October 1, 2019 To September 30, 2020
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The excitement around cryptocurrency, and especially Ethereum ICOs has been intense. In the past year ICOs have raised more than $1.6 billion according to Bloomberg, and most of that money was raised with Ethereum ICOs. The incredible tide of ICO wealth has caused many to declare old venture capital techniques as a thing of the past. But, savvy investors, entrepreneurs and crypto enthusiasts are already banking on the next superstar, Ethereum (ETH), an open source software platform based on blockchain technology. This explosive blockchain is considered to be widely responsible for the past year’s ICO explosion. With simplicity and transparency built-in, it’s never been easier to invest in an Ethereum ICO.
Ethereum is relatively new (just over 4 years old), but success stories are racking up on account of how easy it is to build applications on top of the Ethereum blockchain. Its simplicity has allowed many new companies to raise millions of dollars with just a concept and a white paper. It could be said that Ethereum has almost single-handedly created an ability to circumvent not only traditional funding methods, but has caused the decline of what had been the backbone of tech and startup funding, venture capitalist money. Ethereum ICOs is the latest crowdsource concept that has made it so easy to create new coins, tokens and raise new capital.
As the price of Ether continues to rise, it’s easy to see why Ethereum is the preferred platform. Take a look at the numbers: More than half of the top 100 cryptocurrencies are Ethereum-based tokens. And, according to CoinMarketCap, the top four Ethereum-based assets — Golem, Augur, Basic Attention Tokens and Gnosis — make up more than a $1 billion in market value.
In 2013, a 19-year old Russian software developer named Vitalik Buterin created the Ethereum network. After co-founding Bitcoin Magazine,he set out to create a cryptocurrency that offered users more functionality. The crowdsale was a major success and the Ethereum network went live on July 30, 2015. Since then, gains have been outrageous, with some of the world’s largest organizations adopting—Toyota, Microsoft and Intel just to name a few.
As the number two cryptocurrency and the top smart contract development platform, Ethereum produces a lot of buzz. Not all of it is accurate though. You have to read with a grain of salt and weigh the source and its context, otherwise, myths quickly develop. This stems from the fact that Ethereum news gets read, even fake news. That translates to web hits and ad displays for the publishers. So, here’s the latest myths and facts about Ethereum.
Myth: Ethereum co-founder Vitalik Buterin left Ethereum. Poor Buterin can’t make a quick tweet without it getting turned into a news report. This bomb could have affected a number of upcoming Ethereum ICO launches but his quick response to the news stories stemmed the problem.
What happened was that in May 2018, Ethereum’s co-founder posted a screenshot to his Twitter of a Google headhunter querying him about working for the firm. Buterin posted a poll to learn if his followers thought he should consider Google’s offer. The majority of respondents voted no. Buterin deleted the original tweet and life went on in the Ethereum community.
Until October that is when an account using the handle Raz asked:
Buterin’s two-part reply became fodder for new articles on his eminent departure from Ethereum.
Almost immediately the flood of well wish comments on Buterin’s next project began, including this from a Twitter account known as Serpent:
The following day Buterin saved the Ethereum ICO calendar by tweeting he had been misunderstood and had no plans to leave the Ethereum Foundation in the near future. He tweeted:
While the fake news did put Ethereum in the spotlight for a day or two, it did so negatively. Much of Ethereum community shuddered at the thought of the coin-founder leaving. Any news regarding a leadership shakeup bodes poorly for new products or services in the business world. Buterin’s quick response helped ensure no damage to the always full Ethereum ICO list.
Fact: Ethereum experiences some scalability issues. This fact could eventually affect the Ethereum ICO list. The Ethereum platform cannot process as many transactions per second as its nearest competitors, such as NEO or Stellar. It charges much higher transaction fees than other platforms. It requires specialized programming knowledge because it only uses Solidity. Let’s take these one at a time and examine how they impact scale.
Ethereum processes transactions at a maximum of 15 per second, while one of its competitors, NEO can process up to 10,000 transactions per second. This vastly reduces the amount of business firms can conduct on Ethereum in a day.
The speed of the transactions on Ethereum runs much slower than other platforms. It requires 3.5 minutes to process a single transaction. That’s way slower than competitor Stellar’s five seconds to process a single transaction. This slows down the business of any business on the Ethereum platform and limits their scale.
It charges much higher transaction fees than its competitors. You pay $1 to $2 per transaction. While this doesn’t impact high-value transactions of hundreds of thousands of dollars, it does when a firm conducts a large volume of small transactions. For comparison, Stellar charges no gas and charges a transaction fee of approximately .00001 XLM.
Fact: Ethereum has partnerships or support from heavy hitter, mainstream businesses like Microsoft. The Enterprise Ethereum Alliance (EEA) amasses established corporations together that have expressed interest in partnering with or have partnered with Ethereum. The big three currently involved include JP Morgan, Microsoft and Thomson Reuters. The EEA and its participants partner to advance the platform’s network to the point they can incorporate it into firms. These partners work with the platform to improve scalability, such as solving Parity’s issues processing large volumes of concurrent transactions.
While it might seem as if its scale issues would impact the Ethereum ICO list, it continues to grow. Businesses continue to choose the platform and its ether-based ERC-20 coins as the basis for their budding smart contracts. Check this site’s Ethereum ICO calendar to find an upcoming Ethereum ICO that interests you.
In order to fully appreciate the power of Ethereum, it’s necessary to really understand how it is different than Bitcoin. Bitcoins were not actually meant to establish the cryptocurrency industry that it did. It was originally simply a currency system, a means to exchange value. It was simple enough, through a program that was inherently a ledger of account balances.
As it is Bitcoin doesn’t have the smart contract ability to complete ICO transactions or perform other programmed actions. It is not a Turing-complete scripting system. The test of a Turing-complete system is that it can repeat instructions, or jump them if the conditions allowing it are met. Also, it must have the capability of making variables out of information. Generally speaking, most programming languages meet these requirements and are Turing-complete, but not the Bitcoin blockchain.
The Bitcoin blockchain does not support loops in programming. It was set up that way as a security measure because loops could allow for a DOS attack (denial of service), because a hacker could tell the miners to continue implementing loops.
Crowdsales require the calculation of the total after every new investment by individual investors, of which there may be hundreds or even thousands, and the closing of the offer once the pre-determined conditions are achieved. The recalculations must be performed after token distribution, and all of it is based on an algorithm. These features so necessary to ICOs demand Turing completeness.
While Bitcoin did a great job of showcasing how a new technology could change the face of finance and investment, its block time is also far too long to include transactions from thousands of token. That’s a problem for a fast-paced environment for new Ethereum ICOs and current Ethereum tokens where hundreds if not thousands of transactions occur within seconds. It takes up to 10 minutes per block on the Bitcoin blockchain, which means it can take up to an hour for verification of transactions. That would cause big delays in an ICO when new contributions could take an hour to be verified before the next step. Ethereum’s efficiency, in this regard, has outshone many other blockchain efforts.
One of the defining attributes of Ethereum is the ERC-20, a standardized template for creating new tokens on the Ethereum blockchain. The ERC-20 Token Standard is a set of functions or guidelines related to issuing, distributing and controlling assets. A standardized template means that all tokens built on the Ethereum blockchain can interchange easily.
Before ERC-20, interchange between cryptocurrency tokens was complicated. Differences in how balances were verified and how transfers were made left most tokens incompatible. Interchange was complicated at best, and only possible after working tirelessly to get two different sets of code to communicate.
With a common set of rules and functions defined, all ERC-20 compliant tokens can be exchanged with other ERC-20 tokens easily.
The ERC-protocol was formalized in September of 2017. Today, all new tokens on the Ethereum blockchain meet the standard and have immediate interoperability with all other tokens on the Ethereum blockchain.
This flexibility is possible due to a very complex structure of data. Known as the Merkel Patricia Tree, it uses a diagram of programing states that take into consideration the fact that there will be large scale changes, and allow for fast modification of the calculations, and almost immediate verification of all combined aspects involved in the execution of an ICO. This programming vastly surpasses a simple transaction ledger. That’s the big difference between the Ethereum network and other blockchain networks is its ability to power smart contracts. Smart contracts are basically programs that handle the transfer of digital currencies between parties.
There is another aspect of Ethereum that makes it such a great ICO platform. It also uses something that has been coined “gas” payments to prompt the system. Gas allows for incentives that make it attractive for people to use their own CPUs to power the program on the Ethereum blockchain. If there is not enough gas to complete the transaction or action, the program is aborted, and that keeps the loops from continuing in a DOS attack since each execution will end up being terminated. That makes ICOs on Ethereum extremely secure. A hacker can’t deny service that will kill your crowdsale.
People looking to enter into agreements on blockchain networks often don’t know one another, and trust can be a major issue. The smart contract allows agreements on the Ethereum network to be created with confidence. The network executes every contract in a way that provides the most security for all involved. By contrast, enter into an agreement on a blockchain network, and your contract is executed regardless of how it benefits either party.
Ethereum protocol has increased creation times that do not compromise blockchain security due to its Greedy Heaviest Observed Subtree (GHOST) protocol. This protocol gives Ethereum its power to create blocks faster, and that means transactions are verified and added to the blockchain quickly. That same protocol gives added power to the time it takes to distribute the resulting tokens at the end of the sale without compromising the integrity and security of the system.
ICOs on the Ethereum platform typically issue ERC-20 compatible tokens via smart contracts. As of January 2018, there were more than 21,000 ERC-20 token contracts. With a level of predictability and functionality other cryptocurrencies don’t have, Ethereum lets developers focus more on designing a sophisticated user experience and on ensuring security.
Like bitcoin, the Ethereum network is based on blockchain technology that’s open and decentralized. But, smart contracts also rely on Distributed Autonomous Organization (or DAO), an open-source entity that runs on rules encoded into smart contracts on the blockchain.
The DAO runs autonomously— all functions of the contract are performed independently—without the need for human intervention. It doesn’t belong to any organization or country and it has no board of directors and no chief executive officer. Since the network doesn’t need third-party supervision, you save money.
The United States Securities and Exchange Commission has been in the news recently, causing big ripples in the ICO arena by issuing a report that threatened ICOs with securities classification. This new classification would create new levels of compliance requirements and tightened regulations for any new tokens created or sold in the U.S. This is also happening in the European Union, and China has completely banned ICOs. Many current ICOs are based in the ICO havens of Switzerland and Singapore. Even these locations are leaning toward compliance, requiring KYC and AML and creators of tokens entering the market will have to expect registration as a part of compliance as well as insisting on KYC form completion and identity checks from their investors.
The decentralized nature of public blockchains like Bitcoin and Ethereum has made global wealth transfer practically effortless. When you’re ready to find the next Ethereum ICO, browse our list of upcoming Ethereum ICOs today.
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