best blockchain games

Before we get into this list, don’t get too excited about playing games as ambitious as Fortnite or Skyrim or Call of Duty. Blockchain gaming, while exciting, is still in its infancy, often based around collectibles (you’ve all heard of Cryptokitties, right?) Our aim is to begin tracking the world of blockchain gaming as it develops and see what new ideas are out there. Delton Rhodes explores. 

What Are Blockchain Games?

As the name suggests, blockchain games are any games that use blockchain technology to power some or all of the gameplay. 

It might be as simple as storing gaming items on a blockchain,  often Ethereum. Or as vast as building an entire blockchain gaming universe (see Decentraland and CryptoSpaceX below). 

Why Blockchain Games vs. Traditional Games?

Blockchain games are considered more transparent and secure than traditional games. In traditional games, everything is stored on the gaming company’s servers. 

With blockchain games, your items and progress can be stored safely and transparently on a public blockchain. 

For the first time ever, it also means you can own 100% unique digital items. Before blockchain, every digital item (like a weapon or trading card) was just a copy of something else. 

Now you can truly own something digital in a game – which opens up tons of new gaming and collectible options.

Curious? Let’s dive into some of the best early blockchain games out there.

Top Blockchain Games

The following are some of the best blockchain games out there (or in development). Some of the games in this list can’t be considered true blockchain games in the sense that they don’t yet rely solely upon blockchain technology. However, many in this list do utilize blockchain for every aspect of gameplay.

Age of Rust

Age of Rust blockchain game

Age of Rust is a dark sci-fi adventure game set in the vast expanse of the universe in the year 4424. In the game, you can explore abandoned space stations, mysterious caverns, and ruins on far away worlds. You can unlock puzzles and secrets throughout.

One of Age of Rust’s most innovative features is its blockchain-based peer-to-peer rental market that allows anyone to rent in-game assets for specified periods of time. 

The anticipated launch date for Age of Rust is late 2019, meaning it will have undergone two years of development. 

SpacePirate Games, the creators of this game, have already released a text-adventure version of Age of Rust which features Rustbits as the in-game currency. The beta version of Age of Rust offers the equivalent of four BTC in prizes. Eventually, Rustbits will be converted to ERC-1155 tokens using Enjin Coin’s smart contract to enable this functionality.

How to play: On PC when it’s released next year

No Man’s Sky

No Man's Sky crypto gaming

Okay, so this isn’t technically a blockchain game, but it does have a unique cryptocurrency twist…

No Man’s Sky contains an enormous universe for gamers. This game includes 18 quintillion randomly-generated planets for players to explore. Since the game launched in 2016, the creators have continuously added new features like base building, better ship customization, and improved graphics.

In 2018, No Man’s Sky also added multiplayer functionality. The game is available on PC, PS4, and Xbox One.

Although this is not technically a blockchain game, it does have in-game cryptocurrency rewards. What’s most interesting, though, is that the game’s creators didn’t add this. Instead, two avid fans (Jon Creasy and his brother) hid two clues in separate locations within the game.

The first player who can find both will have the ability to access the secret phrase (seed) needed to unlock a wallet containing around $30 worth of BTC.

How to play: purchase for PS4, XBox One, and PC

Gods Unchained

Gods Unchained

Gods Unchained, mentioned in our recent article about dapps, continues to gain attention from gamers.  According to the project website, Gods Unchained is the first-ever blockchain esport. This game has a multiplayer mode where users can battle each other as well as trade, sell, and store gaming cards. 

According to the future roadmap, there will be a Gods Unchained world championship sometime in the near future. As of November 13, 2018, around $370,000 has been raised for this event. 

How to play: online (requires Meta Mask to access and ether to make purchases)

CryptoSpaceX

CryptoSpaceX blockchain game

CryptoSpaceX is a game where you can explore the universe. The game is built on the blockchain, and all in-game elements are assigned digital ownership to the players.

Users can engage in detailed and strategic planet vs. planet battles to loot stardust. With this game, you can also build new starships as well as upgrade and customize your star fleet.

Players can also compete in various challenges and tournaments in a special arena and travel to Vegastar (built in the Fabula galaxy) to win special prizes.

Episode I of the game launched in June 2018. Episode II is expected to be ready to launch by December 2018. According to the project website, the game will eventually include support for mobile gaming functionality.

CryptoSpaceX is unique due to its extreme scarcity of tokens. While similar games might have millions or even billions and claim to be scarce, CryptoSpaceX will only ever have 4000 SpaceX tokens. 3,700 were available in the presale which ended in Ju

ne 2018; however, only 773 were sold then. To avoid centralization of the token supply, each user was limited to a maximum of 10 SpaceX tokens.

How to play: As part of Episode I, purchase starships online (requires MetaMask)

CubeGo

CubeGo

CubeGo is a game in which you can use 3D building blocks to build your very own personalized 3D models called Cubegon. 

The mission of this game is to enable players to ignite their creativity and imagination by building 3D characters. According to the project website, “They will be the soldiers standing by your side in the face of all adversary and earning you significant rewards.” 

With CubeGo, as with most blockchain games, you have full ownership of your creations. Similar to collectible games, each Cubegon (3D model) is unique. The game even provides blockchain-backed copyright ownership for creators. 

CubeGo players can use arenas as the playground for demonstrating the power of their Cubegons through 3D battle experiences. 

The token presale for CubeGo starts on November 24, 2018. In December 2018, CubeGo will launch Cubegon Building & Marketplace. For 2019, there are several anticipated milestones in the future roadmap, including arena opening and ranked battles. This project has established several big partnerships. Some include Kyber Network, Zilliqa, and Coinbase Wallet.

How to play: register for presale

EOS Knights

EOS Knights blockchain mobile game

EOS Knights is the first mobile game (available on iOS and Android) that runs on the EOS blockchain. This game allows users to complete tasks like collecting materials, crafting items, adopting pets, and trading items using EOS. 

Even though the game only launched in September 2018, the team behind it has been busy making a variety of major updates. 

For example, in November 2018, EOS Knights is adding much-improved functionalities like multi-play boss content (four players), additional boss content, six-level Items (Destructive), and set items (new category). 

How to play: download on the Apple App Store or Google Play

Axie Infinity

Axie Infinity

Axie Infinity draws its inspiration from Pokémon and Tamagotchi games. It is a decentralized game that runs on the Ethereum blockchain. Axie Infinity allows you to breed, raise, and battle fantasy creatures known as Axies. 

Similar to other blockchain games, Axie Infinity utilizes scarcity as a key component. The four levels of rarity are Common, Rare, Ultra Rare, and Legendary.

There are more than 500 Axie body parts available, with additional ones being revealed later. Axies’ body and parts are grouped into classes including Beast, Plant, Bug, Bird, Reptile and Aquatic. 

This means the combinations are limitless. Axie Infinity also features a 3v3 battle mode. As of November 13, 2018, there have been close to 11,000 Axies created and over 93,000 battles.

How to play: online (requires Meta Mask)

Decentraland

Decentraland

Decentraland is not a game as such, more a platform for lots of future virtual reality (VR) blockchain games.

Decentraland provides a VR platform for creating, experiencing, and monetizing content and applications. Unlike most projects that are making blockchain VR games a more distant goal, creating a VR world is Decentraland’s main focus. According to the project website, users can go to a casino, watch live music, attend a workshop, shop with friends, start a business, test drive a car, and visit an underwater resort within the game.

Decentraland even provides an SDK (software developer’s kit) that allows anyone to start developing games and applications for the platform.

The Decentraland protocol features three layers: consensus layer, land content layer, and real-time layer. Designers can use SketchUp and/or Blender to create models before importing them to Decentraland. This project has been around since 2015 and uses MANA as its in-game currency.

How to play: start developing games and building virtual worlds online

 

Beyond the Void

Beyond the void blockchain game

Beyond the Void is a unique combination of strategy, action, and one-on-one competitions. This game brings the multiplayer online battle arena (MOBA) genre with its real-time strategy (RTS) origins back together in outer space.

Beyond the Void uses Nexium (NXC) as its in-game currency. Within the Nexium ecosystem, you can find games developed and/or published by B2Expand (creators of Beyond the Void), a decentralized shop for all in-game items, and Ethereum tools for developers.

B2Expand is actively working to expand collaboration within the blockchain gaming space. One cool fact is that, if you own a Crystalibur ship in Beyond the Void, you also own an Amaranthe card in the Spells of Genesis.

B2Expand also organized the first annual Blockchain Game Summit in Lyon in France in September 2018.

How to play: play on Steam

EtherQuest

Etherquest blockchain game

EtherQuest is a fantasy role-playing game powered by the blockchain. Mighty warriors from multiple worlds clash in a struggle for supremacy. The warriors range in rarity, from “common” to “legendary.” Each rarity type comes with a unique combination of stats and bonuses. 

Game activities include summoning, arena, and tournament. To play this game, you’ll need to have a MetaMask wallet. Luckily, for new players who want to get started learning this game, EtherQuest provides a comprehensive gameplay guide.

How to play: online (requires Meta Mask)

Spells of Genesis

spell_of_genesis blockchain game

Spells of Genesis is a mixture of various game types. It is a trading card game (TCG) that involves deck collection and strategy as well as arcade-style gaming elements. With this game, you can collect, trade, and combine orbs to build the card decks.

Then, you can put your orbs to the test against various opponents while exploring the fantasy realm of Askian.

BitCrystals (BCY) are the digital assets that serve as the game-fuel and the premium in-game currency of Spells of Genesis. 

Compared to other blockchain games, this currency is relatively well-established. The BCY crowdfunding campaign took place back in summer 2015. Spell of Genesis cards are digital assets based on Counterparty, which is a platform that allows developers to create custom tokens for the Bitcoin blockchain.

How to play: on PC, download iOS app, download Android app

FirstBlood

FirstBlood blockchain game

Not a game as such, but FirstBlood is aiming to change the future of esports betting. Most notably, FirstBlood provides a platform for players who want to automate their tournament play and payout distribution. In fact, this blockchain-based platform even automates registration, bracket management, and scorekeeping via technologies like smart contracts and oracles. 

Why is this a significant step forward for esports? Essentially, this platform reduces (or even eliminates) the groundwork involved with launching an esports tournament. This means that FirstBlood can support small tournaments with low buy-ins on any given day as well as large-scale, high-profile competitions. The best thing is that this can all be organized via a trustless environment.

DreamTeam

DreamTeam is another popular option for esports. According to ICObench, “DreamTeam will offer esports player and teams recruitment and management tools for the most popular PC titles CS:GO, LoL, DOTA 2, PUBG, Overwatch and more. Amateurs and professionals can create accounts for players with rankings taken directly from their games.” 

It’s also important to note that every transaction on the platform will eventually require the use of DreamTeam tokens. 

As of November 2018, the DreamTeam platform still hasn’t launched key features like its management tool or the ability for players to earn funds through gameplay. 

Nevertheless, DreamTeam is aiming to use its native token for smart contracts that can facilitate tournament prize payouts as well as paid platform features (i.e. premium accounts). The native token could also potentially be used for other things like buying games, software, hardware and more via the DreamTeam platform.

Conclusion

It might take some time before large-scale applications like real-time video can be powered by blockchain. Therefore, to move popular multiplayer video games like Fortnite into a blockchain-based game, some serious technical advancements would need to be made. 

However, there are already a few companies trying to do just this. For example, MagnaChain is a separate blockchain being developed specifically for video games. The company behind the project claims its network is capable of handling up to 100,000 transactions per second. Earlier in 2018, its testnet handled over 13,000 transactions per second. 

It will be interesting to see how the future of blockchain gaming plays out. Will the user adoption of blockchain games ever surpass that of traditional games? This might be too early to tell. As blockchain scalability increases, we could very well see the emergence these and other innovative blockchain games that offer improved user experiences over traditional games.

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cryptocurrency communities

If it weren’t for strong cryptocurrency communities, we wouldn’t be where we are today.

There would be no debates on whether Bitcoin is better than Bitcoin Cash. Telegram wouldn’t have raised  $1.7 billion in its token sale, EOS probably still wouldn’t have launched its mainnet, and, well, it’s hard to tell for sure if crypto would even exist as we know it.

Block Explorer identified the strongest crypto communities and figured out why they were so important for the blockchain universe.  

The Strongest Crypto Community #1:  Bitcoin 

Bitcoin began as a small community of cryptography geeks and cypherpunks. They shared ideas on obscure forums and mailing lists years before it gained mainstream attention.

Satoshi Nakamoto was the one who created and envisioned bitcoin, but it gained traction because a dedicated community worked together on the development. (Note: you can read the very first community thread about bitcoin here)

In the ten years since, the bitcoin community has grown across the world. Bitcoin has suffered some huge price drops and dips in popularity, but every time, it comes back stronger. After bitcoin reached almost $1,200 in December 2013, it went down to $400 in just three months and did not grow back till the beginning of 2017.

But even in spite of all the roller coasters and bad publicity, bitcoin is still alive and thriving due to the large community of believers around. At the moment of writing, the Bitcoin Core client is the product of almost 19,000 unique code contributions from almost 600 individual developers. 

Its public Github repository also tracks so-called “forks” of the code, the copies that can be modified for any specific purpose. To this date, the developers have forked Bitcoin Core reference client over 21,000 times. That’s a massive amount of people involved. 

And let’s not forget the number of bitcoin wallets created so far – more than 30 million people have registered Blockchain wallets, and more than 20 million created Coinbase accounts. 

No, bitcoin most likely won’t be disappearing any time soon.

The Strongest Crypto Community #2:  Ethereum 

purple ethereum logo on blue background

If it wasn’t for the strong community, we can’t even imagine where Ethereum would be right now. 

Let’s recap some disasters. Remember 2016 and the imperfections of the DAO (Decentralized Autonomous Organization)? At that time more than $50 million worth of ether was stolen from the infamous DAO and transferred into its smaller version called “child DAO.”

DAO explained: A DAO is an organization or business without a central authority. Instead, it makes decisions using digital “smart contracts” and voting mechanisms on the Ethereum blockchain.

Forking the blockchain was the only way to fix it. That meant a change to Ethereum’s code that split the currency into two versions. Users had to choose between by either updating their software or not. 

It was risky. However, the fork was successful with 85% of users moving over to the new version.

Want to know more about this hack? Read our beginner’s guide to Ethereum.

What is Ethereum

 

 

 

 

 

 

 

 

In 2017, another hack breached a vulnerable Ethereum wallet, but the community quickly stepped in to re-route the funds and prevent a further theft. And, well, Ethereum is still around. 

The Strongest Crypto Community #3: EOS  

EOS was developed by Block.one, as a faster, cheaper alternative to Ethereum. EOS begins with one of the most respected minds in the industry, Dan Larimer, who also created Bitshares and co-founded Steemit. 

He has been described as a visionary and was very articulate about the need to eliminate fees in decentralized applications long before EOS appeared.

On top of the fees elimination, EOS intends to help fix the scaling problem in Ethereum. EOS implemented an alternative network that could, one day, manage millions of transactions per second and introduced a developer-friendly sandbox for creating new, fast decentralized applications (dapps). 

Also, it has a great appeal for new blockchain entrepreneurs since it suggests a simple alternative for fundraising – switching from initial coin offering (ICO) to airdrops and airgrabs.

So, it’s not surprising that in a year-long ICO, EOS raised $4 billion for its blockchain and smart contracts platform.

However, even though the project is in its early stages, it has already experienced significant shakedowns. At one point hackers managed to gain control of Block.one’s Zendesk account and used it to send persuasive phishing emails. 

Hackers could have got away with millions of dollars if it weren’t for the community to spread the word about the incident. 

Less than a week away from the EOS mainnet launch, an internet security firm from China, called Qihoo360, reported that it found several vulnerabilities in the EOS system. The holes would allow hackers to gain remote control of EOS nodes and even access private keys. 

Then, the much anticipated mainnet launch event was a disaster by itself. It was scheduled on the 2nd of June, 2018. But almost a week later the blockchain was not yet live because it required EOS token holders to vote. 

And the voting process itself was very confusing and not very friendly to a non-techy audience. But that case only demonstrated the power of the project’s community. At the time, dozens of brilliant and helpful members of the EOS ecosystem developed a bunch of handy tools for voting along with the sets of instructions and guidelines. That promptly enabled the ability of token holders to vote for the mainnet launch and the network was successfully started on the 14th of June, 2018.

The Strongest Crypto Community #4: Monero

Monero logo

Monero’s community is united around a core group of principals: privacy, security, and decentralization.

Recently, the Monero community rallied together to fund a deep audit of its new bullet-proofs technology. The audit ultimately turned up a vulnerability that could have lead to a 51% attack.

It would have been easy to ignore a security audit, but the Monero community felt strongly enough about security to fund it themselves.

Further, the Monero community actively fights against the use of mass-market mining tools (ASICs) to protect its decentralized nature. A community that puts its core principals ahead of economic gain is one worth keeping an eye on.

What’s your favorite story about the strongest crypto communities? Go ahead and share it in the comment section below.

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what is ethereum?

Okay, before we get into this guide, you need to do one thing:

Stop thinking of Ethereum as a cryptocurrency.

Honestly! Although Ethereum does use a form of digital currency, it’s much bigger than money.

Ethereum doesn’t aim to be a global cash system like bitcoin. Ethereum is more like… the internet.

It’s often referred to as the “world computer,” but in simple terms, Ethereum is a platform for anyone to build something with blockchain technology.

Ethereum is a playground. It’s like lego. Or Minecraft.

In this guide, we’ll answer the burning questions: What is ethereum? How does it work? Who created it, and where can you buy ethereum? We’ll try to answer them all in plain language. However, you may want to read our explainer on Bitcoin first to get your head around the basics of blockchain.

CONTENTS

PART 1: What is Ethereum? (A Simple Guide for Beginners)
PART 2: What Is Ether, the Currency?
PART 3: Who Founded Ethereum? a Brief History
PART 5: How to Buy and Store Ethereum
PART 6: What’s Next and Who Are Ethereum’s Competitors?

PART 1: What Is Ethereum? (A Simple Guide for Beginners)

Ethereum infographic - ethereum explained

Infographic courtesy of @angelomilan

Ethereum Basics

Ethereum is a gateway for building just about anything on the blockchain – apps, games, contracts, even new cryptocurrencies.

But why would someone create an app on Ethereum rather than, say, the Apple app store or a normal website?

To understand why, let’s take a look at the Apple App Store and its problems.

Firstly, Apple is acting a gatekeeper. Every app must be vetted and approved by Apple. In fact, Apple rejects tons of apps or forces them to change how they operate.

Secondly, all the apps are hosted on Apple’s servers and accessible only to those with an Apple ID

This is the definition of centralization. One company controls many thousands of apps.

Then there are the apps themselves. A banking app, for example, saves your personal details, account numbers, and balance on its servers. Another example of centralization.

Ethereum infographic centralization explained

What’s Wrong with Centralization?

First, there’s the philosophical argument. Should one company, like Apple, really be the gatekeeper to the world’s apps?

Second, there’s the practical argument. If all the apps are stored in the same place (Apple’s servers), it’s much easier to hack. There’s one point of failure.

The same goes for the apps themselves. If all your private information and data is stored on the app’s servers, it’s more vulnerable to thieves.

Even websites are centralized. They’re built on cloud servers owned by hosting companies. One gatekeeper. One point of failure.

But what if websites weren’t hosted on one central server? What if apps didn’t have to be approved by Apple and stored on their cloud?

Enter Ethereum…

How Does Ethereum Work?

Ethereum is like the app store, except it isn’t owned or controlled by any one person or company.

Everything built on Ethereum is supported and verified by thousands of computers, all at once, all over the world. It uses blockchain technology to make sure there is no central authority.

Ethereum infographic how ethereum works

It takes what Bitcoin did for money and applies it to any industry on the planet.

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What is Ethereum

How Is Ethereum Different to Bitcoin?

Let’s back up and talk about Bitcoin for a moment. Bitcoin uses the blockchain to record financial transactions with complete transparency and security.

In other words, bitcoin is all about money.

But blockchain doesn’t only have to track money. Blockchain can record just about anything: electoral votes, goods, stocks, oil, contracts, data, home ownership, cartoon cats! (yes, really.)

Ethereum takes Bitcoin’s underlying technology and expands it for everything. More importantly, it allows creative developers to build things on it.

vitalik buterin ethereum circle“Bitcoin is great as a form of digital money, but its scripting language is too weak for any kind of serious advanced applications to be built on top.” – Vitalik Buterin, Ethereum founder.

 

Having said that, Ethereum and Bitcoin do share the same core values that make it so strong:

No censorship – Anyone can build anything they want, without a large company or government limiting their vision. Like Bitcoin, there’s no middleman.

Secured with cryptography – Like everything on the blockchain, building on Ethereum is secure. Transactions are encrypted and there is no single point of failure, so it’s very difficult to hack.

Immutable – Transactions on the blockchain cannot be reversed or altered.

Transparent – All transactions are preserved in the blockchain forever.

Still confused? Watch Ethereum’s founder Vitalik Buterin explain the whole concept:

Okay, so we know that Ethereum is a gateway to building on the blockchain. But what exactly can you do with it?

Ethereum Dapps (Decentralized Applications)

Most developers use Ethereum to build Dapps (decentralized applications). Dapps are just like an app on your phone, or a website, but hosted on the blockchain.

A Dapp is essentially any blockchain project that does something useful.

Bitcoin could be considered a Dapp. It’s a Dapp for transferring money without a bank.

Many thousands of others exist. For example, you might have heard of Cryptokitties. It’s a Dapp for buying and trading collectible cartoon cats. It’s like Pokemon cards but on the blockchain. It might sound ridiculous, but it’s actually quite revolutionary. Every collectible crypto kitty is 100% unique and cannot be duplicated because it’s on the blockchain. The rarity lead one buyer to pay over $100,000 for one crypto kitty.

cartoon cryptokitties collectibles on ethereum

More practical Dapps include Ethlance, a completely transparent freelance jobs portal. There are no fees and every contract between freelancer and client is executed on the blockchain. No more chasing payments for freelancers.

Read more: 10 Most Popular Dapps on Ethereum Right Now

Ethereum: A Launchpad for New Cryptocurrencies

Many of the Dapps built on Ethereum have also launched their own cryptocurrencies.

In fact, some of the biggest cryptocurrencies on the planet started on Ethereum.

EOS, TRON, Vechain, and ICON all started life as projects on the Ethereum network. They have since branched off and created their own blockchain (or mainnet).

A further handful of top 20 coins are still ‘hosted’ on Ethereum, including OmiseGo0x and Binance Coin.

Not only can you use Ethereum to build a new project, you can use it to create new cryptocurrencies.

Ethereum Smart Contracts

Ethereum was also created to execute smart contracts.

The easiest way to understand smart contracts is the much-used vending machine analogy.

A vending machine is a simple contract. It will automatically release a can of coke when the correct amount of money is inserted.

Smart contracts are the same. The contract will automatically execute only when certain conditions are met.

In a more practical example, let’s say you’re buying a house. Normally, a lawyer is responsible for executing the contract. They check whether the money has been transferred and whether the seller has met all the criteria.

On the Ethereum network, there is no human making that final call.

The conditions of sale are written into the smart contract in advance. When those conditions are met (such as money transfer and land survey completion), the smart contract will automatically execute.

The transfer is recorded in the blockchain forever. It is irreversible and completely transparent.

Read more: What are Smart Contracts? (A Simple, Easy-to-Understand Guide)

What’s the Point of Smart Contracts?

Smart contracts eliminate the likelihood of fraud.

In the case above, no lawyer can manipulate the contract or hide conditions, because the smart contract simply won’t execute.

It’s secure. Like Bitcoin, the Ethereum blockchain exists on thousands of computers all at once. There is no single point of failure.

Smart contracts also remove the need for trust in one particular party (like an estate agent or lawyer). The contract is verified by many hundreds of people on the blockchain.

Lastly, the fees are lower. With fewer middle-men, there are fewer costs to pay.

The Countless Use Cases for Ethereum

The potential for Ethereum is phenomenal. It can be used to decentralize everything.

Imagine an electoral voting system on the Ethereum blockchain. Every vote is recorded transparently. No third-party can manipulate the results. No more human error in counting. No more electoral hacks.

Imagine an insurance system built on Ethereum. If your house is flooded, and the damage meets all the agreed criteria, an Ethereum smart contract automatically executes to pay out the settlement.

Ethereum could improve almost every industry on the planet, from healthcare to finance to academia to logistics.

——————————————————————————————–



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Part 2: What Is Ether? the Cryptocurrency That Powers the Blockchain

When people talk about ethereum as a cryptocurrency, they’re actually talking about ether (ETH).

Ether has enjoyed incredible growth (10,000% in 2017 alone). But if ether isn’t a global cash system like bitcoin, what is it?

a chart depicting ethereum's price movement through 2017 - 2018

Ether is often referred to as the “fuel” or “gas” that keeps the Ethereum network running.

It’s a form of currency for developers who build apps and smart contracts on the system.

Let’s say you’re building an app on Ethereum. You pay a transaction fee to build on the Ethereum network, in the same way you’d pay a “hosting fee” for building a traditional website.

If you want to make changes to that app at any point, you pay a further transaction fee. These fees are proportionate to the amount of computer power needed.

That ether fee pays “miners” that maintain the Ethereum blockchain and verify the transactions.

vitalik buterin ethereum circle“Bitcoin and Ethereum are doing different things. Bitcoin is a digital currency, and the protocol is written to sustain this cryptocurrency. Clearly, Ethereum platform has ETH, it is also a digital currency, but it exists to sustain the protocol.” – Vitalik Buterin, Ethereum founder.

 

In other words, the Bitcoin blockchain exists solely to power the cryptocurrency. With Ethereum, it’s the other way round. Ethereum’s cryptocurrency (ether, or ETH) exists solely to power the vastly more powerful blockchain.

What Affects the Price of Ethereum?

In theory, the price of ether should be linked to the growth of the Ethereum blockchain. The more developers build on Ethereum, the higher the demand for ether to pay for transaction fees.

Right now, however, the price is primarily driven by speculation. Like bitcoin, ether is bought, sold and traded on exchanges around the world. Most people hold ether because they hope it will increase in value, not to actively build on the network.

Ether is also heavily tied to the price of bitcoin. Despite wildly different use cases, ethereum and bitcoin have a correlation as the cryptocurrency market moves, by-and-large, as one.

Unlike Bitcoin, Ether Supply Isn’t Capped

While bitcoin has a hard cap (only 21 million bitcoins will ever exist), ether does not.

Founder Vitalik Buterin has suggested a 120 million cap on ether supply, but it’s worth pointing out that his suggestion was posted on April Fool’s Day. However, he later confirmed that a hard-cap was worth considering.

As for current supply, 60 million ether was distributed during the first crowdfunding round in 2014. A further 12 million was gifted to a team of developers working to improve the system, known as the Ethereum Foundation.

Until recently, ether miners generated 18 million ether annually (about five ETH for every block, roughly 12 seconds). Under a new agreement, the community decided to cut the reward down to two ETH per block.

Ethereum Mining

Mining ether operates in much the same way as bitcoin.

ethereum mining

Miners are responsible for maintaining and verifying transactions across the blockchain. In return, they are rewarded with ether.

Transactions are verified and logged in the blockchain by solving complex puzzles (through computer processing). The first miner to solve a particular puzzle mines the block and is rewarded with ether.

Ethereum mining is significantly faster than Bitcoin. While bitcoin blocks are produced every ten minutes, Ethereum blocks are mined every 12 seconds.

Another key difference is who mines Ethereum.

The Ethereum community has always stressed the importance of mining by individuals, not giant corporations and mining pools. In that sense, Ethereum aims to be more democratic and less centralized. (We should point out that large mining pools do still dominate the majority of Ethereum mining).

 

PART 3: Who Founded Ethereum? (A Brief History)

Vitalik Buterin founded Ethereum in 2013 when he was just 20 years old.

Buterin was a huge fan of bitcoin. In fact, he also founded Bitcoin Magazine – one of the leading authorities in the crypto space.

In 2013, he published a white paper outlining his vision for Ethereum. Buterin sent the white paper to some close friends for critical feedback. Instead of criticism, however, he got a handful of co-founders!

More than 30 people wanted to work on the project with him. Ethereum was born.

Vitalik Buterin officially launched Ethereum in 2014 and unveiled the project at a Bitcoin conference. Shortly after, they launched a crowdfunding campaign to sell the ether token.

ethereum timeline

Infographic: Brave New Coin

A Moment That Changed Ethereum Forever

Ethereum has suffered some huge setbacks on its road to becoming the world’s second-biggest cryptocurrency.

The Ethereum “hard fork” was perhaps the most notable.

Here’s what happened. In 2016, hackers stole $55 million worth of ether. (Like Bitcoin hacks, we should point out that the hack did not breach the Ethereum blockchain itself, but software built upon it).

The Ethereum community faced a game-changing decision.

They could reverse the hack (by “resetting” the blockchain) and return the stolen money.

Or they could do nothing, accept the breach and move on.

Both options were problematic.

If they did nothing at this early stage of Ethereum’s development, it would damage the project’s credibility (who’s going to trust their money to a system with such a high-profile hack?)

But if they reversed the hack, it would fundamentally go against the values of Ethereum. The blockchain is supposed to immutable and irreversible.

Ultimately, the community voted to “reset” the blockchain, reversing the hack and returning the stolen money.

However, many Ethereum purists were furious. They believed the blockchain must never be reset. The decision spawned a new cryptocurrency: Ethereum Classic.

Ethereum vs Ethereum Classic

Resetting the Ethereum blockchain created a hard fork.

You can think of a hard fork like a train track splitting in two. The currencies share one single track until a certain point when they split and go off in different directions.

The so-called purists took one track with the $55 million hack still coded into the blockchain. This is now the Ethereum Classic blockchain.

The other track is Ethereum as we know it today: the “reset” blockchain, without the $50 million hack.

PART 3: How to Buy and Store Ethereum

How to Buy Ethereum

Ethereum is usually bought and sold on an exchange, much like bitcoin.

The most popular exchange in the US is Coinbase, but there are many others around the world.

coinbase buy ethereum

You’ll be asked to register an account on the exchange, which often means uploading a picture of your photo ID and proof of address. This is to satisfy KCY (Know Your Customer) and AML (Anti-money-laundering) rules (p.s. want to buy ethereum without ID? Keep reading below).

You can then buy ethereum using USD or your local currency of choice, depending on the exchange.

Can I Buy Ethereum Anonymously?

Yes. There are some exchanges that do not require photo ID or proof of address. However, you may have to buy ether using another cryptocurrency to do this.

For example, you can purchase bitcoin anonymously using the Bitmex exchange.

You can then use bitcoin to purchase ether anonymously on another exchange such as shapeshift.io.

How to Buy Ethereum with Cash

If you really want to go off-grid, you can buy ether with cash. Localethereum.com connects you anonymously with local ethereum sellers. Sellers are verified and rated by buyers, so there is an element of confidence here.

You can arrange a face-to-face meeting to exchange crypto or make a private transfer arrangement. Even your messages on localethereum are encrypted, so it’s private from the start.

How to Store Ethereum

Once you’ve bought ethereum from an exchange, you need to move it to a safe wallet.

You can leave your ethereum in your account on Coinbase or whichever exchange you’re using. However, this storage method is more vulnerable to hacks. (Hackers are more likely to target a large exchange than one smaller wallet).

Choosing an Ethereum Wallet

The right ethereum wallet depends on how you plan to use the ether currency.

If you are investing in ethereum for the long-term, consider a cold storage option. This keeps your ethereum offline so it cannot be accessed by hackers.

Read more: What is Cold Storage for Cryptocurrencies?

However, if you’re using ether to make regular transactions or trades, you might want a “hot wallet” connected to the internet.

Ethereum recommended wallet – A simple choice is Ethereum’s recommended wallet, called Mist. It allows you to store ethereum and any other cryptocurrency built on the Ethereum network. You can also use this wallet to write and execute smart contracts and build Dapps (more on this later). The wallet is downloadable at ethereum.org.

Hardware wallet – While the Ethereum wallet is handy for regular usage, consider a hardware wallet for cold storage. This is a like an external hard drive for cryptocurrencies. While it’s the safest option, there is a downside: if you lose the hardware wallet, your ethereum is gone forever. Popular options include Trezor and Ledger (pictured below).

ledger nano cold storage ethereum wallet plugged into a laptop

Paper wallet – A paper wallet is another form of cold storage. It’s a simple piece of paper with your ethereum public and private key written down. Paper wallets are incredibly safe because no-one can hack a piece of paper. But if the paper is lost or damaged, so is your ether.

Browser walletMetaMask is a browser extension for Google Chrome. It allows you to access Ethereum Dapps and store ether. Be aware, however, that your private key is stored by the browser and can be hacked.

Other ethereum wallets – Another popular option for storing ethereum is MyEtherWallet. It’s a unique web wallet that stores your private key safely on your computer. You can also use it to create smart contracts. Exodus is a desktop wallet with functionality for seven different cryptocurrencies.

PART 4: Can I Build on the Ethereum Network and Access Dapps?

Yes!

The whole point of Ethereum is to encourage developers to build on its ecosystem.

Anyone can build Dapps, write a smart contract or create a new cryptocurrency.

It all revolves around the Ethereum Virtual Machine (EVM): the nerve center (or brain) of Ethereum.

The EVM means developers can build on Ethereum with relative ease (without starting from scratch with complex code). To be clear, this is still advanced territory for the average user. While the EVM aims to simplify the process of building Dapps and smart contracts, it still requires advanced technical knowledge.

(Interesting fact: the EVM is ‘Turing Complete’ which means it has the potential to solve any algorithm thrown at it by developers. As a comparison, the Bitcoin network is not Turing Complete as it only handles monetary transfer).

Here’s where to start when building or accessing Dapps and smart contracts:

State of the Dapps

state of the dapps screenshot

State of the Dapps is a list of all existing dapps on the Ethereum network. It’s the easiest way to see what’s out there right now. All the dapps are categorized into genres, most-used, and top-rated lists. If you’ve already built a dapp, you can submit it to the site, too.

Ethereum Mist Browser

The Mist browser is Ethereum’s official wallet. It’s also a gateway to the world of Dapps and smart contracts.

To get started, download and install the Mist wallet.

When you launch Mist, you are now connected to the Ethereum blockchain. Create an account, and you can use this browser to send and receive ether.

You can also hit the “Contracts” tab to create your first smart contract.

ethereum mist wallet with 'contracts' tab circled

Lastly, there’s a search button which allows you to use the many thousands of Dapps on the network.

MetaMask

MetaMask is a browser extension for Chrome that gives you access to Ethereum Dapps and smart contracts.

The bonus of using MetaMask is that you don’t have to download any software (or the blockchain itself).

It works in much the same way as Mist. You can send and receive ether, create smart contracts, and browse the world of Dapps.

Five of the Most Impressive Ethereum Dapps

Golem – Golem is a revolutionary project that allows you to “lend” your idle computer power to others. Imagine you’re a video maker who temporarily needs more processing power to finish a project. Or a corporation that needs extra data storage space quickly. With Golem, you simply borrow it from others around the world by connecting to the blockchain. Users are paid in the Golem cryptocurrency (GNT) to rent out their computer power.

uPort – uPort is a Dapp built to protect and manage your identity. Using the uPort software, you enter your personal details into a smart contract. Your identity is only shared when certain conditions (which you set) are met. In other words, it gives you complete control over your identity and whom you share data with.

Augur – Augur lets you predict, and bet on the outcome of, just about anything. From the presidential election to the weather to the success of Apple’s next iPhone. You make the prediction and you then ‘trade’ the outcome alongside thousands of others. Augur launched its own cryptocurrency, REP, which is used to reward those that confirm or “report” the outcomes.

Cryptokitties – We mentioned crypto kitties before, but it’s worth repeating. At its core, cryptokitties allows you to buy and trade cartoon cats. Trading rare cats might not be the most powerful use case for Ethereum, but it has become a gateway for mainstream blockchain use. It’s the first truly viral phenomenon in blockchain, hinting at the enormous potential of the technology. It introduces people to Ethereum in a fun, engaging way.

Idex – Idex is building a decentralized exchange for trading Ethereum-based cryptocurrencies. Because it’s based on the blockchain (and not on a traditional server like, say, Coinbase) it’s reportedly more secure from hackers. It uses smart contracts to execute trades.

There are more than 1,800 dapps currently out there with more added every day.

PART 5: What’s Next for Ethereum and Who Are Its Competitors?

After the explosive growth in value in 2017, ethereum spent most of 2018 cooling off.

However, that’s not to say the platform itself isn’t growing…

Fortune 500 Companies Are Using Ethereum (JP Morgan, Microsoft, Intel, Cisco, Mastercard)

If you think Ethereum is just for cryptocurrency insiders, think again.

Some of the biggest companies on the planet are experimenting with the technology. Microsoft, Intel, MasterCard, Cisco, and JP Morgan are all part of the Enterprise Ethereum Alliance, an organization built to advance Ethereum.

Ethereum Alliance list of companies

It’s still early days but blockchain technology has the power to change entire industries. Most smart businesses are dabbling in this new world, and they’re using Ethereum as a testing ground.

Competition from New Projects

Being the first doesn’t always guarantee success.

The platform now faces huge competition from so-called “Ethereum-killers.”

EOS is perhaps the most notable. The project, which was built on Ethereum before launching its own mainnet, is built for Dapps. It is arguably faster, cheaper and more efficient than Ethereum.

Other competitors include Zilliqa, which aims to scale faster than Ethereum, and NEO which facilitates smart contracts without Ethereum’s complexity.

Ethereum’s Scaling Problems

One of the big question marks over Ethereum’s future is its ability to scale. How can it get faster and more efficient?

Developers are currently working on a long series of upgrades to the system. Under the codename “Casper,” Ethereum is slowly shifting from a “proof-of-work” system to a “proof-of-stake” system.

Without getting too technical, this should reduce the computer power required to mine ether and keep the system running.

Ultimately, it will lead to faster transaction times and lower fees.

Watch Vitalik Buterin talk about his plans for scaling Ethereum below:

For now, Ethereum remains the go-to platform for building new technology. It is the gateway to the blockchain, and we are only just scratching the surface of its potential.

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blockchain nevada lab

In the middle of the Nevada desert, a cryptocurrency pioneer is building an ambitious blockchain community and research center. 

Nestled between Tesla’s gigafactory and facilities run by Google and Apple, the sprawling blockchain “utopia” will feature a high-tech park, an e-sports arena, and a college.

This is the grand vision of Jeffrey Berns, a lawyer-turned-entrepreneur who made his fortune buying ethereum back in 2015. After selling at an opportune moment, he amassed a multi-million sum.

“This will either be the biggest thing ever or the most spectacular crash and burn in the history of mankind”

Speaking to the New York Times, Berns outlined his ambitious goal of building a community around blockchain technology.

He plans to establish a new blockchain town on the Truckee River, complete with schools and houses, all with full backing from the local Storey County officials in Nevada.

Visit the site at the moment, however, and you’ll find a solitary office building acting as the nerve center for the project. Berns has poured more than $300 million into the land and development so far, including the hiring of 70 staff members to get the project off the ground.

Nevada blockchain laboratory
A future vision for the blockchain research park. Credit: Ehrlich Yanai Rhee Chaney Architects and Tom Wiscombe Architecture

High-Tech Neighbors: Tesla, Google, Apple

This once-quiet desert region in Nevada is now home to some of the biggest tech companies on the planet.

Tesla’s notorious “gigafactory,” the biggest factory on Earth, is located right next to Jeffrey Berns’ blockchain development. Apple and Google’s data centers are nearby, with Switch’s data center based near Las Vegas. Microsoft also runs an operations center in the region.

If San Francisco is the beating heart of the tech world, Nevada is its nerve center.

Tesla was lured here with a $1.3 billion incentive, while Berns cites the low tax environment and zero income tax.

The location of his blockchain utopia puts future blockchain research right in the heart of the tech world. It’s an apt choice for a future of collaboration and experimentation.

Powered by Ethereum

Berns may have made his fortune with ether, but his love for Ethereum doesn’t end there. He plans to run the entire project and community through the Ethereum blockchain.

Further reading: What is Ethereum? (A Simple, Comprehensive Guide for Beginners)

All employees and residents in the community will use the Ethereum system to vote on local decisions. They’ll also use it to store and control their personal data, with private keys stored across multiple devices for security.

As an extra backup, Berns is planning to build cold storage and deep storage vaults in the Nevada mountains.

This blockchain utopia won’t just help develop blockchain technology, but actively use it to function. The societal experiment is as big a feature as the blockchain laboratories he aims to build.

“Something tells me this is the answer”

As he explained to the NYTimes, “Something inside me tells me this is the answer, that if we can get enough people to trust the blockchain, we can begin to change all the systems we operate by.”

“Innovation Park” as the development is known, is still in the early stages, but it’s an exciting venture for blockchain technology. We may begin to see not just technological advancements, but real community change, powered by blockchain. 

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sidechains

Lack of scalability has been one of the biggest problems of blockchain technology since the release of Bitcoin back in 2009. Slow transaction speeds, high fees, and congestion have become major stumbling blocks, but sidechains may offer a solution. 

In this piece, we cover everything you need to know about sidechains, from the basic definition to the evolution of this technology to potential applications for blockchains. 

We not only discuss why sidechains are important from a technical perspective but also why they are an integral part of driving real-world uses of blockchain technology.

Sidechains, Explained in Simple Terms

Think of it this way. A blockchain can be compared to a highway for vehicles. While one lane may be enough for a steady flow of cars, it probably can’t support a surge of hundreds of thousands of vehicles. 

If there are thousands of cars on the highway, it’s likely to result in slower travel times and increased congestion.

The best way to solve this is by creating a better infrastructure for travel. 

Now, apply this concept to blockchain technology. The intent of any blockchain is to be able to easily send and store all user data (for example, transactional data of cryptocurrencies, data for dapps and smart contracts, and more). 

The biggest issue, however, is that each blockchain has traditionally been reliant upon one lane of traffic – the mainchain. 

By creating multiple roads that connect to the main road, we can create a more efficient transportation system. Similarly, this concept can be used in blockchains. 

Sidechains are mechanisms that allow for data processes to take place off the mainchain, all while being connected to the mainchain if needed. Just as a car can travel back and forth from the main road to a side road, so can data between a blockchain’s mainchain and its sidechains.

sidechains 2
Credit: CryptoIQ

The difficult part is moving assets (like bitcoin) from the mainchain to a sidechain securely, while proving the bitcoin is yours.

Done correctly, however, it’s theortically possible to make faster transactions via a sidechain, or even swap bitcoin to ether without using an exchange.

Why Are Sidechains Needed?

At first, blockchains didn’t technically have a major infrastructure issue. However, as traffic increased, we began to see these issues become more apparent. 

Take the Ethereum blockchain, for example. As more people started using CryptoKitties and other dapps, network fees increased.  Scalability problems became more obvious.

Similar to roads during rush hour traffic, blockchains were (and still are) mostly unprepared to deal with an increase in users and transactions during peak usage times. This became particularly obvious in December 2017. 

More People Using Blockchain = More Congestion

Around December 2017, we saw a range of factors expose the scaling problem of blockchains:

First, more people were buying cryptocurrencies due to a bull market. 

Second, new dapps that used large amounts of data were arriving on the scene. 

Third, there was a rapid increase in the number of initial coin offerings (ICOs) that utilized existing blockchains to issue new tokens. 

All of this culminated in record highs for blockchain transaction fees. Blockchain project teams certainly knew that this problem could happen but didn’t necessarily know the extent of the impact. 

Ethereum transaction fees

That’s why research has been going on to develop a variety of scalability solutions. Sidechains have been discussed for quite some time but weren’t yet capable of providing the solution that was needed at that time.

Although we haven’t seen congestion like December 2017 since, blockchains need to prepare for the future.

For instance, projects have to consider how another bull market could once again expose scalability issues. 

Additionally, we should consider the potential for new blockchain innovations (beyond just cryptocurrencies). These will require larger amounts of data, potentially beyond the limits of mainchain technology. Sidechains are one proposed solution to expand the types of apps that blockchains are capable of running.

Why Haven’t Sidechains Been Adopted Sooner?

In blockchain technology, all sorts of advancements have been made only in the last couple of years. So why do some integrations (i.e. addition of sidechains) take longer than others? This is a valid question. 

The best answer is that implementing newer technologies comes with big risk. Look at blockchain platforms like Ethereum and EOS. Not only do they feature their own native cryptocurrency but they also support dapps and tokens from other projects. 

By not considering all of the current and future risks of making a big change like sidechain integration, any given blockchain risks not only its own project but also hundreds or thousands of others.

In theory, sidechains can ensure much greater scalability without risking the security of the mainchain. In reality, this hasn’t yet been 100% proven. 

The “Scalability Trilemma”

Ethereum founder, Vitalik Buterin, summed things up when he outlined the “scalability trilemma.”

vitalik buterin scalability

The trilemma points to three things key to blockchain technology: security, decentralization, and scalability.

Most solutions can improve one or two of those things, but usually at the expense of one of the others. In other words, if you want scalability, you probably have to sacrifice security and/or decentralization.

This is the case with sidechains.

Sidechains have been notoriously difficult to implement because they rely upon SPV (simplified payment verification proofs). With SPV proofs, it’s possible to prove ownership of funds when sending from a sidechain to the main chain. 

However, without SPV proofs, there is a possibility that, when users or miners move their money back to the main chain, they could take more cryptocurrency funds than they really own in some scenarios. 

According to some research, SPV proofs are also subject to a few different types of attacks, which creates a potential security risk for the entire blockchain. This is why, “trusted sidechains”, which are more centralized sidechains run by a few blockchain companies, have dominated sidechain implementation as of 2018. 

Since the goal of most blockchain project teams is to move towards a more decentralized system, relying upon a trusted/centralized sidechain would run counter to their core principles. 

At the same time, scalability is also a top priority. Still, development teams have been reluctant to accept an either-or scenario where scalability is achieved by sacrificing decentralization.

Progress in Sidechain Technology

The discussion of how to make blockchain technology more scalable has been going on since 2012. 

Sidechain-specific research has been going on since around 2014. For the most part, sidechains remain in the research and development phase even in 2018. 

This is because researchers have felt that the technology still lacks certain key components needed for real-world implementation. However, this has begun to change just in the past year or so. 

In October 2017, Aggelos Kiayias, chief scientist at IOHK, made a technical breakthrough that could help propel sidechains into the next stages of adoption. In a scientific paper called “Non-Interactive Proofs of Proof-of-Work”, Kiayias explains the increasing importance “to be able to efficiently handle multiple blockchains by the same client and reliably transfer assets between them.” 

In this research, Kiayias outlines the world’s first Proof of Proof-of-Work. The research shows that this proposed design could use SPV proofs that are able to prevent many of the normal attacks. 

From a security standpoint, Kiayias’ work is a major milestone for not only the adoption of greater scalability within one blockchain but also across multiple blockchains.

Bitcoin, Ethereum, EOS: Cross-Blockchain Communication

In the paper, Kiayias describes an ICO which distributes tokens issued on one blockchain but allows paying for them using coins in another blockchain. 

Essentially, using this research to build a real-world application could allow for the possibility of cross-chain communication. 

For instance, in the future, we could see interoperability between different blockchain networks (i.e. Bitcoin and Ethereum, EOS and NEO, or a variety of other combinations).

This is one of several ongoing efforts by around the globe to research how to improve the performance of sidechains. Here are some more important examples.

3 Projects Focused on Sidechain Deployment

Liquid

Blockstream Liquid side chain

Developed by Blockstream, this project was actually the first commercial sidechain on the market. It has already been implemented by a few different cryptocurrency exchanges. With Liquid, every transaction uses real bitcoin, pegged via a sidechain to the Bitcoin blockchain. This solution also ensures that users are always dealing with real, verifiable assets. 

This project uses a federated sidechain – a private blockchain with different features, capabilities, and benefits than the main Bitcoin blockchain. 

According to the Liquid website, Liquid will never be as decentralized as Bitcoin. However, it is designed to remove control from any single party, geographic location, or political jurisdiction. 

It also allows for increased privacy via the “confidential transactions” feature, which hides transaction amounts from everyone except for the parties directly involved in the transaction itself.

Plasma

This is a solution that uses a series of smart contracts that run on top of the Ethereum blockchain. Plasma’s goal is to scale Ethereum to be able to handle millions (or even billions) of transactions per second, compared to the current amount of only 10-15. 

This is possible because Plasma eliminates the need for every node on the network to verify all transactions as they occur.

Altcoin.io is one decentralized exchange that has created its own Plasma-like sidechain architecture to ensure that transactions are trustless and secure, but still extremely fast. 

Projects like Ethereum and OmiseGO are driving the research, development, and implementation of Plasma as a scalability solution. Ethereum’s Vitalik Buterin said in May 2018, 

“So if you get a 100x from Sharding and a 100x from Plasma, those two basically give you a 10,000x scalability gain, which basically means blockchains will be powerful enough to handle most applications most people are trying to do with them.”

Rootstock

rootstock

What sets Rootstock (RSK) apart from many other proposed solutions is that it is a drivechain/sidechain hybrid two-way peg designed to port Ethereum’s smart contract functionality to Bitcoin without impacting the main blockchain whatsoever. This is a significant project because it would be the first project to bring any sort of smart contract functionality to the Bitcoin blockchain.

In 2017, crypto security expert Sergio Demian Lerner released information about Lumino, which is a compatible version of the Lightning Network built on top of Rootstock.

During this process, Lerner introduced a new protocol called the Lumino Transaction Compression Protocol (LTCP), which forms the transaction layer to the Lumino network. The purpose of LTCP is to create far smaller bitcoin transactions to enable as many as 100 transactions to be processed by the network every second. That’s six 6-to-33 times higher than Bitcoin’s 2018 transaction limits. 

For those concerned with potential privacy concerns, Lerner suggested in 2017 that users could add greater privacy to transactions by techniques like creating new accounts with each transaction or using tumbling services to obfuscate (hide) the origin of their coins.

Future Possibilities for Sidechain Technology

The possibilities for sidechain implementation are continuously increasing with research advancements. Sidechain technology is not just important from a technical perspective. It can enable blockchains to achieve more transactions per second while also reducing transaction fees. 

Furthermore, it is one of the most vital components to driving blockchain capabilities far past what is currently possible today. When we look at decentralized applications in 2018, many are still quite rudimentary. 

A good comparison is to think of blockchain in 2018 kind of like internet connectivity in the early 2000s. 

It was still much better than the 1990s, for example. Still, there was a lot to be desired. Back then, there were no easily-accessible mobile technologies (i.e. 5G networks), so devices couldn’t connect from anywhere. 

Connection speeds were also significantly slower. Similarly, blockchains in 2018 are limited in what their services they can do. However, through the proper implementation of sidechain and other scalability solutions, any given blockchain could potentially run numerous types of advanced applications (for example, AI, IoT, and more) that require large amounts of data. 

This could empower applications that are merely concepts in 2018 as well as future applications that aren’t even in the theoretical stages yet.

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