks before he expressed his views about Bitcoin at the end of 2018, suggesting that it would continue its volatile bearish trend in 2019.

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1 in 3 Millennials View Bitcoin as Currency of Choice for Freelancers

1 in 3 Millennials View Bitcoin as Currency of Choice for Freelancers

The results of a recent survey into the preferences of American freelancers by P2P platform Humans.net has revealed that 29% of professionals in the US would be happy to receive either a full or part salary payment in cryptocurrency.

Among the 1,100 US respondents in the survey were self-employed professionals such as self-employed writers, tutors, designers, and developers, of which 4% were already in receipt of some form of salary, in either Bitcoin or Ethereum.

Some 18% of the respondents, who were chosen randomly and not pre-screened prior to selection, said that they would prefer to be paid in Bitcoin or another digital currency over a fiat salary. An additional 11% said that we would not be averse to some kind of partial payment comprising both cryptocurrency and fiat. This resulted in a 29% thumbs-up among survey respondents for some kind of crypto salary.

The age group of freelance professionals in this field is generally millennials based, such is the nature of innovation and design in fintech, attracting many college leavers. A new Clovr survey of investment potential, conducted in October, positioned high-earning millennials at the center stage when it comes to owning cryptocurrency.

These latest figures confirm the results of other surveys conducted this year, showing that it is millennials with money who appear to be taking on cryptocurrency in ever-increasing numbers. This is partly due to the lack of investment options in tradition areas. The Clovr study shows that it is those with annual incomes of between USD 75,000 and USD 99,999 that have become serious investors.

The number of those self-employed professionals looking toward a Bitcoin-based salary was illustrated by another recent survey conducted by British tech company, Sage, that highlighted the fact that across the Atlantic UK freelancers were also keen to receive some kind of crypto-fiat salary payment. The UK survey of 1,000 suggested that similar to the US survey, 31% of Brits would also go for a Bitcoin salary payment should it be offered. Darren Francis, who commissioned the survey commented:

“It’s interesting that more people were leaning towards the “all-in” option; having their sole or dominant income paid to them in cryptocurrency.”

The one emerging fact from the two surveys is that the dip in the value of Bitcoin over past weeks has done little to dampen millennials’ enthusiasm for acquiring the digital currency during this period of market instability, whether it be as part of their salary or a simple purchase. Bitcoin at time of writing is priced at USD 3,884.41 on CoinMarketCap.

 

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Google CEO’s 11-Year-Old Mines Ether at Home

It seems like Google’s boss has a son with secret designs on the crypto world after telling his dad that he was mining Ether at home.

It appears that Google’s CEO Sundar Pichai’s 11-year-old son has his father’s entrepreneurial gene. Speaking at the New York Times DealBook conference last week he let slip that his son used the family computer to mine crypto. He commented:

“Last week I was at dinner with my son, and I was talking about something about Bitcoin, and my son clarified what I was talking about was Ethereum, which is slightly different,” Pichai said. “He’s 11 years old. And he told me he’s mining it.”

It seems that Google top brass have the mining bug after company co-founder Sergey Brin’s admission earlier this year that he was also mining Ethereum with his son at home. It seems that the kids are pretty up to date on the latest cryptocurrency tech details too, as Pichai admitted he had been corrected by his son when they were chatting about Bitcoin recently. Brin revealed:

“A year or two ago, my son insisted that we needed to get a gaming PC…I told him, ‘OK, if we get a gaming PC, we have to mine cryptocurrency.’ So we set up an Ethereum miner on there, and we’ve made a few pennies, a few dollars since.”

The Google boss was discussing his views on screen time for children in relation to a recent New York Times article about Silicon Valley technicians’ families and tech addiction among children. It appears that the computer his son was mining on was actually built by his dad.

“I’m like every other parent I guess,” Pichai said. “I do test a lot of gadgets at home, so I have vulnerabilities in terms of how my kids get access to stuff.”

Pichai said that he had to teach his son some important details about how the financial system worked, “I realized he understood Ethereum better than how paper money works …I had to talk to him about the banking system, the importance of it. It was a good conversation.”

The interview came on the same day that thousands of Google employees around the globe protested against Google’s handling of allegations of sexual misconduct against female employees with a simultaneous walk out. Pichai admitted ‘We didn’t always get it right.’

 

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UNICEF France Now Accepting Multiple Crypto Coin Donations

The United Nations Children’s Fund (UNICEF) has announced that its French office now accepts cryptocurrency donations.

UNICEF France has followed up on other cryptocurrency related initiatives it adopted this year, to add 9 popular digital currencies to its website donation portal. The donation option features most of the popular coins including BCH and BTC.

The United Nations Children’s Fund is a United Nations program headquartered in New York City that provides humanitarian and developmental assistance to children and mothers in developing countries. It is a member of the United Nations Development Group. UNICEF currently works in 190 countries and territories around the globe.

This is not the first case of UNICEF using cryptocurrency to facilitate and fund their projects around the world. Earlier this year the organization announced a program designed to use donors’ computers to raise fiat currency through cryptocurrency mining.

The website, the nucleus of the new project, is called The Hope Page and is able to mine the cryptocurrency Monero using donors’ computer processing power through Coinhive, a crypto-mining service. In February, it launched a similar program to support children in Syria, affected by the lengthy civil war in that country, using donors’ computers to mine Ether. Talking about the latest of the fund’s humanitarian projects to support children around the globe, director of UNICEF France, Sébastien Lyon stated:

“Cryptocurrency and blockchain technology used for charitable purposes offers a new opportunity to appeal to the generosity of the public and continue to develop our operations with children in the countries of intervention.”

Recently, there’s been a significant increase in charity events related to crypto. Some of these have joined a growing establishment of charities accepting Bitcoin donations such as Electronic Frontier Foundation, Multidisciplinary Association for Psychedelic Studies, WikiLeaks, Antiwar.com, Watsi, Water Project, Code to Inspire, Bitgive and Epic Change.

Despite the trend, charities claim they are still underfunded, and opening up to numerous cryptocurrencies is one way of opening up other channels for donors to support essential projects.

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Wall St Millennials Crack Crypto Fortunes: Banker Starts New Life Firewalking

Millennials are leaving behind the world of private equity and hedge funds, and jumping off the Wall Street merry-go-round for a new life because they’ve already made their money on cryptocurrency, writes EFC.

At least three staff members at New York’s Goldman Sachs have reported that it was time to move and start a new life, having made their own crypto fortunes, reports Bloomberg. Both Johnathan Cheesman, 36, and Justin Saslaw, a sprightly 28, have quit having made their money on trading and taking advantages of the crypto markets’ fluctuating fortunes.

Senior banker Jamie Dimon, who now regrets calling Bitcoin a fraud, is now forced to watch as those lower down the pecking order make enough money from cryptocurrency dealing to leave the security of a day job for pastures new. In March, Adrian Xinli Zhang became a director at Deutsche Bank in New York aged just 29, but was gone in a month after trading Bitcoin in his spare time, sources told Bloomberg.

BlackRock staff member Asim Ahmad put everything into Ether when he had the chance, using all of his life savings to invest in the digital currency, but has now left his London office to start anew on the back of his crypto profits. Asim commented:

“I’m in a position where it doesn’t make sense to work at BlackRock anymore… The one-day volatility of my portfolio is higher than my salary, so if I get a few investments right then I’ll have made the same as my yearly wage and everything else on top is a bonus.”

Zhang is reportedly working on a trading platform for digital assets, while Ahmad helps manage a fund that invests in blockchain businesses.

Why then, are millennials reaching these dizzy heights? Adam Grimsley, co-founder of crypto hedge fund Prime Factor Capital, suggests why a crypto generation gap among finance professionals certainly appears to be opening up.

“The youngsters may have less intellectual baggage and may be more open-minded, but they also have less responsibility for managing risk and working out the practicalities of bolting on crypto to the existing business.”

Grimsley adds, “You’ve seen a bifurcation internally at many larger houses where senior managers are very skeptical about crypto, while graduates and younger team members are very positive.”

Not all stay within the boundaries of the space that made them their fortunes. After more than 20 years working at HSBC and as a CEO for a while, Julius Cardoza now runs a London life coaching firm, with HSBC now one of his clients. One of his training program exercises is to get his clients to perilously walk over hot coals.

“Firewalking is transformational for the rest of your life because after that there’s nothing you’re frightened of because you have already tested yourself to the limits of what you think you can achieve,” he explains.

 

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London Mosque Takes Crypto Stance, Accepts Ethereum for Donations

The first mosque for Turkish Cypriots in the UK, the Masjid Ramadan, has decided to accept Ethereum in order to carry out essential repairs, reports London’s Hackney Gazette.

Leaders at the mosque have made the decision to accept the cryptocurrency as part of Muslim observance of Zakah, the annual donation made by all of that faith, requiring that adherents donate 2.5% of their current wealth.

The Hackney mosque hopes to raise at least GBP 10,000 in Ether donations over Ramadan. Erik Guney, the board of trustees’ chairman, said that he hopes that the project can bring attention to the Muslim world that the community needs support:

“I’ve grown up around here and I have watched the community grow and the challenges it’s faced with – it’s a struggle, with housing, food, the cost of funerals and government changes, he said, going on to point out that the wealthy can make a significant contribution.

“We are trying to appeal to a wider audience with the new money. It’s big in the Islamic world, and we have set up a platform for wealthier Muslims outside our community to support and donate to our mosque,” he added.

Founder of blockchain startup Combo Innovation Gurmit Singh has become the mosque’s crypto advisor, outlining how best the funds can be received, stored and sold.

Until recently, there had been concerns among Muslims whether the selling of cryptocurrency was permissible under Sharia Law and if it was possible for Islamic financial firms to invest in cryptocurrencies alongside the rest of the world. At a recent conference in Bahrain, leading Islamic scholars decided that Bitcoin and other digital currencies fell into the category of ribawa. This means that cryptocurrency must be exchanged in equal measure, and with immediate transfer of possession, to avoid breaking Sharia Law.

This argument is key to any decision that might be taken in the future regarding the permissibility of virtual currencies in the Muslim world, as the buying and selling of Bitcoin could be viewed as a type of usury due to its huge profit and loss margins.

It appears that this law is being observed by the mosque, as donations will be transferred straight from the mosque website to the bank’s cryptocurrency hard wallet, which will be visible for all to see. The donation will then be traded for sterling through a currency exchange like LocalBitcoins UK.

“If Muslims, who make up a quarter of the world’s population, hold just 1% of Bitcoins – or GBP 1.04bn – then GBP 26 million in Zakat contributions is due,” said Singh.

Zayd al Khair, a religious advisor at Masjid Ramadan, has been monitoring discussions and debates by Muslim scholars from all over the world:

“Bitcoin is a new phenomenon so scholars are divided,” he said. “Some have taken a practical approach and others have embraced it fully, and we have decided to take their position.”

 

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Regulations, Hacking Push Blockchain Provider To The Wall

Ethereum wallet and blockchain provider Parity has been forced to shut down its PICOPS platform from 24 May following new EU data protection rules and guidelines.

The EU General Data Protection Regulation (GDPR) replaces the Data Protection Directive 95/46/EC and was designed to harmonize data privacy laws across Europe, to protect and empower all EU citizens data privacy and to reshape the way organizations across the region approach data privacy,” states the EU’s GDPR portal.

However, according to MSN, the new law is causing certain problems, with LocalBitcoins disabling multiple accounts due to the new rulings. The GDPR laws are demanding, with a significant checklist of requirements, including those that relate to data processing principles and the limitation of storage. The significant challenges to blockchain mainly concern the immutability of transactions, replication, and encryption, including data processors and data controllers.

Swiss law firm PwC Legal recommends that platforms now scrutinize their blockchain-based solutions with regard to GDPR compliance to obtain a clear view of the legal risks they may encounter. It also explains why blockchain’s most significant feature; immutability, could be undermined by the new EU ruling:

“Transactions on a blockchain are immutable. It is not possible to delete information from a blockchain. This may contradict the GDPR’s right to erase / duty to delete personal data when a lawful ground for processing ceases to exist.”

Ethereum co-founder Vitalik Buterin commented on the news, calling it a sad development, particularly as PICOPS had facilitated many ICOs on the Ethereum ecosystem. Commenting on Twitter, he said, “A potentially very useful service in the Ethereum ecosystem discontinued due to GDPR issues.”

Jackson Palmer, the creator of Dogecoin, also criticized GDPR laws, despite saying that he thought it was “a step in the right direction from a data privacy perspective”.

“While I greatly respect the movement towards better data privacy and security laws, GDPR compliance is a large and unrealistic burden that small side-projects are simply under-equipped to manage (especially if being maintained by a single developer in their spare time),” commented Palmer.

Jutta Steiner, the CEO of Parity was critical of GDPR, arguing: “From a practitioner’s perspective, it sounds to me that it was drafted by trying to implement a certain perspective of how the world should be without taking into account how technology actually works.”

However, the company has commented that it will continue to work with regulators in order to ensure that the new rules don’t impact negatively on the industry. These are hard times for Parity, following its hacking last year, losing more than USD 300 millions worth of Ether.

 

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Stephen Curry Becomes First Celebrity CryptoKitty

National Basketball Association (NBA) superstar Stephen Curry of the Golden State Warriors, considered the best shooter in history by many players and analysts, has become the first celebrity to team up with popular Ethereum-based game CryptoKitties.

Three different CryptoKitties based on Stephen Curry have been developed, dubbed CurryKitties. In honor of the release, 10 highly-coveted CryptoKitties are being given away to lucky winners, in addition to a curry recipe for anyone who signs up.

The three CurryKitties are available for purchase starting at a price of ETH 100 – equivalent to $73,000 at the time of this writing – and until purchased, the price will keep declining until it reaches ETH 5, which is still a hefty thousands of dollars. It remains to be seen whether anyone will actually purchase the CurryKitties, since normal CryptoKitties can cost less than USD 5 on the marketplace.

CryptoKitties is marketed as one of the first blockchain-based collectibles and games. It uses the Ethereum blockchain, and is currently the second most popular and valuable cryptocurrency in the world by market capitalization. Its blockchain is one of the most secure due to an immense amount of mining power. Each CryptoKitty is stored in the blockchain and is virtually impossible to steal since it’s cryptographically secure.

CryptoKitties are digital property whose ownership can be verified with the blockchain, and there is a marketplace where users can buy and sell the CryptoKitties. To play CryptoKitties, first users must purchase a cat in the marketplace with Ether; it is recommended that they buy two cats so they can breed and generate more CryptoKitties. Theoretically, it is possible to make money playing CryptoKitties if users breed cats and then sell them on the marketplace. Some CryptoKitties are far more valuable and coveted than others, and are called fancy cats; they can be generated with the right breeding combinations.

The CurryKitties are possibly the first sports memorabilia stored on a blockchain, making this a milestone for blockchain technology and partnerships. As use of blockchain technology expands globally, more digital property of all varieties will be stored on blockchains.

 

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