Polkadot connects different individual blockchains in a single network; wants to do with the blockchain what the Internet did with lonely computers around the world.
Polkadot was founded by Dr. Gavin Wood, Robert Habermeier and Peter Czaban within the framework of the Web3 Foundation, a Swiss foundation dedicated to facilitating an easy-to-use and fully functional decentralized web.
Wood is a Thiel Fellow and renowned technologist, and has an extensive resume in the cryptocurrency and blockchain space - he's a co-founder of Ethereum, founder of Parity Technologies, and creator of the smart contract programming language Solidity.
Habermeier, also a Thiel Fellow, is a reputed blockchain and crypto developer.
Czaban is the Director of Technology for the Web3 Foundation.
Why is Polkadot special?
Polkadot can process multiple transactions on several different blockchains in parallel using its 'Parachain' function. Called a fragmented multichain network, Polkadot can help make blockchains like development of Ethereum https://www.blockchainx.tech/erc20-token-development more scalable. Additionally, users can add custom blockchains to the Polkadot network with little or no friction.
To better understand the added value of Polkadot, it is best to explore the various issues that have limited and restricted blockchains. Let's dive into our Polkadot guide.
Problem # 1: Scalability.
Most of the popular blockchains are not scalable due to their structure.
For example, long ago, it cost between a few cents and a few dollars equivalent to ETH to transact on Ethereum, the world's most popular blockchain. Today, Ethereum fees have cost more than $ 250.
Most blockchains run into scaling issues in one form or another. It is impossible to speed up transactions, and as the demand for transaction processing increases, each transaction starts to cost more.
Bitcoin, which was established as a means of transferring value from peer to peer, can only process 4.5 transactions per second.
Development of Ethereum https://www.blockchainx.tech/erc20-token-development introduced as Blockchain 2.0, does a little better, with about 12 transactions per second.
In comparison, Visa / Mastercard processes more than 2,500 transactions per second.
Slow payment processing is one of the main obstacles for Bitcoin and other cryptocurrencies to become commercial payment methods.
Problem # 2: Limited or null data communication and exchange.
Dozens of blockchains were created in isolation, and it is not possible for them to communicate or exchange value with each other. For example, you cannot send BTC on the ETH network. Even with DeFi services that allow working with multiple currencies and blockchains, oracle services such as ChainLink must be used to obtain accurate data in real time on the current value of each currency.
Problem # 3: Lack of personalization.
Until the development of Ethereum https://www.blockchainx.tech/erc20-token-development, blockchains did not support any customization of the transfer of value from one owner to another. Bitcoin, for example, only allowed peer-to-peer transactions. Smart Contracts allowed customizing and programming what can be achieved on a blockchain, to a limited extent.
How does Polkadot work?
Polkadot leverages four main components to achieve its goals: Relay Chain, Parachains, Parathreads, and Bridges.
The Polkadot relay chain:
The relay chain is the main architecture that holds everything together. Polkadot uses Relay Chain primarily to verify transactions, similar to how Bitcoin and Ethereum use the Proof of Work and Proof of Stake (POS) processes to verify transactions. At Polkadot, users can stake the native DOT token to aid in the work of verifying transactions.
As a central component of the Polkadot, the relay chain level coordinates the system as a whole, performing important functions such as verifying transactions and making decisions about how to run the entire Polkadot architecture. There are not many programmable or customizable options in this layer of the Polkadot.
The list of functions of the Relay Chain includes:
Transaction validation.
Nomination of the parties that will stake their coins for validation.
Preservation of historical data.
Health monitoring of the entire Polkadot system.
The Parachain:
A Parachain is a complete blockchain application that lives on top of the Relay Chain. It is described by Polkadot in his whitepaper as "an application-specific data structure that is globally consistent and validatable."
The Relay Chain, or base layer, handles the security, transaction validation, and governance functions of each Parachain.
The Parachain is similar to other blockchain networks like Bitcoin or Ethereum Blockchain. Polkadot is unique in that it can contain multiple blockchains within itself. Hypothetically, you can house both the Bitcoin and Ethereum blockchains within itself and place each as a Parachain.
If the Bitcoin and Ethereum blockchains are on Parachains within Polkadot, they will be able to communicate with each other, and can even pass transactions from one to the other - imagine converting BTC to ETH without an exchange. Blockchains communicate through a protocol called XCMP, which stands for "Cross-Chain Message Passing."
The Parachain tier only has a limited number of available slots, which are auctioned off by the Polkadot community.
Parachains offer a unique element of security. In theory, the Bitcoin blockchain can be hacked with a 51% attack. Such an attack could be prevented by the collective nature of the Parachains under the overall security structure of the Relay Chain.
Parathreads:
 
Parathreads are temporary spaces in the Polkadot network, used primarily for testing ideas.
Parathreads are similar to Parachains in that they allow the construction of a blockchain or special use application.
The difference between Parathreads and Parachains is that Parachains are more resource intensive and more permanent than Parathreads - Parachains require a significant initial investment to cover the high return.
As Polkadot says, "Parathreads have the exact same API and functionality as Parachains, but on a pay-as-you-go basis."
Think of Parathreads and Parachains as a Process and a Thread that run on a computer's CPU. A process can have many threads, and the threads of a process must share the resources of the process.
Similarly, Parathreads must also share resources within a Parachain because they are temporarily rented places on a Parachain to practically test ideas in a living environment.
Parathreads also allows smaller community projects that could not compete in an auction for an exclusive Parachain. Parathreads allow these projects to experiment and demonstrate their effectiveness before committing to the initial costs of a Parachain.
Parathreads must share scarce resources between several Parathreads running on a particular Parachain; as such, the communities in each Parathread must compete for resources with each other, and must pay the owners of the hosting Parachains for each processing block.
Parachains that have decreased the size of the community and are not using the validation resources can be moved to become Parathreads to free up the limited slots of the Parachains while preserving functionality.
Chains that might not otherwise be able to compete in an auction for their own Parachain or do not believe it is economically viable can share Polkadot's security resources by paying host Parachains for the processing of each block.
Bridges:
 
Bridges, or the ability of an individual blockchain to communicate and transfer value to another, have been absent in traditional blockchain technology.
Let's say you want to buy an NFT priced in ETH, but you only have BTC. Traditionally, you would have to convert BTC to fiat and then convert it to ETH, or buy ETH for BTC on an exchange. You simply cannot transfer value or data from one Blockchain to the other without an intermediate layer, be it an exchange or fiat.
Bridges change that restriction, and allow Parachains, which are essentially blockchains embedded within the Polkadot ecosystem, to communicate and share data.The economic sovereignty and diversity of the respective blockchains are not affected when communicating or transacting through the bridges.
Bridges are available in both centralized and decentralized versions, which could lead to an avenue of communication with central banks if (when) they start minting digital fiat currency.
It is important to note that bridges are a planned feature of the Polkadot Blockchain, and have yet to be put into production. According to Polkadot, "it will be updated as more information is determined and becomes available."
The Polkadot Token (DOT):
 
Polkadot uses its native token, DOT, for payments, transaction processing and governance. DOT is also used for PoS (Proof of Stake) relay chain validation.
The DOT token performs multiple functions on the Polkadot network, such as compensating validators, as a government token, or as a currency.
There are currently 1 billion DOT tokens allocated, up from the initial maximum offering of 10 million DOT due to a network rename.
Polkadot Price (DOT)
The DOT token has traded between $ 2.90 and $ 40.70 since its launch in August 2020. The main exchanges that Polkadot (DOT) trade is typically Binance, OKEx, and Houbi Global.
Polkadot Staking
Unlike the Power of Work (PoW) consensus, in which miners use electricity to validate the blocks to be added to the Blockchain, the Proof of Stake (PoS) requires users to validate the blocks by betting their coins. In the PoW consensus, anyone can create a node and mine the blocks. In contrast, in PoS, validators are specific participants who direct the nodes (also called validator nodes) to propose and validate the blocks that are added.
Like other PoS systems, Polkadot users can use a DOT to gamble and have the owner become a validator of transactions for the entire ecosystem. nominate your DOT to other validators,
or become nominators themselves to share in the rewards.
If a DOT holder does not wish to do the verification themselves, they can also nominate another DOT holder to stake their DOT tokens; it is as if you select someone to be your representative. A DOT holder can name up to 16 validators to stake their tokens on it. Hence the Polkadot consensus mechanism is called NPoS (nominated proof-of-stake).
Conclusions
It is no coincidence that the same developers working on the transformation of Ethereum into zEthereum 2.0 are also bringing the Polkadot ecosystem to the world.
In building Polkadot, the team has paid special attention to remedying all the deficits that plagued and limited previous blockchain systems, such as the lack of personalization of Bitcoin or the lack of scalability of Ethereum 1.0.
 

Ethereum. As we all know in January 2009, Bitcoin and its implicit technology, Blockchain, was born. The development of cryptocurrency has been exponential since its appearance, nor is the blockchain far behind.

The future of Blockchain is promising, it has applicability in most sectors. In a verifiable, transparent and permanent way, distributed database allows executing transactions between two or more parties
Vitalik Buterin, is the name of the Russian who created Ethereum in 2014, taking advantage of the characteristics of the blockchain. He has been able to give Blockchain a twist. He goes beyond digital currencies, by creating a platform capable of developing applications for any contractual field.

Ethereum and smart contracts, much more than a digital currency
The Ethereum concept not only encompasses the platform that sustains the Ether cryptocurrency, it is much more.

Ethereum is a protocol, a platform, a programming language and a cryptocurrency (Ether) where the main objective is the creation of smart contracts or smart contracts.

Smart contracts are applications that operate like computer programs and are executed through blockchain, in a decentralized way. The Ethereum platform is a worldwide network of devices / computers that develop these smart contracts under immutable shared consensus rules.

A smart contract is a software code that will execute itself under certain circumstances agreed between the parties in advance. They usually include a financial transaction. For example, if the value of oil falls to a fixed price, an amount of money is invested in a certain action.

Smart contracts will provide financial services in the future without the need for intermediaries. They have endless possibilities: online voting systems, insurance, betting ... Smart contracts incorporate the main characteristics of Blockchain:

 Once created they cannot be modified, because they are immutable,Safe, they do not depend on a central authority, but on the distributed network where security is greater.
Transparent, all information is stored. You can consult but not modify previously generated transactions.
The platform's programming language is «Complete Turing», it can be used to program contracts for any type of transaction or application.

In short, Ethereum uses the Blockchain to become a decentralized global computing platform capable of creating smart contracts. These computer applications include not only cryptocurrencies, but anything that is programmable. Smart contracts are used for any type of transaction, they are executed by themselves, without the need for human intervention
If Bitcoin is a blockchain platform where transactions with digital currencies are carried out. Ethereum development https://www.blockchainx.tech/erc20-token-development is a blockchain platform where transactions of anything are made, it allows to transact anything that is programmable.

Ether, the digital currency of the Ethereum platform
The Ether cryptocurrency is the fuel that maintains the platform. For smart contracts to be executed, it is necessary that they be paid in Ethers. The higher the price to pay, the more complex these smart contracts are. Ethers are therefore created to facilitate transactions on the platform.

The digital currency Ether, in addition to serving as an exchange currency for the payment of the operations that is executed, serves to incentivize the miners who contribute their resources to the decentralized network.

The miners are users who are in charge of verifying that the transactions are correct and that no type of fraud is committed. Ether mining is similar to Bitcoin mining.

Ether characteristics. Differences with Bitcoin
Behind bitcoin, Ether is the second most used digital currency. Some experts predict that it will overcome it. These are some of the characteristics of the Ethereum digital currency compared to Bitcoin:

Both Bitcoins and Ethers can be used as coins. They have software portfolios or Apps (wallets) for the purchase of products or services and also function as deposits (savings).
Each cryptocurrency has a procedure to carry out communications and checks on its platform, Ether and Bitcoin are a protocol.
The two cryptocurrencies use Blockchain technology, so that previously executed transactions cannot go back.
The main difference of the development of Ethereum https://www.blockchainx.tech/erc20-token-development cryptocurrency from Bitcoin is that there is no maximum limit of Ethers in circulation. Bitcoin technology has a limitation on the issuance of 21 million virtual currencies. The limitation makes Bitcoin a clearly deflationary currency. Ether therefore has a more consistent basis to replace traditional currencies.
The confirmation time of the operations is 16 seconds in Ethereum and 10 minutes in Bitcoin.
Ether uses 18 decimal places and Bitcoin 8.
Ether and Bitcoin, similarities and differences
Ether and Bitcoin, similarities and differences

Conclusions and some Ethereum problems
These are some of the problems linked to the Ethereum platform:

The main problem attributed to the platform is that the nodes are very focused on the creators. If the nodes belong to few people, the system loses one of its main characteristics, decentralization. A possible manipulation is within the reach of a few or a cyber attack on the creators.
Immutability of smart contracts. Contracts cannot be modified, this is good for confidence in the system. But any plan change or mistake implies that it cannot be corrected.
Difficulty in linking external services with the smart contract. For certain services, the action required, once the conditions of the contract have been fulfilled, requires human intervention.
The main problem is the first, but it is totally solvable with the passage of time. Since the number of nodes will be increased and real decentralization will be a fact.

Blockchain's employability is huge. Once its applicability in cryptocurrencies (Bitcoin) has been validated, a distributed platform capable of developing an infinite number of economic and financial applications has been created. Smart contracts generated through the development of Ethereum https://www.blockchainx.tech/erc20-token-development can cause a disruptive change in digital business relationships.

Bitcoin started it all. It carries the burden of being the most attacked network, the one with the worst marketing (perhaps because it does not have a department that is in charge of it), and the most decentralized. It is, without a doubt, the largest and most powerful encrypted network in history. However, the Ethereum currency (Ether) is gaining more and more relevance.
In the same way that the Bitcoin network uses a currency to function, the Bitcoin, next to it there is another network that is based on the same principles to function. This network has another currency that is the second most important according to market capitalization, the currency of the Ethereum network, Ether.
The development of Ethereum https://www.blockchainx.tech/erc20-token-development is more than just a monetary network. Described in 2013 in the  Whitepaper by Vitalik Buterin, a Canadian of Russian descent, its purpose is very different from bitcoin.
It is a cryptocurrency, in the same way as bitcoin, but its main use is not as a means of payment. Your goal is not to be "money." Ether is fuel for a world computer.
Ethereum Currency: What Was It Designed For?
In essence, the Ethereum network development https://www.blockchainx.tech/erc20-token-development is designed to provide a place for the creation and management of so-called Smart Contracts: code that moves money based on a condition. For this, a world computer, giant, without an owner, without a central control point, is designed that executes these Smart Contracts.
In other words, for these programs to work, thousands of computers are coordinated throughout the world that executes the code and shape this super-computer. Code that, like everything else that has more value on the blockchain, is decentralized.
 
Let's think about an app. WhatsApp, for example. This app works on each of the phones that have it installed, and needs a central computer, owned by Facebook, which stores, manages, and operates the entire service. A network where millions of people connect to a central point. This is NOT blockchain.
 
An app like WhatsApp based entirely on Ethereum would not have a central point: it would be run by all the computers connected to that network, (almost) simultaneously.
Ethereum coin: the means to sustain the network
The service would not have a central server, but then how is the system sustained? How is it possible that what Facebook costs so many millions of euros to maintain, works on other people's computers? Who pays for all this?
 
It is thanks to the currency that exists within the Ethereum network, Ether (ETH). This is the currency that is used to 'pay' the owners of these decentralized computers, who care very little about the service they are supporting.
They are there to sustain the whole system and reap benefits for it; profits they collect in the form of Ethers.
 
How do they collect them? As in Bitcoin, each time one of these decentralized computers solves a problem cryptographic, the network rewards them with a certain amount of Ethers, currently 5 ETH.
This 'prize' is awarded each time a block is solved, approximately every 15s to one of these computers. This is the system's way of increasing the number of Ethers in circulation.
Ethereum Coin: How Is It Managed?
This monetary policy was implemented in Ethereum's initial coin offering (or ICO) in 2014, where:
60 million Ethers were created
12 million were distributed between the Ethereum Foundation and different contributors to development.
5 Ethers are created by closing a valid block.
3 Ethers are created by closing an "uncle" block (a valid block but not in the main chain).
Therefore, these computers solving (or closing) blocks of transactions would receive 5 ETH as a reward for sustaining the system.
 
The design of monetary policy, the incentives for behaving correctly, and the penalties for not doing so is what a new branch of knowledge called cryptoeconomics is in charge of.
As a result, what is achieved is that thanks to the pure economic interest of these actors, the owners of those computers distributed throughout the world, a network is maintained without a central point of control.
A network that uses Ethereum's currency, Ether, to function. A network that allows anyone to participate in it. A network that is resistant to censorship and controls by entities outside it.
And finally, a network that allows anyone to design applications that, like bitcoin, cannot be stopped.

Ethereum is a distributed blockchain network like Bitcoin, it has important technical differences and a different purpose as well.
What is Ethereum?
After the appearance of Bitcoin, a long line of cryptocurrencies with different purposes and uses has followed. But if anyone has managed to position itself in the crypto world, that has been Ethereum development https://www.blockchainx.tech/erc20-token-development, which has long been occupying the second place in popularity among current Blockchain options.
To know what Ethereum is, we must know what Blockchain is. Thus we can define it as an open software platform based precisely on the blockchain, which also allows developers to create and implement decentralized applications. That is, Ethereum is a Blockchain on which different projects can be created.
Although Ethereum is a distributed blockchain network like Bitcoin, it has important technical differences and a different purpose as well.
In fact, its developer, the Russian writer, and programmer Vitalik Buterin , mentioned this project in 2013, when he was working on Bitcoin. For him, this Blockchain had to be more customizable and have smart contracts, which automatically determine when payments had to occur. That is why Buterin decided to step aside from the Blockchain pioneer and create Ethereum.
The creation of Ethereum also gave rise to a term widely used today in the crypto world: the Initial Coin Offering ( ICO ), which consists of raising funds for the application of a project based on Blockchain. After selling 60,000 million tokens, called Ethers (we will see them later), the entire Ethereum ecosystem was developed.
Today this platform has given rise to multiple projects with blockchain technology and has become a reference within the industry. So let's take a deep dive into what Ethereum is and what it offers.
Ethereum, a Blockchain beyond money
As we already know, Ethereum is also a Blockchain or distributed ledger technology, but it has a Turing programming language and allows anyone to create smart contracts or decentralized applications just by writing the logic in few lines of code.
The idea that Vitalik Buterin had with Ethereum was to improve the version of Bitcoin in terms of custody of the blockchain, withdrawal limits, financial contracts or random gaming market, and all this through a very generalized programming language.
But both cryptocurrencies are closely related.
At its core, the development of Ethereum https://www.blockchainx.tech/erc20-token-development protocol moves far beyond the currency. Today its platform serves as decentralized file storage, decentralized computing, decentralized prediction markets, and non-money-related applications.
That is why this new technology maintains a certain distance from the target of Bitcoin. But what are the most prominent differences between Bitcoin and Ethereum? Let's see them below.
 
4. Bitcoin and Ethereum, sister Blockchains but with different approaches
Practically Bitcoin pretends to be a deposit of wealth, something like a new digital gold, with which people can progressively replace conventional money. Instead, in the field of smart contracts and decentralized applications, Ethereum wants to become a great platform. In other words, a new world computer.
While Bitcoin stores balances and transactions on the blockchain; Ethereum stores other data related to finances, personal information, health or governance. This data is accessible and usable from running computer programs called decentralized apps or “dapps”.
Among the main differences between Bitcoin and Ethereum, the following stand out:


Bitcoin applies the blockchain to make online Bitcoin payments between peers, while Ethereum development https://www.blockchainx.tech/erc20-token-development uses its blockchain to create new decentralized applications.


Although both have their tradable cryptocurrencies, Ether (Ethereum's cryptocurrency) is mined so that application developers can pay transaction and service fees on the Ethereum network. Bitcoin is only mined to preserve its value.



Within Ethereum there is a second token: Gas. It is used for the payment of miners that include transactions in their block. Each smart contract execution requires a certain amount of gas to entice miners to take the transaction and include it in their blocks.

Bitcoin has a fixed number of production: 21 million. For Ethereum there is only an annual production ceiling of 18 million.


Both Bitcoin and Ether result from a process called mining. However, Ethereum wants to migrate to a new consensus algorithm in development, called Casper, which should be more environmentally aware than mining is.


Now that we know the main differences between both cryptocurrency models, it will be important to know how Ethereum works.
4. How does Ethereum work?
Ethereum bases its operation on a virtual machine or ethereum Virtual Machine (EVM), which executes an intermediate code or bytecode, which is a mixture of LISP,  E nsamblador, and  Bitcoin script.
This machine allows anyone to run any program regardless of the programming language they use. The creation process for blockchain applications is much easier because, instead of having to create a completely original blockchain, it allows the development of thousands of different applications on the same platform.
The programs that carry out smart contracts are written in complete Turing- like high-level programming languages, such as Serpent or Solidity. But what is a smart contract?
A smart contract is a term used to describe a computer code that can facilitate the exchange of anything of value: money, content, property, or shares. Applying a smart contract on the blockchain implies that this self-operated computer program will run automatically when certain specific conditions are met. As these contracts are executed within the Blockchain they will be executed as they were programmed, without the possibility of censorship, unavailability, fraud, or interference from third parties.
For example, if Juan has his identity document, will, and property of his house registered in the Ethereum blockchain, it is expected that when he dies, his death letter will be uploaded to the network. With it, Ethereum could automatically start another series of procedures thanks to the programming of smart contracts: your will and the transfer by inheritance of your house, to say the least.
Ethereum smart contracts claim to make daily life simpler, more efficient, and less expensive. How? Automating common processes and eliminating intermediaries that delay these procedures so much.
With Ethereum, any centralized service can be decentralized, from financial services to the registration of titles or elections at different levels. But it can also be used to create Decentralized Autonomous Organizations (DAO ). These are organizations without a single leader, which are executed by programming code, on a collection of smart contracts written on the Ethereum blockchain. This code replaces the rules of a work organization chart and thus eliminates the need for certain personnel. The DAO is owned by everyone who buys tokens, but these do not amount to shares of equity or property, but rather grant voting rights to their owners.
Currently, Ethereum is also used as a platform to launch other cryptocurrencies. Based on the ERC20 token standard, defined by the Ethereum Foundation, any developer can issue their own token versions and collect funds with an ICO. In this way, fund collectors establish their collection strategy, the goal to be achieved, and receive Ethers in return during said collection. With that financing model, Ethereum has raised billions of dollars from ICOs on its platform. Even EOS, one of the most valuable cryptocurrencies in the world, is an ERC20 token.
We already know that Ethereum is not just a network to reflect transactions of monetary value; it is a network that feeds contracts based on its protocol. These contracts are open source that can be used to securely run various services: financial exchanges, trade agreements, voting systems, intellectual property, and decentralized organizations.
5. Ether, the fuel of Ethereum
If Ethereum works that is thanks to Ether, the cryptocurrency used by the platform's clients to pay other people or machines that execute the requested operations. It ends up being the incentive to ensure that developers write quality applications and that the network remains in balance.
Ethers were first offered in a presale in 2014, under the already seen ICO model. At that time, the agreement for its production and distribution was as follows:


60 million for the taxpayers of the presale.


12 million (20% of the 60 million) were destined for a development fund (apart for taxpayers and another for the  Ethereum Foundation ).


3 Ethers were created for each block (approximately 15 seconds).


If a miner found the solution to the transactions and their block was not included, Ethereum gave them a reward of 2 or 3 Ethers. This was called the “Uncle / Aunt Reward”).


Within the terms agreed by all parties at the 2014 ICO, Ether limited its production to 18 million per year (30% of the initial offering).
The platform hopes to move to a new consensus algorithm in development, called Casper, which is intended to be more effective and less subsidized by miners. The exact method of issuance is still unknown but the maximum annual production originally set has been guaranteed to be a limit that Casper will not exceed.
The Ethereum network works on computers around the world. For this reason, the system rewards the team that was able to create the last block in the chain . Through this process, which occurs approximately every 15 seconds, the computer that generated this block will receive 3 Ethers. This process is random and allows to reward in proportion to the computing power that each machine has. These storing, calculating, and rewarding tasks are known as "mining."
 
In addition to Ether, in Ethereum there is Gas, the fundamental unit of computing within the network . This number was created to avoid any computational waste in the code. For this reason, each transaction is obliged to establish a limit to the number of computational steps of code execution that the machine can do.
There is a 5 gas fee for each byte in the transaction data. However, there are higher prices because some operations are more computationally expensive or because they increase the amount of data that must be stored as part of the state.
What Ethereum seeks with gas is to force each user to pay proportionally for each resource they consume, including computing, bandwidth and storage.
Those who need Ethers are mainly developers who want to build decentralized applications on top of Ethereum and users who want to access it and interact with smart contracts. However, buying Ether can be quite an interesting investment opportunity.
 

Ethereum represents the second generation of blockchains after the technology became known with Bitcoin. In contrast to Bitcoin, the Ethereum blockchain is also able to work with smart contracts . Smart contracts provide if-this-then-that logic.
This enables the automatic execution of actions between companies or within the company. Smart contracts enable the administration of all actions relating to payment transactions, but offer many more functions. The best-known areas of application for smart contracts can be found in supply chains. Of course, this also applies to smart contracts when used in the Ethereum blockchain.
Digital transformation with the blockchain
In the Ethereum blockchain, it is possible to use various programming languages, for example Solidity, to program smart contracts and save them in the blockchain. Bitcoin is unable to do this. In this post we show some of the most popular ways to use smart contracts in the Ethereum blockchains. Smart contracts are generally computer programs that are stored in the blockchain and can also perform actions in the blockchain.
Smart contracts are one of the most important areas of application for blockchain technologies. Within a blockchain, developers can program smart contracts that carry out actions in the blockchain. These are automatically running processes with which companies can also bill certain processes.
Especially in supply chains where goods are produced, stored, transported and processed by partners at different locations, smart contracts can ensure more security, speed and transparency. If a certain value is reached at one node in the supply chain, this triggers a transaction in the blockchain for another node. It is possible to fully automate delivery processes and the associated payment processes. Of course, this has some advantages in an international environment.
Enterprise Ethereum Alliance expands the possibilities
The Enterprise Ethereum Alliance is expanding the specifications that are available for smart contracts in the Ethereum blockchain development https://www.blockchainx.tech/erc20-token-development, but also all other options in the Ethereum blockchain. The alliance has the task of promoting the use of Ethereum in companies. The Enterprise Ethereum Alliance is one of the world's largest blockchain initiatives. For example, Santander, Accenture, Microsoft and other large companies are involved.
The Enterprise Ethereum Alliance also provides a testnet for developing your own smart contracts . The test network offers an easy way to develop decentralized apps or smart contracts. The advantage of the test network is that developers can also carry out security tests and thus check at any time whether their own smart contract is working optimally. In the test network it is also possible to create your own nodes for the Ethereum network. This makes it very easy to operate smart contracts in a production-related environment.
Contracts for banks and financial services
Since smart contracts are a function of blockchain technology, areas of application around and around the topic of financial services are of course particularly well known. Since Bitcoin, blockchains have been known primarily for cryptocurrencies and financial transactions. For this reason, when using the Ethereum blockchain, in addition to the cryptocurrency ether, smart contracts can also be used, which focus on financial services and the transfer of currencies.
Of course, banks or other financial institutions also benefit from this, where payment transactions and other tokens are also transferred internationally without further intermediaries. All transactions in the blockchain are completely transparent and can therefore be traced at any time. This is of course ideal for payment transactions and errors and fraud are almost impossible. Most companies have different uses when it comes to conducting financial transactions. In banks and financial institutions, the blockchain with smart contracts can of course offer enormous advantages for carrying out transactions. This also saves banks a lot of costs and, above all, can offer additional financial products.
Banks and financial institutions are already partially relying on Ethereum to carry out such transactions with smart contracts. For example, LBBW has started a project with Daimler to process financial transactions via the blockchain. For this purpose, Daimler has positioned a promissory note loan at LBBW and mapped all financial transactions in the blockchain. This includes placement, allocation and the conclusion of contracts. All processes are completely digitized and can therefore be carried out more quickly.
There are werder letters, faxes or other actions that employees have to carry out offline. All actions run completely via the blockchain and the stored smart contracts, which handle all actions according to the "if-then-then-that" logic. The processes are mapped in a legally secure manner and show the possibilities of smart contracts in the blockchain. However, fully legally compliant smart contracts for financial transactions are still difficult to implement because the technology is still quite new. The areas of application in this area can range from mortgages and transfers to paying bills or other transactions.

Startups: Initial Coin Offering and Decentralized Autonomous Initial Coin Offering
Initial Coin Offering (ICO) and Decentralized Autonomous Initial Coin Offering (DAICO) are also processes that can be optimally processed with smart contracts. For cryptocurrencies, an ICO basically corresponds to the process known as the Initial Public Offering (IPO) for securities. In an ICO, the developer of a new cryptocurrency offers part of the currency for sale for a while. Either conventional currencies or other crypto currencies are conceivable as payment.
Most of the time, these processes take place quite quickly after the establishment of a new cryptocurrency. Ethererum, for example, did this. The point behind this is to bind investors to a new cryptocurrency. Digital startups, for example, benefit particularly from the nature of the process. Investors benefit from the technology of smart contracts, as the underlying processes are completely digital, falsifiable and transparently traceable. Ethereum smart contracts development https://www.blockchainx.tech/erc20-token-development are ideal for ICO and token sales. Through ICOs, money flows from investors in a crypto currency to the developers of the respective currency.
Allow more control for investors with DAICOs
With a Decentralized Autonomous Initial Coin Offering (DAICO), the models Decentralized Autonomous Organization (DAO) and Initial Coin Offering (ICO) can be combined. DAICO are enhanced ICOs that provide more security and control, especially for the investors. A DAICO starts with a smart contract that controls the payment of funds to the developers of a project.
In this model, developers can gradually receive funding from an ICO that is dependent on roadmaps, i.e. the progress of the project. Through actions and conditions, smart contracts enable the automated processing of ICOs and the payment of amounts to the developers, depending on the progress of a project. There is also the possibility that investors get their funds back if they are not satisfied with the project. At DAICOs there are exit opportunities for investors. This in turn can attract more investors, as they do not commit themselves in the long term, but can withdraw from their investments if there are problems with the project.
The biggest difference between DAICO and ICO is that with an ICO, developers can immediately use the money invested by the investors. At a DAICO, a smart contract can check the individual project steps and release capital depending on them. This prevents SCAM ICOs or too much cash flow at once for the developers of the token to rest on. A DAICO protects the investors and offers developers the advantage of finding more investors in a much more serious and reliable manner.
In a DAICO, the tap variable can be used to specify that developers receive a certain amount per second from the tokens sold. The tap variable can increase, the processes are specified in the smart contract. DAICOs give investors significantly more control over the smart contract and developers have incentives to continue working effectively on the project, as they are rewarded for further development.
Smart contracts replace middlemen and supervisory bodies
Trustees and intermediaries are necessary for many projects and campaigns between companies. These are expensive and delay processes, especially in international transactions. With the Ethereum blockchain development https://www.blockchainx.tech/erc20-token-development and smart contracts, middlemen can be replaced. Basically, a DAICO's smart contract is also a digital broker that controls the disbursement of chapters. Smart contracts can also be useful in other areas in this way and serve as an intermediary.
By doing business with the blockchain, it is also possible to make all processes tamper-proof. By using smart contracts, the individual processes can also be completely automated. In addition, there is the advantage of complete transparency of all processes. The smart contract carries out all actions in a legally secure manner. The areas of application are diverse.
From use in supply chains to real estate, wills and other businesses where intermediaries are required, smart contracts can be an ideal addition. A smart contract can not only carry out the individual processes more securely and transparently, but also much faster. Since the processes start automatically, the smart process can carry out all processes without human intervention. Since the transactions are stored in the blockchain, employees and users can track all actions carried out by a smart contract at any time.
Digital identities - preventing identity theft
With the Ethereum blockchain, it is also possible to prove digital identities beyond doubt via smart contracts. The technology can also be used for access control via RFID chips. With the blockchain, digital identities can also be displayed in a forgery-proof manner, which also prevents identity theft.
Exchange sensitive data - digital patient files
Smart contracts also enable the exchange of sensitive personal data, for example patient files. The smart contract can be used to control which group of people has access to the individual areas of the patient record. This prevents unauthorized persons from gaining access to patient data, but at the same time ensures that the data is still available to the people who are supposed to view it. The authentication of the persons can in turn be handled in a forgery-proof manner via the digital identities, which can also represent a smart contract, possibly even the same one.
Prevent product counterfeiting with smart contracts
As part of the international tracking of supply chains, it is also possible to identify products at any time. The supply chain is processed using smart contracts, and the individual products can also be recorded in the blockchain. As a result, the blockchain recognizes every product and knows its location. Using sensors or chips, it is possible to quickly identify counterfeit products. Similar technologies are used here, as with the use of digital identities in the blockchain and the integration of sensitive information.
Smart contracts ensure the integrity of the supply chain and the products it contains. All routes that a product takes in a supply chain are part of the blockchain and are therefore permanently stored. This transparency also enables comprehensive tracking.
Ensure the cold chain with smart contracts
Not only can counterfeit products be prevented with smart contracts, supply chains can also be traced. The smart contract also enables cold chains to be tracked. In the blockchain, it is fully traceable when, where and for how long a product was stored. Together with RFID chips and sensors, whose data is also stored in the blockchain.
Supply chain law and smart contracts in the blockchain
At the same time, a smart contract can also help to check environmental protection and, above all, compliance with human rights within the scope of the Supply Chain Act (“Act on Corporate Due Diligence in Supply Chains”). The blockchain offers numerous possibilities here, especially in international supply chains. From 2023, all companies with more than 3,000 employees will have to comply with the law, from 2024 all companies with more than 1,000 employees.
Smart contracts in the HR department
Smart contracts can also be used in the HR department. Since sensitive data is also stored here, similar to that in patient files, the blockchain can help to make the data only accessible to people who are authorized to do so. Here, too, smart contracts help ensure that the accessing employees can be identified using digital identities. Of course, it is also possible to process employment contracts using smart contracts. However, these processes still belong to the rare areas of application, but will probably be used more frequently in the future. Payroll accounting is also possible via the blockchain, as is payment via smart contracts. Payment with a crypto currency is also possible here.
Check certificates and qualifications
Smart contracts can also be used for training and further education to ensure that certain certificates are not falsified. When checking qualifications, ambiguities arise time and again, which causes significant effort. Smart contracts between training institutes and companies make such checks easier and faster. In addition, there are the most important advantages of the blockchain: forgery-proof, transparent and unchangeable.
Conclusion
In this post, we discussed the possibilities that smart contracts with the Ethereum blockchain offer. It is worthwhile to examine the possibilities of smart contracts more closely, since most companies have numerous areas of application for smart contracts, which can significantly accelerate processes and make them more secure.

Interested in an ether blockchain fired last year as developers turned to it to create various decentralized financial projects and digital tokens called non-fungible tokens (NFTs).
The boom has created a powerful net effect, as increased activity draws more and more developers to Ether. This could make it the platform for web 3.0, where a host of decentralized applications may one day challenge Big Tech's offerings.
“60% to 70% of the industry is powered by a development of ethereum https://www.blockchainx.tech/erc20-token-development , ” says Sandeep Nailwal, co-founder of Polygon, one of the many companies that trade in currencies. As a result, the price of the digital currency ethereum multiplied by nine. The value of the featured ether tokens is $ 350 billion, more than 40% of the value of bitcoins, and the percentage has more than doubled in the year.
But there are still fundamental questions about whether Ethereum, which is far behind in its technical updates, will be able to compete with more agile rivals and whether there is consensus on its long-term role. Until there is an answer to this question, it is likely that the price of ethereum tokens is volatile.
The increase in the price of Ethereum is due to two hopes. One is that it has entered a new phase where the number of tokens in circulation will increase much more slowly than before or even decrease. In fact, the offer has already been reduced after a change last month in the way of validating transactions on the network. Some of the tokens that were previously paid as commissions to people who validate transactions are being destroyed.
Another big step could occur later this year or early next when the current "proof of work" system is replaced, which consists of coin miners contributing their computing power to the network in exchange for receiving cash. ethers - by "proof of stake", in which validators deposit on the development of ethereum network https://www.blockchainx.tech/erc20-token-development . This change has important monetary implications.
At the end of last year, a gambling test chain was launched. Approximately 6% of the ether supply has already been deposited there by its holders to support transactions, thus obtaining an annual return of up to 5%. This is an indication of the amount of ether that will be out of circulation once the transition is complete.
different bitcoin, ethereum was not created with a clear monetary vision nor was there an upper limit on the number of tokens that could be created. But a big reduction in the supply of tokens could change that, making it more attractive to investors. Its creator, Vitalik Buterin, stated that it will adapt to the needs of its users, as changes are made to the way in which tokens are created and therefore to its long-term offering.
The second hope is that ether is a fundamental part of the infrastructure due to its function of “smart contracts”, software code that runs automatically when certain conditions are met and that allows decentralized financial projects to be carried out.
Despite the fact that its network capacity is very limited. As its maximum capacity is only 15 transactions per second, in times of high activity, the rates of use are high, so only the highest value transactions can be carried out. This is one of the reasons why new blockchains emerged. increased processing power, Avalanche, Solana and Cardano, received a lot of support and played a much bigger role in the network this year, according to Buterin, but they still need to prove themselves. The price of tokens on the Solana blockchain has more than quadrupled since the beginning of August as it has become the platform of choice for selling new NFTs.
But despite Ether's limitations, its supporters claim that its leadership in smart contracts will be unassailable, given the sheer number of developers already building applications with it. Strong blockchain programming language. Also, to attract more developers, most new blockchains allow them to run their applications on 'ethereum virtual machines', thus maintaining demand for ethereum and guaranteeing transactions.
Another mechanism to reduce the transaction processing burden is 'layer two' networks like Polygon: they process transactions on their own networks and then bundle and host them on the ether blockchain as a single transaction.
For your part, Ether plans to implement a series of new functions in its network. One is the switch to test bets. Another consists of “fragmenting” the network, that is, dividing it into 64 separate but interconnected parts, which reduces the pressure on each node of the network by not having to validate each transaction. Buterin says he is also working on other changes to reduce the load and that within two years some of them will have significantly increased the capacity of the network.
However, given the uncertainty about the role that ethereum will play in the long term, investors are warning that cryptocurrency markets could be about to undergo a turn that would see Bitcoin once again in unquestionable dominance.

Now that we know a little more about tokens, we are going to delve into another very important concept in Ethereum development https://www.blockchainx.tech/erc20-token-development which is ERCs, Ethereum Request for Comments.

The ERCs, Ethereum Request for Comments, are proposals generated by the community or the Ethereum developers themselves in order to promote this blockchain platform, generating interoperability in the ecosystem and facilitating the integration of these by applications that make use of tokens. standards medium. In turn, ERCs are nothing more than a type of EIP (Ethereum Improvement Proposal) at the application level, which to become standards must first go through consultation and review phases until they are approved.
Next, we are going to discuss the main ERCs token standards that exist today:

ERC-20 Token
Currently, although its functionality is basic, it is the most widely used and most relevant standard due to its great interoperability in the environment.

Provide the methods of token transfer (transfer), approval or authorization of use of your tokens to another Ethereum address (profit), authorized token transfer from another Ethereum address (transferFrom), current balance query (balanceOf), and query of the number of tokens possible to use on behalf of another Ethereum address (allowance). In addition, there are two types of events (Transfer and Approval) that are triggered when a transfer or approval is made.

To characterize the token, a value must be assigned to a series of attributes in the form of a variable. The only mandatory parameter is the number of total available tokens (totalSupply), the others such as the name (name), the symbol (sym), and the number of decimals (decimals) are optional, although important if you want to give more detail to your token and distinguish it from others. The number of decimal places offers the ability to subdivide a token unit into 18 decimal places.

But, where is the balance of each user who owns that token kept? Good question. To save the balances, a 'mapping' type variable is used, which relates an Ethereum address with its corresponding token balance: (mapping (Address => uint256) balances)
In the 'Etherscan' explorer you can check the number of existing tokens deployed in the main Ethereum network, as well as their value and more information. At the time of writing this article, there were 125,699 ERC20 tokens. Probably when you look back at this number it has grown quite a bit, as new ones are being deployed every day.
ERC-721 Token
The ERC721 is the standard of NOT fungible token par excellence (called NFT, Non-Fungible Tokens). The concept of "NO fungibility" comes to say that it is unique and cannot be replaced by another. Another characteristic resulting from the above is its indivisibility, since it remains as a singular unit, unlike the ERC20. It is therefore a non-consumable token, but it is exchangeable. It can represent anything from ownership of a work of art to a loan or a traffic ticket. An example of a non-fungible token could be the owner of a house since it is something unique and indivisible that when you transfer it to another person it becomes part of their property and you would stop owning it. An example of a fungible token would be money, where a monetary unit (for example, a € 1 coin) is equal and has the same value as another monetary unit (another € 1 coin).

Each ERC721 token is identified by a unique, non-modifiable ID (uint256, 256-byte integer), and an Ethereum address. It implements the ERC20 methods, attributes and events (name, symbol, totalSupply, balanceOf) in order to have compatibility between applications, even if it does not make the same use of them. For example, in the case of the decimal (decimals) attribute, it must correspond to a 0, since as we have mentioned it is an indivisible standard. In addition, it provides new methods such as the secure transfer of a token (safe transfer from), previously verifying that the address that carries out the transfer is that of the owner of the token; property (owner), to query the address to which the token belongs; or taking ownership of the token (take ownership), from an authorized address.

Other possible implementations to carry out can be to reject transfers if the contract is paused, create a list of safe or authorized addresses, reject non-secure transfers, charge the cost of the transaction to both parties, etc.

At the moment, its use is inferior to the ERC20, although it must be recognized that its future is very promising. In the 'Etherscan' explorer it can be seen that there are 262 ERC721 tokens deployed on the Ethereum mainnet.

The most popular application example using this ERC721 standard is CryptoKitties. It is a decentralized application that allows you to acquire, collect and exchange kittens, among other things. Although it seems like a silly game, the approach is really valuable, since for the first time you are the owner of a unique digital asset that you can trade with others in a decentralized way.
Other possible ERC token standards
In addition to the main ERC20 and ERC721 standards, there are others that are in the draft phase waiting to be approved or rejected. Let's see a summary of the most interesting:

Token ERC-777 - New Advanced Token Standard
It is an improvement of the ERC20 that incorporates more advanced functionalities such as:

• Implement a send function: send (to, amount, data), instead of the usual transfer function: transfer (to, amount).

• It allows to control and reject tokens sent/received by registering “hook” functions: tokensToSend (operator, from, to, amount, data, operator data), tokens received (operator, from, to, amount, data, operator data). It is useful, for example, to give the sender or recipient the option to intervene in the transfer and even reject it.

• Incorporates the figure of “authorized operators”. It allows authorizing or revoking addresses of Smart Contracts or users to move tokens on behalf of the owner and create additional functionalities to the token: autorhizeOperator, revoked operator

Token ERC-823 - Token Exchange Standard
Development of ERC20 https://www.blockchainx.tech/erc20-token-development that incorporates an exchange service facilitating cross payments of tokens. It allows the holder of an ERC20 token to exchange it with another ERC20 using an exchange token to make the transfers: exchange token (target contract, amount). It implements variables of type “mapping” to relate: address and amount of the exchanged token (exchanged with); address of the person initiating the exchange and the amount (exchanged); and the number of tokens received and the address of the person who issued it (exchanges received).


Token ERC-918 - Mineable Token Standard
The minable token standard uses the “Proof of Work” algorithm for its own distribution. The tokens are distributed following the IMO model, “Initial Mining Offering” as if it were an ICO. Implement a mint () function that acts as a tap controlling the rate of token distribution and minimizing costs.


Token ERC-998 - Composable Non-Fungible Token Standard
Improvement of the ERC721 standard that allows a token to own or be owned by ERC721 and ERC20 tokens, so that they can have “child tokens” or “parent tokens” respectively. It allows forming property trees based on the relationship between each token as if it were a family tree.

ERC-1080 Token - Recoverable Token Standard
ERC20 standard development supports the return, theft prevention, and recovery of tokens. Functions of the type must be implemented: claimLost (Address lost account), report stolen (), chargeBack (uint256 pendingTransferNumber). All of them must return the success or failure of the operation as a response (boolean type).


How to implement my own tokens for applications
Creating a token is very simple, just use a template that implements any ERC standard and characterize it in your own way, but creating it to be efficient and secure is not so easy. In general, all standards are just a pattern or scheme to follow that needs to be shaped, and that is where the problem arises. For example, inside the transfer () function, you could develop malicious logic so that, for each transfer, an X amount of tokens is increased in your favor. You could also implement a token in a correct but vulnerable way, losing all balances or even causing the destruction of the token.

For all this, it is advisable to use resources such as Truffle or OpenZeppelin for the development of secure Smart Contracts. In the OpenZeppelin GitHub repository, you will find examples of tokens implemented and ready to be used.


conclusion
The token world is still in a stage of maturity and growth. There is still a long way to go to digitize everything that surrounds us. What we cannot deny is that the Token is going to represent a paradigm shift in the way of exchanging, transferring, and giving value to assets.

Ethereum is not just a type of cryptocurrency. It is the most popular engine that enables token creation. This development platform allows users to, for example, create DApps (decentralized applications) using smart contracts. It is also possible to devise tokens through smart contracts. Currently, Ethereum tokens have an implementation standard known as ERC-20 token (from Ethereum Request for Comments). Extensions to the standard are also developed, which improve the operation of the tokens: ERC-223 and ERC-721.
Anyone who has been working on the topic of cryptocurrencies for some time has probably heard of the ERC-20 token. The ERC-20 implementation standard allows for uniform implementation of the functionality. Among other things, it offers advantages such as easier implementation by developers or the possibility of using tokens with third-party software. This is possible because the nomenclature is fixed and the developers simply know what to expect.
What is ERC-20 Token?
To put it in specialized terms, and in its simplest formulation, ERC-20 is a protocol that consists of a set of individual guidelines. With ERC-20 tokens are created on the Ethereum blockchain and use its technology. The main cryptocurrency based on the Ethereum network is Ether, but this does not mean that other tokens cannot exist in it. Thus, in simpler terms, ERC-20s are tokens that have been built on and use the Ethereum network.
For this, a smart contract is essential. It is not only used to create tokens, but also to manage or monitor transactions. To receive the tokens in question, you have to spend a certain amount of ETH to the Smart Contract, in exchange for which the Smart Contract will send you these tokens. Thus, an ERC-20 token development https://www.blockchainx.tech/erc20-token-development can be done by any of us without having to be a programmer. You don't need specialized knowledge. You just have to use a smart contract to become the creator of your own token.
It is important that you know that there are many more tokens than cryptocurrencies. A token is not always a cryptocurrency. These represent some fact, value, or quality. A token is often used, for example, in a casino as gift cards or vouchers. Why was such a unit of value created? Because the developers wanted to be able to manage the business model themselves. As a result, users on a given network are directly connected to its products.
How do ERC-20 tokens work?
ERC-20 tokens operate within the Ethereum blockchain. The ERC-20 token implementation is famous for the ability to independently create your own digital asset, as well as a smart contract. The process of bringing them to life is equipped with the ability to independently determine the maximum supply value, the possibility of divisibility of the new token, and basic information about the name or abbreviation of the newly created token.
ERC-20 is a protocol that allows you to authorize the execution and execution of token transactions based on these principles, with the participation of third parties. An ERC-20 based token must define multiple functions. These include:
Name.
Symbol.
Decimal places that determine the token's divisibility.
The total amount of available tokens.
The status in the indicated account and the function that allows you to make transactions.
The ability to transfer tokens to other accounts through third parties, being able to consult and establish a maximum limit to the amount that a third party can manage.
Of course, it should be noted that implementations of the ERC-20 interface may vary in detail. They can also be more elaborate, providing additional functionality (for example, such as freezing some funds, managing ETH transfers, or automatically granting tokens in exchange for cryptocurrencies). Depending on the goals of the creators, tokens created with the ERC-20 protocol can support security or put a strong emphasis on saving the gas consumption of the contract.
Why were ERC-20 tokens created?
There were many compatibility issues between the various forms of Ethereum tokens before the advent of the ERC-20 standard. Each token had only one smart contract. The platform had to write completely new code for every transaction and wallet in order to add a new token to its network. Maintaining a growing pool of tokens was becoming too troublesome and time-consuming. As a solution, the platform proposed a standard protocol for all the following tokens: ERC-20.
The ERC-20 was created to make it easier for developers to create new tokens without having to start over every time. The ERC-20 protocol has functions that show how tokens can be transferred and how to access data related to tokens. The events, on the other hand, contain formatting guidelines for transfers and approvals. The ERC-20 token standard was introduced mainly due to the increased interest in ICOs.
Advantages of ERC-20 tokens
Among the advantages of the development of ERC-20 tokens https://www.blockchainx.tech/erc20-token-developmentis the saving of time and resources. ERC-20 tokens take advantage of the existing Ethereum infrastructure rather than creating a completely new blockchain for them. In addition, they have greater security, since the creation of new tokens increases the demand for Ether, which makes the entire network even more secure, that is, less susceptible to a potential attack by hackers.
Another of its advantages is interoperability with other compatible tokens and decentralized applications on Ethereum. If all the tokens created on the Ethereum network use the same standard, these tokens will be easily interchangeable and can easily work with other applications in the same ecosystem. We cannot fail to mention among their advantages the great liquidity they provide since ERC-20 tokens are used as a work base for most projects in blockchains.
Disadvantages of ERC-20 tokens
The most important thing to remember about ERC-20 tokens is that they can be created very easily, but that does not mean that they are completely secure. The basic data of the smart contract does not guarantee that the token works correctly. As a result of the ease of creating tokens with ERC-20, the market is flooded with ICOs and unnecessary tokens, and worse, fraudulent ones. Additionally, if someone wants to send an ERC-20 token to a wallet address that does not have a smart contract, these tokens can be lost.
ERC-20 tokens are underperforming, as the Ethereum network has bogged down when DApps have been in high demand, such as CryptoKitties (which has since moved to its own Flow blockchain). When this happens, the network slows down and transactions become more expensive. Also, transactions are slow where the lock time is around 14 seconds, so transactions can take up to a minute to process.

If you follow the financial market, you may have already heard about cryptocurrencies. They have been gaining more space and prominence in the market and the media. With this, the list of cryptocurrencies also tends to increase.
Cryptocurrencies are digital currencies. All over the world, many companies accept cryptocurrencies in payments. Just like physical money, such as the real or dollar, they can be used to carry out transfers and business transactions.
The difference is that negotiations take place online only, through a device connected to the internet. Coins are created from digital systems. As they are not linked to a specific country, they do not follow regulations from a Central Bank.

1. Bitcoin
Bitcoin is the best-known virtual currency. It was the first decentralized global payment system. This means that he is not directly linked to any country. Thus, the quotation is not subject to the laws of any specific government.
Developed in 2008, bitcoin was the first major cryptocurrency released. It was aimed at replacing paper money and ending the need for the influence of banks to broker financial transactions.
Bitcoin is mined and traded through technology. Currency transactions are recorded in a complex computer system called a blockchain. This system depends on several computers around the world to function.
Mining (obtaining new currencies) and bitcoin transfers are recorded in the blockchain, which works like a ledger. It also ensures more security to operations, as it makes attacks by malicious people more difficult.
Although bitcoin is an unbacked currency, it is increasingly accepted as a form of payment by companies and institutions around the world. For this reason, it remains one of the main cryptocurrencies on the market.
2. Ethereum
There are some similarities and also differences between bitcoin and ethereum – which was originally called ether. However, in 2016, a hacker found a flaw in the cryptocurrency system.
With that, he managed to steal the equivalent of $50 million worth of ether. This action caused several doubts about the future of the currency, so the community that maintained it decided to create another network.
Thus, the original ether, which was the target of the robbery, came to be called ethereum classic. And the virtual currency that started to circulate in the new network was called ethereum. With the support of its community, it came to be worth more than the first version.
Unlike bitcoin, ether was not created to be a digital currency. The goal was for it to become an asset to reward developers for their contributions to the Ehereum platform and their projects.
Ethereum development https://www.blockchainx.tech/erc20-token-development is among the most traded virtual currencies in the world. The platform is decentralized and used to carry out smart contracts. That is, they are operations performed automatically when certain conditions are met.
The blockchain is also the basis used for validating transactions with ethereum, ensuring security, and preventing fraud. As with bitcoin, the process of creating new cryptocurrencies is based on mining.
3. XRP
Ripple was created in 2011 and is a distributed payment protocol. It has a currency native to its system, the XRP. The platform has the differential of supporting other tokens in its network, which can represent traditional currencies and other goods.
The system seeks to allow secure and instant payments. In a way, Ripple is similar to banking institutions, as it accepts different assets and facilitates the execution of transactions. Thus, he moves away from the ideals of other cryptocurrencies.
The speech aims to end the dependence on the traditional financial system to carry out transactions. Thus, the XRP virtual currency was conceived in 2012 by developer Ryan Fugger, programmer Jed McCaleb, and entrepreneur Chris Larsen. Most of the coins remain in their possession.
Unlike other digital currencies such as bitcoin and ethereum, there is no mining process in Ripple. The system connects payment providers, banks, businesses, and digital asset exchanges to provide a frictionless experience and send money globally.
4. Litecoin
Litecoin is a cryptocurrency created in 2011 by Charlie Lee – a former Google employee. The coin has many similar characteristics to bitcoin, but the main difference is in the mining process.
The purpose of litecoin is to reduce the time it takes to confirm transactions made with the currency. The idea is to make it easier and simpler for anyone to participate in the process of developing new litecoins.
Another intention of litecoin is to be a virtual currency accessible to the general population. To do this, Charlie Lee sold all his shares. Thus, he could not interfere with cryptocurrency prices.
Due to the faster processing, litecoin is considered a more efficient alternative for carrying out day-to-day transactions. On the other hand, bitcoin is seen as a better source of the store of value.
Also, litecoin was developed to produce more units. While bitcoin has a limit of 21 million coins, the limit for litecoin is 84 million.
5. EOS
The EOS platform was developed in 2018 by Brendan Blumer and Dan Larimer. The goal was to be a system for creating decentralized applications known as dApps. Also, the environment tries to solve several problems with ethereum.
For this reason, many people consider EOS to be an enhanced version of the ethereum blockchain. This is mainly because of the transaction processing speed, which is even faster.
This increased speed occurs through the protocol's parallel processing system. This means that the system is capable of performing multiple actions at the same time, which increases transaction rate and scalability.
While card operators, for example, perform a few thousand transactions per second, EOS claims to be able to make millions of transactions per second. The initial cryptocurrency (ICO) offer raised $4 billion. Currently, there are nearly a billion tokens in circulation.
6. Cardano
The gimbal was created in 2015 by ethereum co-founder Charles Hoskinson. The platform has a very ambitious project. Its objective is to unite the best functionalities and characteristics of all existing cryptocurrencies in the world.
With this, the development of Cardano would be able to solve problems and offer new solutions for virtual currencies. The project is defined as the third generation of cryptocurrencies, so bitcoin would be the first and ethereum the second.
Cardano is also a smart contracts platform formed by a decentralized public blockchain and a token. The crypto active is facing the future with a view that already has long been a more work algorithm sustainable, such as the Proof of Stake.
The goal is to serve as an alternative form of payment in countries that have difficulty accessing banks. For that, one of its goals is to improve the speed with which operations are carried out.
Another outstanding feature of the Cardano is that it was the first digital coin based on a scientific methodology. This brings more robustness to your code, which is evaluated and reviewed by a large team of scientists, researchers, developers, and engineers.
7. Binance coin
The binance coin is an alternative in the list of cryptocurrencies for use within an exchange. These companies are responsible for mediating the relationship between buyers and sellers of virtual currencies.
The currency was launched in August 2017 by one of the largest exchanges in the world, Binance. It was created as a utility token for trading fee discounts. Over time, the cryptocurrency became the native token of the blockchain binance chain.
Virtual currency can also be used to buy virtual gifts, pay for travel expenses (such as hotel and flight reservations), make purchases using a credit card, among other services. Binance has constantly released new features that allow the use of the token.
The company's business strategy and strong asset performance received high praise from those working in the financial market. This made the currency one of the most traded in the world.
8. Stellar Lumens
Stellar Lumens was created in 2013 by one of Ripple's developers, Jed McCaleb. It is much faster and has a much cheaper transaction cost than bitcoin. In addition, cryptocurrency can perform up to a thousand transactions per second.
The initial intention of the project was to be the link between the virtual and traditional monetary worlds. Thus, the stellar project unites cryptocurrencies and physical money. The proposal is to be a multi-transactional platform for traditional currencies, such as reais, dollar, euro, etc.
This allows people to send and receive money quickly, with reduced costs and a decentralized exchange. The stellar lumens system is based on open source, as is bitcoin.
That way, anyone can work on their code to try to bring improvements to the project. Despite being launched with a good foundation at Ripple, Stellar has many differences from XRP.
The first distinction is that most stellar lumen coins were given away for free at their inception. Furthermore, cryptocurrency operates on its consensus protocol. In other words, it has a network of internal professionals capable of running this system independently.
This makes the process less decentralized than more traditional ones. However, the feature allows for a high degree of efficiency.
9. Chainlink
Chainlink is a blockchain platform that aims to simplify the use of smart contracts across different platforms. Created in 2017 by Sergey Nazarov, the system consists of a protocol to facilitate access to the best of these contracts for real-world applications.
There are two main points in the chainlink architecture. The first is the on-chain infrastructure, that is, inside the blockchain. The second is out-of-chain infrastructure, which is where real-world data is used with smart contracts.
All platforms join a chainlink's decentralized Oracle network. It uses multiple nodes to independently collect data and offer it to smart contracts. This makes it possible to avoid single points of failure.
Thus, the network helps to prevent conflicts in data transmission between different systems. The chainlink network can avoid the manipulation of information entering or leaving databases. It also acts as a link for interoperability between systems.
10. NEO
NEO is another open-source cryptocurrency project that uses blockchain technology and smart contracts. The goal is to automate the management of digital assets. So he can create the so-called smart economy.
The project started in February 2014 and was created by the company OnChain, based in China. Da HongFei, the company's CEO, aimed to develop a blockchain platform that would have the same features as ethereum and still perform other functions.
The concept integrates operations with smart contracts, digital identities, and digital assets into the blockchain. With this, the system can form a transparent and decentralized database, allowing companies to manage their operations and take advantage of new technological aspects.
In this way, it is possible to improve the efficiency of processes and reduce costs at the same time. The Chinese company is a leader in blockchain technology. In addition to being the developer of NEO, OnChain acts as the main link between the project and partner entities.
Now that you've checked out the list of top cryptocurrencies, you can research more about this market. Remember that investing or speculating in virtual currencies involves high risk. They are more exposed to market variations and tend to have high volatility.
 
 

12 Reasons to Invest in Ethereum 2021
Is it a good idea to invest in Ethereum?
What does this cryptocurrency have that many see as the most powerful competitor to Bitcoin? Will it be able to surpass the crypto queen?
Will it be a good investment?
We will solve these and many other questions in this guide on this popular cryptocurrency.
I anticipate that there are many who bet on this cryptocurrency but there are also many who say that it will not go too far.
Of course, you will not think that everything is a bed of roses when it comes to investing in Ethereum. No investment is risk-free and neither is this currency.
I'm going to cut to the chase and list the reasons why it is a good idea to invest in Ethereum and the reasons why it may not be such a good idea.
Advantages and disadvantages of investing in Ethereum
1 It's more than a cryptocurrency
Ethereum is not a cryptocurrency itself (Ether is the token that is used in it for exchanges), but a platform based on blockchain technology that allows to develop decentralized applications that use Blockchain in it, so its potential lies in its power as a kind of structure based on the programming of a possible virtual world. Bitcoin, on the other hand, is more of a pure currency.
2 Smart contracts
It can be used to create Smart Contracts with which its potential is enormous. It seems increasingly clear that the future of crypto is going to be related to this type of contract.
3 He's behind DeFi
This is one of the developments that are called to dominate the future of global finance and especially related to the virtual world. Many experts say that DeFi will eventually replace traditional centralized finance. At Harvard they are thinking that this may be the basis of future finances.
4 The NFT market depends on Ethereum
Another of the trendy markets for cryptocurrencies and everything related to the Blockchain. Stories like those of cryptopunks and other platforms have meant that these tokens have risen to fame.
These Non-Fungible Tokens that are based on smart contracts seem to be leading the way towards a new way of proving ownership of things, something that apparently can also be applied to physical goods, not just virtual ones.
Why is Ethereum important here?
Because a good part of the most important NFTs are built with the technology of this crypto.
5 The World Economic Forum bets on tokenization
The controversial WEF has published that it is expected that by 2025-2027 10% of the world's GDP will be tokenized, that is, it works under blockchain technology transactions. And what is the most powerful blockchain technology in the token market? Ethereum.
6 It allows to diversify in cryptos
Many investors are nervous about investing in only one or a few assets.
Bitcoin is the cryptocurrency that attracts the most interest and investment, but many of the investors who enter this market look for other assets where they can maintain a more diversified profile. In crypto the best asset to get into after Bitcoin is the https://www.blockchainx.tech/erc20-token-development development of ethereum, so any crypto portfolio that seeks to comply with this concept would do well to acquire this cryptocurrency in it.
7 It is a remedy against censorship
As it is a decentralized technology on the Internet, it is capable of resisting censorship attempts by the authorities.
For example, suppose a government wants to block access to a website in a country; something that is perfectly possible. What is not possible is that government eliminates a "transaction" recorded in the blockchain. In this way, a publication in the Ethereum system is recorded on a decentralized computer network to which the government has access. It is true that we can argue that the government can make it impossible for you to have a computer and therefore the above is of no use, but there we would already be in a more complicated form of dictatorship.
8 It has strong support from the institutional and financial world
Every year that passes, more large institutions are putting money into the cryptocurrency and therefore building positions in the Ethereum ecosystem.
For example, a software company developing Ethereum-based infrastructure received $ 65 million from UBS, Mastercard, and JP Morgan Chase. And this looks like it is only the beginning of increasing investments in this market.
Why is Ethereum not a good investment?
As I mentioned, not everything is easy for Ethereum. Don't think this was going to be the perfect asset, with no weak points. That asset, I'm afraid, doesn't exist.
9 Governments will end up banning cryptocurrencies
There are more and more rumors on the net and veiled threats from states about the problems posed by the cryptocurrency market and how they pose a danger to the world of central banks' FIAT currencies.
Many fear that the same government of the United States will end up banning cryptocurrency transactions and that this could affect Ethereum, in which case it is possible that the price would have big drops.
Undoubtedly, the situation is uncertain and explosive for the next few years.
10 In the end only Bitcoin will remain
In the world of cryptocurrencies, for example among the influencers of the sector on Twitter, there are some who say that in the end most cryptocurrencies will go to zero and that only Bitcoin is worth it. They claim that there is no room for many cryptocurrencies in a global financial system that will have to be based on the strongest one, which in this case would be Bitcoin.
This point of view seems quite dramatic but we cannot rule out anything in a world as wild and unpredictable as cryptocurrencies.
11 Important and growing competition in DAPPs
There are certain sectors and sub-sectors of the world of tokenization and DAPPs, where there are other more dominant cryptocurrencies that have eaten the ground from development of Ethereum.
It seems that the DAPP markets are strongly dominated by the cryptocurrencies NEO and Tron, with Ethereum remaining with only 3 of the first 50. In the gaming and casino niches the above cryptocurrencies are clearly dominant.
12 Particular security issues
The episode of years ago with the separation of Ethereum and Ethereum Classic after a historical hack is still remembered by some, so it is always recommended to exercise caution in these blockchain paradigms.
It is true that since then Ethereum has had an impeccable record of stability and has proven to be very difficult to hack. Hopefully it will continue like this in the future.
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What is Ethereum?
The development of ethereum https://www.blockchainx.tech/erc20-token-development is a decentralized computing platform. It can be thought of as if it were a computer, but it doesn't run on a single device. Without a single owner, it runs simultaneously on thousands of machines around the world. Ethereum, such as Bitcoin and other cryptocurrencies, enables the transfer of digital money. However, it is capable of much more – we can implement our code and interact with applications created by other users. Thanks to its flexibility, any kind of sophisticated program can be run on Ethereum.
The developers can create and release code that runs on a distributed network rather than a centralized server is the main idea behind ethereum. This means that, theoretically, these applications cannot be disabled or censored.

What makes Ethereum valuable?
We already mentioned that Ethereum can run code on a distributed system. In other words, the programs cannot be tampered with by third parties: they are added to Ethereum's database (the blockchain) and can be programmed so that it is not possible to change the code. Furthermore, the database is visible to everyone, so users can audit the code before interacting with it.
What this means is that anyone, anywhere, can run applications that cannot be taken offline. Furthermore, as its native unit – ether – stores value, these applications can set conditions on how the value is transferred.
We call “smart contracts” the programs that compose applications. In most cases, these can be configured to operate without any human intervention.
It is understandable that this idea of ​​“programmable money” has captivated users, developers, and companies around the world.
What is the Ethereum blockchain?
The database that holds the information used by the protocol is the blockchain which is the heart of Ethereum. Ethereum's blockchain is similar to Bitcoin's, although the data it stores – and the way it stores it – is different.
It might be easier to think of the development of Ethereum blockchain as a book to which we continue to add pages. Each page is filled with transaction information and it is called a block. We need to include a special value at the top of the page when we want to add a new page; this value should allow anyone to see that the new page was added after the previous page and not just randomly inserted into the book.
Essentially, it's like a page number that references the previous one. When looking at the new page, we can say, with certainty, that it is a continuation of the previous one. For this, a hashing process is used.
We now have a mechanism to link our pages in the correct order. Any attempt to change the order or remove the pages will make it clear that our book has been tampered with.
Ethereum vs. Bitcoin – what's the difference?
Bitcoin depends on blockchain technology and financial incentives to create a global system of digital money. It introduced important innovations that allow the coordination of users around the world, without the need for central command. By having each participant run a program on their computer, Bitcoin allows users to agree on the status of a financial database in a decentralized and trustless environment.
Bitcoin is generally considered to be the first generation blockchain. It wasn't created as an extremely complex system, which is a plus when it comes to security; it is a system that is intentionally inflexible to prioritize security at its base layer. Bitcoin's smart contract language is extremely strict and doesn't accommodate applications outside of transactions very well.
Second-generation blockchains, on the other hand, are more capable. In addition to financial transactions, these platforms allow for a more complex degree of programming. Ethereum gives programmers much more freedom to experiment with their code and create what we call “Decentralized Applications” (DApps).
Ethereum was the first second-generation blockchain and remains the most prominent to this day. It has similarities to Bitcoin and can perform many of the same functions. But in reality, the two are very different and each has its advantages and disadvantages.
How does Ethereum work?
We could define Ethereum as a  state machine (literally, “state machine”). This means that, at any time, we have a  snapshot  (instantaneous information) of all account balances and smart contracts, showing their current status. Certain actions will cause the state to be updated, meaning that all “nodes” update their snapshot to publicize the change.
Smart contracts executed on Ethereum are triggered by transactions (from users or other contracts). When a user sends a transaction to a contract, all “nodes” in the network execute the contract code and record the output (output). This is done using the  Ethereum Virtual Machine (EVM), which converts smart contracts into instructions that the computer can read.
To update the state, a mining engine is used (for now). Mining is done with the “Proof of Work” algorithm, which is similar to Bitcoin. We'll go into more details about this shortly.
What is a smart contract?
A smart contract, which we'll talk about in more detail in a separate article, is just code. The code is neither smart nor a contract in the traditional sense. But we call it “smart” because it is performed under certain conditions and can be considered a contract, as it imposes agreements between the parties.
We can credit this idea to computer scientist Nick Szabo, who proposed it in the late 1990s. Vending machines were used as an example to explain the concept, claiming it could be seen as a precursor to the modern smart contract. In the case of a vending machine, there is a simple contract to be executed: we insert coins and, in exchange, the machine delivers the chosen product.
Now, an intelligent contract applies this kind of logic in a digital scenario. We can specify something simple in the code like displaying "Hello world!" when transactions are sent to this contract.
On Ethereum, the programmer would code this so that it could later be read by the EVM. It would then be published by sending it to a special address that registers the contract. From this moment on, anyone can use it – and the contract cannot be deleted unless a condition is specified by the programmer during its creation.
Now the contract has an address. To interact with it, users only need to send 2 ETH to that address. This will trigger the contract code – all computers on the network will run, verify that payment has been made, and record its output ( “Hello world!” )
This is the basic example of what ethereum can do. More sophisticated applications that link many contracts can be – and have been – created.
Who created Ethereum?
In 2008, an unknown programmer (or group of programmers) using the pseudonym Satoshi Nakamoto published the Bitcoin white paper. This completely changed the digital money landscape. A few years later, a young programmer named Vitalik Buterin devised a way to take this idea further and apply it to any type of application. The concept expanded until the emergence of Ethereum.
Ethereum was proposed by Buterin in a 2013 publication entitled  Ethereum: The Ultimate Smart Contract and Decentralized Application Platform. In his post, he described a blockchain idea “Turing-complete” – a decentralized computer that, given enough time and resources, could run any application.
Over time, the types of applications that could be deployed on a blockchain would be limited only by the developers' imaginations. The main aim of Ethereum is to find out if blockchain technology has valid uses outside of Bitcoin's intentional design limitations.
How was ether distributed?
With an initial supply of 72 million ether, Ethereum was launched in2015. More than 50 million tokens were distributed in a public sale of tokens, what is called an ICO, initials of Initial Coin Offering, where those who wanted to participate can exchange bitcoins and fiat currency to ether
What is Ethereum Classic?
And what was DAO?
Entirely new forms of open collaboration over the Internet have become possible with Ethereum. Let's consider, for example, DAOs (initial “decentralized autonomous organizations”), entities governed by computer code, similar to a computer program.
One of the first and most ambitious attempts at the organization of this type was called “The DAO”. It would have been made up of complex smart contracts, run on top of Ethereum, functioning as an autonomous risk fund. DAO tokens were distributed at an ICO and gave a shareholding as well as voting rights to token holders.
Shortly after its release, however, malicious agents exploited a DAO vulnerability and stole nearly a third of its funds. Note that at that time 14% of the entire ether supply was locked in DAO. This was a devastating event for the still inexperienced Ethereum network.
After some discussions, the chain suffered a "hard fork", separating into two new chains. In one, the malicious transactions were effectively “rolled back” to restore the funds – this chain is now known as the Ethereum blockchain. The original chain, where transactions were not rolled back and immutability was maintained, is now known as  Ethereum Classic.
The event served as a stark lesson in the risks of this technology and showed how trusting large amounts of autonomous code can be dangerous. It was also an interesting example of how difficult collective decision-making in an open environment can be.
However, it was by neglecting its security vulnerabilities that DAO perfectly illustrated the potential of smart contracts by enabling large-scale “trustless” collaboration on the Internet.