ETHEREUM BLOCKCHAIN


The fundamental structure of how cryptocurrency works applies to both ETH and BTC; however, each technology has a different goal. Bitcoin is strictly a digital currency, and mostly functions as a form of payment. Ethereum takes a different approach, and functions as a platform through which people can use tokens to create and run applications and create smart contracts. So, let’s stop there. You may be wondering, “What is a smart contract?”

The smart contract is one of the major differences between Ethereum and other types of digital currencies. It’s basically a contract, but instead of being written physically or in a digital format, it’s written in code. The creator then uploads the contract into the blockchain.

Progress on the terms of the contract is tracked and stored in the public ledger, which makes the details surrounding that contract tamperproof.

Ethereum is also being used as a platform to launch other cryptocurrencies. Because of the ERC20 token standard defined by the Ethereum Foundation, other developers can issue their own versions of this token.

Ethereum has recently created a new standard called the ERC721  token for tracking unique digital assets. One of the biggest use cases currently for such tokens is digital collectibles, as the infrastructure allows for people to prove ownership of scarce digital goods.

Ethereum is also being used as a platform to launch other cryptocurrencies. Because of the ERC20 token standard defined by the Ethereum Foundation, other developers can issue their own versions of this token.

Ethereum has recently created a new standard called the ERC721  token for tracking unique digital assets. One of the biggest use cases currently for such tokens is digital collectibles, as the infrastructure allows for people to prove ownership of scarce digital goods.

I am text block. Click edit button to change this text. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

Ethereum Transactions Process

Whenever a user wants to send Ether (ETH) across the network, the transaction is propagated across various devices running the Ethereum protocol globally. Once the transaction is verified, it then “waits” inside the Memory Pool (also called ‘Mempool’), which is a temporary resting place for transactions. Miners will pick transactions from the mempool to be included in the next block, according to various factors such as fees and age of the transaction. Until it is picked up, it is considered as an “unconfirmed transaction” or a “pending transaction”.

POLKADOT AND KUSAMA NETWORK


Polkadot is a software that seeks to incentivize a global network of computers to operate a blockchain on top of which users can launch and operate their own blockchains.

In this way, Polkadot is one of a number of competing blockchains aiming to grow an ecosystem of cryptocurrencies, other notable examples of which include (ETH), (ATOM) and (EOS).

However, Polkadot, launched in 2020, is among the newest, and it introduces a number of novel technical features toward its ambitious goal.

To begin, Polkadot is designed to operate two types of blockchains. A main network, called a relay chain, where transactions are permanent, and user-created networks, called parachains.

Parachains can be customized for any number of uses and feed into the main blockchain, so that parachain transactions benefit from the same security of the main chain.

With this design, the Polkadot team contends transactions can be kept secure and accurate using only the computing resources required to run the main chain. Users, though, gain the added benefit of being able to customize many parachains for many different uses.

The Polkadot team believes this design will let its users perform transactions more privately and efficiently, creating blockchains that don’t disclose user data to the public network or that otherwise process a greater number of transactions.

What Makes Polkadot Different Than Ethereum?

Polkadot and the forthcoming major update to Ethereum, known as Ethereum 2.0, share many similarities in design and operation.

Both networks operate a main blockchain where transactions are finalized and allow for the creation of many smaller blockchains that leverage its resources. Both technologies also use staking instead of mining as a means of keeping the network in sync.

Research is ongoing on how transactions between the networks could be made interoperable. Parity, for example, has developed technology designed for users who may wish to deploy applications leveraging Ethereum’s code and community, but that would run on Polkadot.

Lastly, developers can use Polkadot’s development framework to simulate a copy of the Ethereum blockchain that can be used in their own custom blockchain designs.

I am text block. Click edit button to change this text. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

How does Polkadot work?

  • The Relay Chain – The main Polkadot blockchain, this network is where transactions are finalized. To achieve a greater speed, the relay chain separates the addition of new transactions from the act of validating those transactions. This model allows Polkadot to process over 1,000 transactions per second, according to 2020 testing.
  • Parachains – Parachains are custom blockchains that use the relay chain’s computing resources to confirm that transactions are accurate.
  • Bridges – Bridges allow the Polkadot network to interact with other blockchains. Work is underway to build bridges with blockchains like EOS, Cosmos, Ethereum and Bitcoin, which would allow tokens to be swapped without a central exchange.

The Relay Chain

To keep its network in agreement about the state of the system, the Polkadot Relay Chain uses a variation on proof-of-stake (PoS) consensus called nominated-proof-of-stake (NPoS).

This system allows anyone who stakes DOT by locking the cryptocurrency in a special contract to perform one or more of the following roles necessary to its operation:

  • Validators – Validate data in parachain blocks. They also participate in consensus and vote on proposed changes to the network.
  • Nominators – Secure the Relay Chain by selecting trustworthy validators. Nominators delegate their staked DOT tokens to validators and thus allocate their votes to them.
  • Collectors – Nodes run that store a full history for each parachain and aggregate parachain transaction data into blocks for addition to the Relay Chain. 
  • Fishermen – Monitor the Polkadot network and report bad behavior to validators.

Users who stake DOT and perform these roles are also eligible to receive DOT rewards.