Ethereum blockchain - a silver bullet for lots of developer’s issues

Decentralized application development is gaining momentum because Ethereum 2.0 has not lost its core capabilities for Web3. Tweets are still uncensored, payments do not require personal information, and servers do not crash. Some may go further and find a host of other advantages: transparency, trust without intermediaries and tamper resistance.

Ethereum 2.0's price is not dropping after the merger, and the network's creators believe it will become environmentally friendly, increase bandwidth, and lower fees. This raises the demand for development. We at Ideamotive realize that the IT world is not going to be the same. In this article, we will talk about the use and prospects of the Ethereum blockchain (ETH).

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A Brief History of Ethereum

The concept was proposed in late 2013 by programmer Vitaly Buterin, then co-founder and editor of Bitcoin Magazine.

The network was launched in the summer of 2015. ETH immediately showed market aggressiveness. Moreover, it is not only a cryptocurrency. It is also a unique platform for developing applications based on "smart contracts." IBM, Microsoft, major banks, airlines, and even UNICEF immediately expressed interest in it.

In recent years, due to scaling issues, the project team has been working on a transition to Ethereum Proof of Stake (POS). From version 2.0, many people expected serious improvements, in particular, an increase in transaction speed up to 100000 tx/s!

In August 2021, the developers activated the London hard fork, which made some of the miners' commissions get burned. This increased stability and accelerated the network, and triggered a deflationary mechanism, and the supply of ETN began to shrink.

In October, Altair was updated to simplify block and transaction validation, and in December, work began on reducing centralization and making the final transition to PoS.

Who's Vitalik Buterin

Buterin was born in Kolomna to a family of programmers, and at age six went with his parents to Canada, where he received his education. From an early age, he was distinguished by his great mathematical abilities. Vitaliy mastered his first computer at the age of 4. By the age of ten he had learned C++ and began creating computer games. Four years of private study at Abelard School were not in vain.

At the age of 16, the young genius became interested in bitcoin and abandoned his studies at the University of Waterloo to work on it. He was simply expelled, but three years later he won the World Technology Award, beating Mark Zuckerberg himself!

The development of the project became a reality thanks to the Thiel Fellowship. For three years Vitalik worked in Zug, Switzerland, and in 2017 he moved to Singapore. At the same time, he was included in the Forbes ranking of the 600 brightest personalities under the age of 30. In November 2018, he was recognized by the University of Basel ─ Buterin received his Ph.

His project has become one of the most successful. The capitalization of ETH today is $250 billion, and the rate in three years has all chances to grow to $2300. Today Buterin is a very influential person in the web3 world, and his ideals and plans for blockchain development are recognized by the professional community as the most promising.

Smart Contracts 

Smart contracts are pieces of code that use blockchain capabilities to facilitate, verify or guarantee the execution of agreements. The concept was formulated by Nick Szabo, who called them a set of promises in digital form, including the protocols under which the parties fulfill them.

The smart contract offers a number of significant advantages: speed, immutability, accuracy, and affordability. Like a traditional contract, it regulates rules and fees but automatically enforces obligations.

How does a smart contract work?

Code blocks can perform certain functions with certain parameters and predefined criteria. Simply put, they operate on the principle of "if this happens, do that. In turn, it is an application specifically designed for your needs. You can customize it to your liking.

It can be used equally by businessmen and ordinary people without any privileges. Everyone can easily exchange some value, and the role of a guarantor will be played by the blockchain, eliminating any middlemen.

The asset is transferred to a program that monitors compliance with the conditions laid down. At a certain point, it confirms that the terms of the contract have been met and automatically determines whether the specified asset should go to one of the parties to the transaction or immediately return to the other. All this time, the document is stored in a decentralized registry, which prevents the parties from changing the terms of the agreement.

Where smart contracts are used?

They can be used in any type of transaction for identification, copyright protection, art trade, loan processing, insurance, supply chain tracking, business management, medicine, and a variety of other tasks, including voting in presidential elections.

Smart contacts save time, work without intermediaries, and guarantee authenticity and data security.

Technical aspects of ETH

Ethereum communicates with a vast network of computers that store and process transactions supported by smart contracts. But to make this work, you need a special fuel called gas.

Gas and its price

Theoretically, it is a measure of the computational work in the blockchain network required by miners (validators) to add a transaction to a block. Every action that takes place on the network requires processing power. The more resources and the more complex the transaction, the higher the Ethereum gas fee.

The price of gas is not constant and can change depending on the demand on the network. The more transactions there are at the time you want to send a transaction, the higher the transaction fee will be, as will the amount of time it takes to complete the transaction. For example, sending ERC-20 transfers may require a higher computational cost.

If the transaction is complex (fills an entire block), it is done only after all the miners pack it in. Typically, the Ethereum gas fee is defined in nanoether, nano, shannon, or "Gwei" (1 ETH = 1×1018 Wei), but it is usually 1,000,000,000 because 1 Gwei equals 109 Wei.

Unlike the gas limit, traders can set the value to adjust the speed of trade confirmation. Mainly because it is a crucial value that determines how fast the miner completes the transaction. Typically, the payment is taken from the sender's wallet. In order for the transaction to be confirmed, you need to have an amount greater than the amount that needs to be sent.

ETH Gas Station is useful for estimating the maximum transaction fee for a given limit and Ethereum gas fee. The automated calculator helps to better estimate the time frame required to mine a block.

What tools to use

The most commonly used: 

Truffle 

It is an Ethereum development environment, testing platform, and blockchain asset pipeline. Provides intelligent contract lifecycle management, automatic contract testing in JavaScript and Solidity, and simple network management. An interactive console provides access to all created contracts and commands.

Remix IDE

An integrated online Ethereum development and testing environment for small smart contracts using plugins. The IDE reduces setup time, speeds up tasks, informs developers, and standardizes the development process. Has a number of plugins that help in creating and testing smart contracts.

MetaMask

A browser extension that can be used to extract data from the blockchain and administer signed transactions. Based on remote nodes that are managed by other users via the MetaMask interface. It incorporates the Ethereum web3 API into the javascript context of each website so that dapps can read data directly from the blockchain.

Ganache

Considered one of the best for testing dapps. Allows you to run an infinite number of tests without the cost of gas, without connecting to any open test or core network. Provides information that can be used to view the status of accounts, as well as ten accounts with a balance of 100 ETH for practice.

Geth

The node's implementation in the Go programming language allows it to explore the network, send tokens, and develop smart contracts. Depending on the parameters, it will connect to an existing blockchain or create its own. The tool is free and supports all operating systems. 

Parity

Uses Rust, which has more performance and memory management capabilities than Go. As a result, it runs faster than Geth. Includes three technologies: 

• Substrate ─ a blockchain development platform that uses WebAssembly and Libp2p.
• Polkadot ─ a system that integrates different blockchains.
• Parity Signer ─ a standalone wallet that can be used on mobile devices.

Provides a true multi-chain transaction execution environment.

Ethers.js 

Complete and minimized library with full TypeScript source code and definition files. Can import and export JSON wallets, HD wallets, and BIP 39 mnemonic phrases. Small in size (104 KB) but provides full functionality and fairly easy use.

Infura

This is an Ethereum development package, including tools and APIs. Provides fast and reliable access to JSON-RPC over HTTPS and WebSocket, the Ethereum network, and IPFS, enabling the creation of next-generation software and scalable Web3 applications. The infrastructure is built with scalability in mind. There is a free account.

Embark

The platform simplifies Ethereum development and dApps deployment using serverless html5 applications. Works with EVM, IPF, Whisper, and Orbit communication platforms. Supports Swarm deployment and can automatically deploy contracts on a test, private or core network. Monitors and redeploys contracts as needed and provides JavaScript development capabilities.  

Drizzle 

Provides a number of interface libraries for TruffleSuite. Synchronizes contract and transaction information. React data warehouse is at the core of Redux. Offers two packages: normal and React, connecting the existing application via drizzleConnect and drizzleProvider.

Of course, there could be many more tools in the Ethereum developer's arsenal. We just noted the most key ones, without which you can't create anything substantial.

Switch from POW to POS

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After repeatedly shifting deadlines and conflicting information from key developers, the ETH network completed the transition to the new transaction processing system on September 15, 2022. The work took several years to complete.

The merger went smoothly, the network was successfully upgraded, and you and I saw a unified ecosystem for securing, synchronizing parts of the database, and coordinating sharecroppers across the network. Immediately after the transition to Ethereum Proof of Stake, the complexity and hash rate of mining dropped to zero. The coin is almost no longer mined, as gas fees are now paid to stackers.

What has changed?

In order to eliminate controversy among users, the Ethereum team has published the following information: 

1. Anyone can synchronize their own node without ether. You cannot add new blocks. This is a feature for validator nodes. 
2. Changing the consensus mechanism, rather than expanding network capacity, will not lower gas fees. 
3. The speed of transactions will remain the same or increase insignificantly. 
4. It will be possible to get ETH out of the stacking only 6-12 months after the upgrade. 
5. Rewards for staking will be blocked, and it will be possible to withdraw only the income from the commission. 
6. Withdrawal of ETH will be limited to a daily limit for security purposes. 
7. Possible increase in profitability by 50%. 
8. The merger will not lead to downtime. 

Sharding became full ─ using random sampling. Validators are randomly selected to create blocks, which stack (block) at least 32 ethers (about $50,000). The larger the bid, the more likely it is to be selected. Validators are also rewarded for actions that help protect the network. 

The technology has gone green. Ethereum Proof of Stake selects the members of the network that have "frozen" the largest number of coins, and this requires almost no energy expenditure. And many experts believe that Bitcoin's dominance will end within the next five years.

How Did ETH Affect Life

No matter how much the traditional finance sector resists, cryptocurrency will inevitably dominate in the future. ETH technology makes it possible to register transactions with any assets without complicated traditional legal procedures. Cheap to implement, it is already attracting the attention of big businesses and even the governments of some countries.  

Future of ETH

We can expect innovative ideas to be realized against the backdrop of reduced costs and inefficiencies in existing infrastructures. Investors, founders, and developers will look for new ways to go beyond traditional notions. Ethereum developer technology will be used wherever it is necessary to organize the interaction of remote participants without a controlling body.

Vitalik Buterin's project team has ambitious plans to develop the blockchain ecosystem. The boom in NFT and Defi markets should become growth drivers that will allow ETH capitalization to equal BTC.

Today the creator of the blockchain platform is one of the chairmen of the Ethereum Foundation. He authored or co-authored about 40 Ethereum Improvement Proposals (EIP). Buterin participated in the creation of the ERC-20 standard, initiated EIP-1559, and proposed the introduction of ZK-Rollups technology into the commission calculation system, which reduced their average size by several times.

Buterin is a public figure, speaks at various conferences, and is a recognized industry intellectual. He comments on the current agenda on his Twitter and runs a blog in which he publishes his thoughts.

On his website, he suggests new uses for technology, from new systems of distribution of public goods to the creation of "crypto cities. He also criticizes the legalization of bitcoin in El Salvador, outlines the complexities of blockchain-based voting procedures, and discusses how the prediction market affects contemporary politics.

He is interested in life extension and publishes works on economics and the decentralization of the tax system. His figure is prominent in public life. Even before the war in Ukraine started, Vitalik urged the Russian government not to allow military action.

Now Buterin is one of the weighty representatives of society, who is regularly included among the most influential people on the planet. His contribution has been recognized by Elon Musk, and in China, he has even been called "God B."

Summary

ETH will grow in popularity in the IT sphere, but its widespread adoption will require extensive knowledge and skills. This is why many companies are investing in staff training. We can say that the shortage of qualified personnel holds back progress because only professionals can understand the nuances of using Ethereum blockchain so far.

If you have a unique project, but not enough competence and time to implement it, it is worth resorting to their help. To get a flexible and secure blockchain platform, contact us, and we will give you access to the best talents and advanced technologies!