Understanding Ethereum: From a Payment System to a Global Supercomputer

Understanding Ethereum: From a Payment System to a Global SupercomputerEthereum, a blockchain project born in 2013, not only created the world's second-largest cryptocurrency, Ether (ETH), but also expanded the scope of blockchain technology beyond payments to a wider range of applications. This article will take you on a journey through Ethereum's past, present, and future, exploring how it transformed from a simple payment system to a global supercomputer and revealing its profound implications for the crypto economy

Understanding Ethereum: From a Payment System to a Global Supercomputer

Ethereum, a blockchain project born in 2013, not only created the world's second-largest cryptocurrency, Ether (ETH), but also expanded the scope of blockchain technology beyond payments to a wider range of applications. This article will take you on a journey through Ethereum's past, present, and future, exploring how it transformed from a simple payment system to a global supercomputer and revealing its profound implications for the crypto economy.

Ethereum's Origin: A Universal Blockchain

Ethereum's creation stems from Vitalik Buterin's white paper published in 2013, which brought unprecedented novelty to blockchain technology. Ethereum aimed to create a universal blockchain platform, rather than simply a payment system like Bitcoin. Its key innovation lies in the introduction of smart contracts, which are pieces of code that run on the blockchain, enabling automated transactions and protocol execution without the need for third-party intervention.

Ethereum's Core: Smart Contracts and Solidity Language

Ethereum's versatility is attributed to smart contracts, which empower developers to build decentralized applications (DApps). These DApps inherit the inherent advantages of blockchain technology: tamper-proof, transparent, reliable, and secure.

Solidity is Ethereum's primary programming language, created by Dr. Gavin Wood. It is an object-oriented high-level programming language, influenced by Python and JavaScript, aiming to lower the entry barrier for developers. Solidity is "Turing-complete," meaning it possesses all the capabilities to develop complex use cases, unlike Bitcoin's programming language, Scrypt.

Challenges Faced by Ethereum: Scalability, Security, and Public Awareness

Despite its vast application potential, Ethereum faces a number of challenges.

Scalability is currently Ethereum's biggest hurdle. As a "world computer," Ethereum can only handle approximately 15 transactions per second, while traditional payment systems like Visa can process 45,000 transactions per second. This limits Ethereum's development in large-scale applications. For example, the CryptoKitties project in 2017, due to its immense popularity, caused network congestion and significantly delayed transaction processing.

Security issues have also been a persistent pain point for Ethereum. Poor development practices in some projects have led to hacking attacks and financial losses, negatively impacting the Ethereum ecosystem.

Furthermore, lack of public awareness and poor DApp user experience are significant factors hindering Ethereum's large-scale adoption.

Ethereum's Current State: A Steadily Growing Ecosystem

Despite the challenges, the Ethereum ecosystem has been steadily growing in recent years.

ETH has become the second-largest digital asset by market capitalization, demonstrating strong community support and widespread adoption for Ethereum.

Solidity has emerged as the most popular open blockchain programming language, boasting a large developer community, which means more excellent projects will be born on Ethereum.

While the first cryptocurrency fundraising boom in 2017 brought in a surge of projects, the reality is that only a handful have survived.

DApp development has also made progress, particularly in the gaming, gambling, and financial sectors, with numerous active projects and strong user bases.

Ethereum's Development Stages: From Frontier to Serenity

Ethereum's development plan is divided into four stages: Frontier, Homestead, Metropolis, and Serenity. Each stage introduces new features, fixes issues, and updates the version through "hard forks."

1. Frontier Stage (Block0 - Block200,000): Ethereum's initial development stage, from July 30, 2015, to March 2016.

2. Homestead Stage (Block200,000 - Block1,150,000): Ethereum's second stage, starting in March 2016.

3. Metropolis Stage (Block1,150,000 - Block9,056,000): Ethereum's third stage, starting in October 2017, encompassing two hard forks, Byzantium and Constantinople.

4. Serenity Stage (Block9,056,000 - Present): Ethereum's latest stage, aiming to introduce Ethereum 2.0, complete the full upgrade to the PoS consensus mechanism, and launch the new Ethereum Virtual Machine eWASM.

Ethereum 2.0: Towards a More Scalable, Secure, and Powerful Blockchain

The term "Ethereum 2.0" encompasses all the updates in the Serenity stage, aiming to address Ethereum's scalability, security, and blockchain state issues, thereby enhancing its performance and efficiency.

Key design goals of Ethereum 2.0 include:

• System Resilience: Maintaining normal operation even in the event of large-scale node outages or network splits.

• Security: Maximizing the secure participation of validator nodes using cryptography and design mechanisms.

• Simplicity: Reducing system complexity to improve efficiency as much as possible.

• Persistence: Choosing quantum-safe components to ensure the system's long-term security.

• Decentralization: Allowing more low-end devices to participate in the network.

Four Stages of Ethereum 2.0:

• Phase 0: Beacon Chain: A new blockchain independent of the Ethereum blockchain, implementing the PoS consensus mechanism and running in parallel with the existing PoW Ethereum blockchain.

• Phase 1: Shard Chains: Sharding technology divides the Ethereum network into multiple shards, enabling parallel transactions, improving transaction speed and scalability.

• Phase 2: New Ethereum Virtual Machine eWASM: A new virtual machine capable of parallel transaction processing and supporting more advanced functionalities, such as smart contracts, accounts, and state.

• Phase 3: Continued Improvement: Includes all future changes, fixes, and improvements aimed at continuously refining Ethereum 2.0.

Implications of Ethereum 2.0 for the Crypto Economy

The success of Ethereum 2.0 will bring about significant changes to the crypto economy.

• It will create a fully scalable universal blockchain, closer to the vision of a "global supercomputer."

• It will attract more developers and investors, driving the thriving development of the Ethereum ecosystem.

• It will prove that the "blockchain dream" is achievable, providing a blueprint for the success of other blockchain projects.

Conclusion: A Promising Future for Ethereum

The development of Ethereum 2.0 is a long process, but it represents Ethereum's determination to move towards a more scalable, secure, and powerful direction, heralding endless possibilities for the future of the crypto economy.

Please note: This article is for informational purposes only and does not constitute investment advice. Investing involves risk, and you should invest cautiously.