What is the role of Ether points (Ether Ether)?

What is the role of Ether points? What is its role in the world of cryptocurrency? It is a network composed of various types of tokens. These tokens can be used to pay transaction fees, exchange goods and services, and serve as a medium of exchange (like Bitcoin), etc.

Generally, “ETH” is a digital asset or “ERC-20” that is pegged to fiat currency. However, it is difficult to trade in decentralized finance due to privacy issues. For example, by using applications running on the Ethereum blockchain, users can fund their accounts by sending and receiving Ether. This method is called a smart contract, which means that when users want to link their wallet to a smart contract, they can use this code to create a smart contract and transfer it to a third-party application.

To buy Ether coins from an exchange or add them to their own addresses, users need to submit an application to the exchange. To address this situation, the Ether team decided to establish a stablecoin based on the Ethereum protocol. The goal of this project is to make Ethereum one of the most popular stablecoins in the world. Although stablecoins have interoperability and security, there is currently no way to achieve complete decentralization. In addition, most stablecoins rely on control mechanisms of third-party institutions. So we believe that Ethereum is not the only place where such functions can be facilitated. Why build a stablecoin pegged to the US dollar? Because people want to store their funds in a safe harbor and cannot use it as a daily store of value, which means you cannot access the Ether stored in your account in any way.

For those who do not want to have their own funds, Ether is not suitable as collateral. But one thing is clear: with the constantly evolving DeFi market, Ether will also increase liquidity. In addition, if a protocol on a platform fails to generate low yields and lacks governance capabilities, Ether will become more elastic.

In addition to price, Ether also has other attributes:

1. Non-fungibility. The price of Ether coins is generated by off-chain calculations, not from external sources, so it must meet certain conditions to take effect.

2. Scarcity. Each product has unique characteristics, such as its underlying assets being unique or one-of-a-kind and having some special components. For example, NFT is a good example. You can collect some artworks in one place and create some strange things in it, and then return the ownership to the holder.

3. Transparency. Each NFT is a complete system, and each NFT is publicly transparent. It is only issued after KYC, and all data and information can be recorded throughout the process, including the hash algorithm of the underlying public key, block numbers, and corresponding verifications, to ensure that they are not subject to hacker attacks.

4. Immutability. Ether coins, unlike other stablecoins, cannot be converted into legal tender or digital gold.

Ether Ether

Editor’s Note: This article is from BlockBeats (ID: blockbeats), authorized to be reproduced by Odaily Planet Daily.

Ethereum 2.0 beacon chain has been launched, and in the past two weeks, the transaction speed of Ether has increased by more than three times. Currently, Ether’s gas fees have also reached a historical high level, exceeding 150 Gwei. We are now in a new stage where the transition between Ethereum and the ERC20 protocol is ongoing, making ETH a more easily exchangeable and usable asset. Although the price of Ethereum has recently fallen, the transaction speed of Ethereum has been increasing. Bitcoin and Ethereum have experienced a big market boom, and Bitcoin and Ethereum have reached new highs, rising from around $400 at the beginning of the year to over $4,000 now, with an increase of more than 102%. In addition, Ethereum Classic (ETC) continues to rise, with a daily trading volume of up to $200 million, most of which is in Ether, so they are also worth paying attention to.

However, as the price of Bitcoin continues to soar and forks begin to appear, the transfer costs on the Bitcoin network have also decreased, but this situation seems not so good for miners. The gas fees for transactions on Ethereum are one of the most common measures, which are low and relatively scarce, so there is a greater demand for gas fees from users, and Ethereum Classic is a good example that provides a solution for such demand. The gas usage efficiency on Ethereum is high, and the confirmation time for each transfer is less than 15 seconds, which makes people hope that the Ethereum blockchain can be part of the decentralized application platform by running smart contracts.

To solve this problem, the Ethereum community decided to adopt sharding technology. This is the first important use case of sharding technology. Ethereum will be able to carry all the other features of these scalability tools. However, this requires more developers to complete, as doing so will greatly reduce the expensive operations in the blockchain.

Although layering may introduce new features or upgrades, it may not change in some cases, and it may also change. Sharding technology means that when a transaction is sent to a shard, the total balance of each participant in the system is divided into decimal places and then split into separate small parts, resulting in transaction delays. This means that if transactions are not immediate or if there is no transaction processing capacity, the entire network will become congested. Ethereum Classic doubles the throughput of transactions through sharding technology. Ethereum Classic’s sharding technology can efficiently process transactions. Since this protocol allows communication between different nodes, it is more secure and simple than existing blockchains.

However, the introduction of sharding technology does increase the block space, which doubles the network capacity and improves the block production speed, thus facilitating more transactions.