Ether (Ether, Ethereum cryptocurrency)

The monetary unit of the Ethereum blockchain platform is ether.

The company and its blockchain platform

Main article: Ethereum

Cryptocurrency, just one of the options for using the Ethereum blockchain platform. Learn more about the company and its platform here.

2022

Checking US authorities to automatically block user transactions under sanctions

In November 2022, the Ethereum cryptocurrency is totally checked by OFAC (Office of Foreign Assets Control).

By November 5, the number of "payment censorship" blocks on the Ethereum network exceeded 73%. Network validators are forced to install add-ons that automatically check user transactions. If sub-sanctioned wallets and prohibited cryptomixers are found in the sender or recipient address chain, the transaction is automatically rejected. Compliance with OFAC allows the United States to apply economic and trade sanctions in crypto payments.

Ethereum changed the protocol and the power consumption of the system will be reduced by 99.95%

On September 15, 2022, the creator of the cryptocurrency Ethereum Vitalik Buterin announced the completion of a large-scale modernization. ON which significantly reduced energy consumption of the second largest in the cryptocurrencies world.

Шаблон:Quote 'This action completed the transition of Ethereum to the proof-of-stake protocol, officially canceling the proof-of-work protocol and reducing energy consumption by ~ 99.95%, the page says Ethereum.org.

Виталик Бутерин сообщил о завершении масштабной модернизации ON

{{quote 'Ethereum blockchain has been around since July 2015 and planning for this transition has been going on for several years. Since a failed transition could lead to chaos, Ethereum developers repeatedly pushed back The Merge date throughout 2022 to get more time to prepare, Ars author Timothy Lee previously wrote in detailed material about the transition to the new protocol. The merger will deprive Ethereum miners of work, since the new system does not require the powerful video cards that were previously necessary to maintain the blockchain and create a new ether, Lee wrote. }} Before the switch, Ethereum's annual power consumption was comparable to Chile's, and its carbon footprint to Hong Kong, according to Digiconomist's Ethereum Energy Consumption Index. The new protocol eliminated the need for energy-intensive mining and instead enabled network security with ETH stakeholders.

The changes should be painless for those who own Ethereum tokens. The funds will still be available without any action on the part of the user. Wallets work in exactly the same way after a merger as they did before it.

Now that the changes have been completed, mining is no longer a means of creating valid blocks. Instead, proof-of-stake validators, who are now responsible for processing the validity of all transactions and creating new blocks, took over this role. Mainnet's merger with Beacon Chain also merged Ethereum's entire transaction history, so that no transactions were lost in the process, the site said.

Earlier, mining is an economically intensive activity that requires a high level of ETH emission to maintain, according to the Ethereum page. Prior to the merger, the mining fee was about ETH 13,000 per day and the staking fee was ETH 1,600 per day. Only ~ 1,600 ETH per day remained after the merger, resulting in a ~ 90% reduction in total new ETH emissions^[1]

2020

Ethereum rises 472%

The market capitalization of the 30 largest cryptocurrencies in 2020 increased by 308% and reached $552 billion, while in 2019 the positive dynamics was significantly lower (+ 62%). This is evidenced by CoinGecko data. Thus, the price of Ethereum increased by 472% after near-zero dynamics over the previous 365 days. Read more here.

Record earnings for miners and currency transfer fees

August 2020 was a record profitable year for Ethereum miners. On September 1, the total daily income from cryptocurrency mining amounted to more than $17 million. Thus, a new historical maximum was set, which is 270% higher than the previous one.

At the same time, Ethereum set a new anti-record. This applies to commissions for the transfer of a coin. According to bitinfocharts. com, now one transaction on the altcoin network costs the user an average of $14.5. Back in July, the amount of commissions fluctuated in the range of $0.4-0.7, and at the beginning of the year it fell below $0.1.

On the one hand, high commissions have made Ethereum mining significantly more profitable. On the other hand, users pay. Following the increase in the cost of transactions in the coin network, exchanges began to raise tariffs for its withdrawal.

2019: Massive update: Extracting currency has become more difficult

At the end of February 2019, a large-scale update of Ethereum took place, as a result of which it became much more difficult to mine the second largest cryptocurrency.

Two major updates (called hardforks), called Constantinople and St. Petersburg, were activated on the Ethereum network. Thanks to them, the EIP-1283 protocol was disabled (its vulnerability led to a delay in the release of new software), and the unit's residence time should be reduced to 15 seconds after it rose to 20 seconds as a result of the activation of the "difficulty bomb." After the update, the miners' award was reduced from 3 to 2 ETH. The Ethereum inflation rate will be about 4%, approaching Bitcoin.

Ethereum updated and mining cryptocurrency has become much more difficult

Representatives of Ethereum said that Constantinople will allow the digital currency to scale. At the same time, the speed of transactions will increase.

It is reported that in February 2020 , the "difficulty bomb" can be reactivated if cryptominers do not want to switch to a new algorithm, but remain in the old circuit.

Earlier, the growth rate of the "ether" rate was ahead of the indicators of other cryptocurrencies, which indicated its support by the market and the presence of speculative manipulations in anticipation of hardfork. By 16:00 Moscow time on March 1, 2019, the cost of Ethereum was $134.7. In February, it jumped 30%, while Bitcoin - the world's most expensive cryptocurrency - rose 12%. The market capitalization of Ethereum and Bitcoin amounted to $14.6 billion and $68 billion, respectively.

According to Reuters, as a result of the launch of two hardforks, which essentially create a new version of the blockchain program for Ethereum, miners will become less interested in spending their energy and time to extract new "ethers."

It's a big deal. The balance between demand and supply will be significantly changed, - said eToro analyst Mati Greenspan[2]

2018: Protocol created to exchange bitcoin for ether and back

On October 24, 2018, the first open source blockchain system was launched using the new Open Federated Gateway Protocol (OFGP), which is designed to conduct transactions between Ethereum bitcoins networks using a special token. Read more here.

2017

Blocking $280 million due to an error in the code of e-wallets

An error in the code of electronic wallets of the Ethereum cryptocurrency led to the blocking of funds of dozens of users for a total amount of approximately $280 million, Theregister reported on November 7, 2017.^[3]

$280 million was blocked in the Ethereum cryptocurrency system

Ethereum developers - Parity - admitted that a certain devops199 user "accidentally" involved a bug in the multi-signal wallet system, as a result of which all such wallets created after July 20, 2017 were blocked and inaccessible. It is possible that it will no longer be possible to "defrost" them.

Multisignature wallets imply the need for the consent of several users at once to move funds; this ensures their popularity among companies and investment groups seeking to secure their funds. However, Parity technologies are full of bugs than attackers use from time to time - for example, in July 2017, hackers managed to steal Ethereum worth about $30 million, just thanks to the exploitation of one such vulnerability.

Parity rolled out an update in which, however, there was another - catastrophic - vulnerability. According to Parity's explanations, the updated program allows "to turn the Parity Wallet library contract into a regular multi-signature wallet and become its owner by calling the initWallet function."

Apparently, this error was accidentally involved on November 6, 2017...; subsequently, the user destroyed the library-turned-to-wallet, thereby eliminating the library code, which, in turn, led to the inability to use multisignature contracts, since all their logic (all state change functions) was located inside this library, - says the publication Parity ([4]

The immediate culprit of the incident, devops199 wrote a series of explanations in which he stated that he was a newcomer to the field of cryptocurrencies and made a mistake in creating a wallet, after which he tried to remove it, which led to known consequences.

Meanwhile, experts give a negative answer to the question whether it will be possible to unblock the "hung" funds.

Smart contracts cannot be rolled back simply due to the Blockchain technology itself, on which all cryptocurrencies are based, "explained Oleg Galushkin, an information security expert at SEC Consult Services. - Parity managed to make a completely "childish" error, without blocking ordinary users from modifying the base code of the system. This indicates that the system has not passed proper testing. Those whose funds were blocked will most likely have to say goodbye to them. And the Ethereum system will clearly lose a large number of users - the reputational damage is huge.

Ethereum miners will receive less reward

In the Ethereum ecosystem, deservedly considered the second most popular cryptocurrency in the world, big changes are coming. Its creators are completing the development of a new mechanism for confirming proof-of-stake operations. After its implementation, miners - that is, those who provide the computing power of their computers to cryptographically ensure the operation of the ecosystem - will receive less reward. This was announced during his recent visit to Moscow in April 2017 by the 23-year-old founder of Ethereum Vitaly Buterin.

According to him, now "on-air" programmers are working on the problem of reducing the cost of a separate transaction^[5] network^[6].

Most of the world's blockchain services, including bitcoin, use proof-of-work technology. This mechanism allows you to reach consensus and avoid manipulation when creating blocks and building the only correct chain of transactions. However, its main drawback is its huge resource intensity. The amount of power required to keep computers running while running proof-of work sometimes far exceeds the power consumption of supercomputers. Experts have repeatedly called such a mechanism too wasteful. On the contrary, the way that Ethereum is currently working on avoids significant costs of external resources - instead, internal, to a greater extent virtual, capabilities of the platform itself are involved.

The Ethereum development team has finished work on the first stage of the proof-of-stake code and announced its 75% readiness. According to Vitaly Buterin, the proof-of-stake concept being developed by Ethereum will exclude the possibility of any of the network participants gaining a long-term advantage of 51%. The fact is that in order to confirm each operation inside the blockchain, miners need to solve a cryptographically encrypted problem. The reward for solving the problem is received by the one who will do it faster than others, which requires a more powerful computing complex. Already, users are joining forces to earn more from mining. The final result of such efforts may be a situation where 51% of computing power will be combined in a single center that can confirm or refute only the operations it needs or benefits. This hypothetical situation was called the "51% attack." The Ethereum programming team aims to eliminate this danger. Now they were able to configure the code so that the "51% attack" occurred only once, followed by a hardfork, that is, forced rewinding of the entire system back, as a result of which an aggressive user will lose all his money. The developers hope that this rule will protect the system from collusion by miners.

Another key feature of the new mechanism will be less remuneration for the work of miners. After introducing proof-of-stake into the existing code, miners will have to spend much less computing resources to maintain the system, and therefore, according to Buterin, it will be fair and proportional to reduce their remuneration.

Vitaly Buterin enjoys the well-deserved fame of the genius of blockchain and mathematics. Heads of financial corporations and government officials listen to his opinion about the development of new technology and platforms based on it. He himself does not consider himself a genius and always emphasizes, he only develops the idea of ​ ​ Satoshi Nakomoto, who in 2008 published the concept of cryptocurrencies. Buterin is confident that it was Nakomoto who was able to connect the disparate concepts that existed before him.

circuit technology was known 15 years ago, as was cryptographic encryption. Satoshi managed to introduce economic meaning into the blockchain and combine them using cryptography. "

Vitaly Buterin is confident in the great potential for the development of blockchain technology in Russia. He knows that there are many good mathematicians and programmers in our country, and the government is generally favorable to the new technology. According to the founder of Ethereum, there is only less talk and more work left to realize the potential.

2016: Embezzlement of $50m ethers

In June 2016, it became known about the theft of about 3.6 million broadcasts worth more than $50 million, as a result of which the exchange rate of this cryptocurrency fell by 20%.

The kidnapper of these funds published an open letter in which he stated that when removing ethers, he used only legal tools. We are talking about the function described in the smart contract, which, in addition to transferring finances, allowed you to execute other program code within yourself. The attacking investment service DAO (built on the basis of the Ethereum blockchain) made a multiple recursive call, which led to the transfer of broadcasts to its account.

The user who stole the broadcasts claims that he did not violate American law and intends to sue if the Ethereum developers make changes to the platform's program code, prohibiting the withdrawal of funds.

Theft of Ethereum cryptocurrency for more than $50 million

In order to prevent me from using the ethers obtained legally and legitimately through the use of a smart contract, soft or hard platform branching can be used. Such branches will forever and irrevocably destroy all trust not only in Ethereum, but in general in smart contracts and blockchain as technology, "said the attacker DAO.

The stolen broadcasts are blocked in the DAO subsidiary, they will not be used for 27 days. During this time, the community must decide how to proceed.

DAO participants also discuss returning the platform state to the time of the attack and extracting lost airs. It is possible to release a new version of the software that will change the operation of the distributed registry and rebuild all transactions. But any of these steps will destroy the reputation of Ethereum, warns in his record a person who claimed his own involvement in the theft of funds.

Stefan Tual, chief operating officer of Slock.it, which is involved in the creation of the DAO, believes that the attacker was unlikely to have hoped to cash out the stolen ethers, since each unit of this currency is unique and tracked.^[7]

The Solidity programming language, which developers use to write smart contracts, has a similar vulnerability, said Emin Gun Gang Sirer, a scientist working in computer and system theory at Cornell University. In 2016, he released a paper addressing the potential challenges of the DAO.

Solidity takes over the implementation of algorithms according to which a smart contract is executed and deposits of the parties are opened. Since all operations are displayed in Ethereum, this ensures trust between counterparties.

According to Emin Gang Sirera, the DAO developers tried to be very careful in eliminating such shortcomings, but it is not difficult to make such a mistake, so it is not surprising that unauthorized access to broadcasts initially went unnoticed by the system participants.

2015: Issue of $18.5 million

In 2013, the development of blockchain technologies was seriously pushed by a programmer of Russian origin Vitalik Buterin.

He realized that, in addition to monetary transactions, information about absolutely any events can be recorded in the program code: from legal documents to personal data.

So appeared Ethereum - - blockchain platform. Buterin, like Nakamoto, introduced its own currency, the platform name of the same name. At the end of 2015, Ethereum issued an issue of $18.5 million.

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