Ethereum, the world’s second-largest cryptocurrency by market capitalization, is an open-source, decentralized platform that runs smart contracts. These apps run exactly as programmed without any possibility of fraud or third party interference.
The Ethereum network went live on July 30th, 2015 with 72 million ETH pre-mined. Since its launch, Ethereum has seen tremendous growth and adoption.
The native cryptocurrency of the Ethereum network is Ether (ETH).
ETH works as a fuel for the decentralized applications (dApps) on the Ethereum network. When users want to interact with a dApp, they need to pay a transaction fee in ETH.
The transaction fee goes to the miners who validate and confirm the transactions on the Ethereum blockchain.
The current block reward for mining is 2 ETH per block and will remain constant until the end of 2020 when it will be reduced to 0.5 ETH per block.
After that, the block reward will continue to decline every 4 years until it reaches 0 ETH per block in 2140.
The total supply of ETH is not capped and is infinite. However, 18 million ETH are mined every year and it is estimated that 97% of all ETH will be mined by 2060.
Ethereum has a Proof-of-Work (PoW) consensus algorithm and plans to move to a Proof-of-Stake (PoS) consensus algorithm in the future. The PoS algorithm would allow users to stake their ETH in order to validate transactions and earn rewards.
Ethereum’s primary goal is to become a decentralized world computer that anyone can build applications on top of. The idea is that developers can create dApps that run on the Ethereum network without having to worry about censorship, fraud, or third-party interference.
Ethereum is often compared to Bitcoin because they are both open-source platforms that run on blockchain technology. However, there are several key differences between the two platforms.
Bitcoin was designed primarily as a digital currency and payment system, while Ethereum was designed as a decentralized platform that runs smart contracts and dApps.
Another key difference is that Bitcoin has a limited supply of 21 million BTC while there is no limit to the supply of ETH. This creates different incentives for miners and investors as BTC becomes more scarce over time while ETH remains abundant.
Lastly, Bitcoin uses a PoW consensus algorithm while Ethereum plans to move to a PoS consensus algorithm in the future. This means that miners who validate transactions on the Bitcoin network are rewarded with BTC while those who validate transactions on the Ethereum network will be rewarded with ETH.
In conclusion, yes ethereum does have sharding!.