Boxmining

Category: Ethereum

Ethereum is smart contract platform- it allows for the deployment of decentralized applications (Dapps). Dapps are programs that obey a certain set of conditions that cannot be altered once published – not even by the creator of the contract.
Programmable money can replace the use of third-party escrow or brokers by programming conditions directly into the transaction.

  • Sienna Network ($SIENNA): Privacy Meets DeFi

    Sienna Network ($SIENNA): Privacy Meets DeFi

    Sienna Network is a privacy-first decentralized finance (DeFi) protocol that allows a completely private lending, borrowing, and trading experience with great scalability and low transaction fees. 

    Sienna Network allows users to avoid the lack of privacy on exchanges that allow others to see what users are doing and arbitrage on those transactions with front-running — a key weakness of crypto transactions today. Front-running is the act of getting a transaction first in line in the execution queue, right before a known future transaction occurs. Bots executing such front-running operations by paying slightly higher transaction fees have been a difficult problem for DeFi users.

    Background

    Banking, cryptography, and even decentralized finance go back a long way; as far back as the 12th Century when financial crime took place on the roads of Europe. In 1135, Sienna (known as Siena in 21st Century Italy) was an important trade city and heists were common. To stop the scourge of constant robberies to places such as Veneto, the Bishop of Sienna offered loans against collateral and interest to Sienna citizens and the people who traveled to the city to trade.

    At the same time, the Knights Templar initiated a network of money transfer locations so people could deposit money in the Veneto region and travel to Sienna and Venice without the risk of losing all their money and possessions. Upon arrival at either destination, traveling tradesmen could withdraw their money from a Templar location by handing in an encrypted document that could only be decrypted by the Templars.

    By today’s standards, that encryption was so primitive that the so-called algorithm could be cracked in seconds, but it set the scene for today’s intricate systems. This is where Sienna Network comes into the picture — to build on that same idea and contribute to solutions that will become the standard in privacy-first DeFi.

    What is Sienna Network?

    Until now, the activities of DeFi users have remained an open book — publicly preserved on the blockchain and forever vulnerable. This level of disclosure has created a chilling effect for the industry, discouraging even remotely privacy-conscious users from participation in DeFi, whilst concerning regulators who wish to ensure that users, private and professional alike, are properly protected. 

    Modern blockchain-based technologies fall short when it comes to preserving privacy, and Sienna Network aims to solve the same problem that has been solved by banks for their customers for many years — privacy in terms of funds and transactions, as well as computational privacy, but without the need for any third party to be involved. 

    With Sienna Network, transactions are private. Which means that the user — and no intermediary — decides if any of the data exchanged should be shared with anybody else. This occurs by default, and uses strong encryption to protect the data. 

    Sienna Network is powered by the Secret Network blockchain, a privacy-first smart contract platform by Cosmos. To share data, users need to generate a viewing key, which allows them to decrypt the contents of the data they have sent to contracts on Secret Network. Only the user can decide if they want to share this key and their viewing key only corresponds to their own transactions and cannot be used to monitor a third party’s wallet transactions.

    By building Sienna Network on programmable private smart contracts, it enables a variety of powerful new use cases in DeFi. Programmable privacy allows feeding verifiable sensitive data into a decentralized world without revealing said data. Decentralized identities, credit scores, under-collateralized loans and privacy for institutions are some important examples.

    SiennaSwap

    At the heart of Sienna Network are robust tools for the assurance of privacy to users, including the decentralized exchange (DEX) called SiennaSwap. 

    SiennaSwap lets users trade “secret versions” of popular tokens like Ethereum ($ETH) and Cosmos ($ATOM), and flip them anonymously on the platform. For now, the number of assets is limited to the bridges the project has created, hence the absence of a secret version of Bitcoin ($BTC). The bridges currently available are to Ethereum, Monero, Polkadot, Cosmos, and Binance Smart Chain. Users are able to create as many swap pairs as they wish among each of the assets.

    Leveraging Cosmos means gas fees are low and transactions are almost immediate. A typical transaction costs about $0.02, which is extremely low compared to other blockchains and protocols.

    But perhaps the most important cost that SiennaSwap seeks to omit is that of front-running, or traders cutting to the front of the queue and scooping up lucrative trades before others. This is possible due to the platform’s privacy-first approach. Using Secret Network’s protocol, Sienna Network has found a way to turn legacy public smart contracts into Secret Contracts, which allow private interactions where Third Parties cannot monitor what’s going on. This is because the data remains inside TEEs — Trusted Execution Environments; not even the node operators of the underlying network.

    What does it mean for a user? On public ledger chains where anyone with a wallet address could see others’ entire transaction history and that of their friends, with Sienna’s token and via the SiennaSwap, the wrapped ‘secret’ tokens such as secretETH the transaction history cannot be looked up and seen. This fixes several core issues including the aforesaid blight of front-running.

    Sienna Lend

    Another important product by Sienna Network is Sienna Lend which allows users to borrow and lend both public and private crypto assets. Moreover, users can deposit their tokens and earn interest from them or use their deposit as collateral to borrow a wide range of assets. These assets include stablecoins, cryptocurrencies, and tokenized assets such as real estate, stocks, gold, NFTs, and more.

    The entire process will be private and no one can see a user’s earnings or other financial details.

    The Need for Financial Privacy

    Privacy is a fundamental human right — or it should be. It is a basic individual right to choose whom to share with — not just information, but other important aspects of life such as financial transactions. 

    But here a problem arises — while cash has relevant anonymous uses — larger transactions should not be anonymous because no system should enable money-laundering or the funding of bad actors. This is especially relevant at a time when the opinion of policy-makers has transmuted into a surveillance economy, with market actors required to police and report with severe penalties for failures. Whether we like it or not.

    If a crypto user sends a beneficiary an amount of tokens, both wallets are consequently linked via that transaction. This seems like a basic and fair exchange, but it also means that the beneficiary can now see the complete transactional history of that person’s wallet. This is patently an infringement of privacy and needs to be fixed.

    So, privacy matters. It is a mechanism for individuals and institutions to decide to control their data — sometimes transactionally, at other times to prove or disclose information or financial actions by choosing to share that data with relevant and selected Third Parties.

    $SIENNA Token Utility

    $SIENNA is a governance token which provides a dual function in the network’s ecosystem.

    It acts as the governance token of the Decentralized Autonomous Organization (DAO), allowing its holders to vote on possible changes on both the Decentralized Exchange (DEX) and the lending protocol.

    It also powers the incentivization mechanism to encourage positive behavior from users. Users are awarded with $SIENNA based only on its actual usage, activity and contribution on the Sienna Network, whereas users of the Sienna Network and/or holders of $SIENNA which did not actively participate will not receive any $SIENNA incentives.

    The token can be bought directly on Secret Network on SiennaSwap, but wrapped versions can also be bought on Uniswap and Pancakeswap.

    Conclusion

    Until now, DeFi users have had to choose between the personal freedom of decentralized finance, or the personal privacy of centralized finance. Never were both achievable at the same time. 

    Sienna Network solves this core problem by developing a course correction for the industry, delivering all of the many benefits within the DeFi space, while at the same time protecting users from the unwanted prying of third parties. 

    Sienna Network’s users can freely interact with powerful DeFi products, enjoying the same levels of privacy, or even greater, as in centralized finance. Sienna Network will seek to spur the sector onto new frontiers, providing tools that are programmatically private. Sienna Network’s protocols will also be used to empower self-sovereign identities. 

    These factors place Sienna Network at the vanguard of privacy-first decentralized finance. Now is the time to unlock the full potential of DeFi.

    Project Links

    Website — https://sienna.network/

    Discord — https://discord.gg/jZk8ggm7XP

    Telegram — https://t.me/GoSiennaNetwork

    Twitter — https://twitter.com/sienna_network

    Medium — https://medium.com/sienna-network

    Sources:

    https://sienna.network/static/documents/Sienna-Network-Whitepaper-V1.3—November-2021.pdf

    https://www.investopedia.com/terms/f/frontrunning.asp

    https://scrt.network/blog/introducing-sienna-a-privacy-first-defi-protocol

    https://decrypt.co/82825/sienna-network-launches-privacy-centric-defi-crypto-exchange

    https://techcrunch.com/2021/10/07/shooting-for-greater-privacy-in-defi-sienna-network-launches-siennaswap/?guccounter=1

    https://medium.com/sienna-network/privacy-matters-9ed864973f5f

  • Swag Finance Token Launch guide

    Swag Finance Token Launch guide

    Swag.live is a popular adult entertainment platform with over 10 Million users worldwide with over $12,000,000 USD annual revenue (source). SWAG pioneered the Asian adult entertainment industry, offering both streaming and pay per view videos for over 10,000 content producers. The team is headed by Sam Liu and had origins in Taiwan. Currently, SWAG has set up offices in Montreal in charge of expanding operations to North America and worldwide. SWAG has signed up top global talents such as Eva Elfie to produce content for the platform.

    Swag is offering a decentralized community governance token – SWAG – to continue the expansion and move to a Decentralized Autonomous Organisation (DAO). Overall, SWAG is issuing a total of 540 Million tokens to achieve decentralized governance.


    Swag Governance Tokens

    SWAG Live platform

    SWAG has decided that instead of growing the community in a centralized fashion with few participants, they are choosing to embrace community governance. The key is to allow more participants in their ecosystem, allowing for faster product iteration and better product design by including community feedback and design making. The key is to harness the power of the community and decentralization to push SWAG’s growth to the next level. In many ways, SWAG’s token offering is an experiment, as the adult industry has been traditionally shrouded in secrecy – with big players making most of the decisions and taking most of the profit.

    Each SWAG token is entitled one vote in community governance. Governance voters will be rewarded via “Squirt pool” that have valuable rewards (see below).

    Token information:

    Initial offering price: $0.10 per SWAG
    SWAG Total Supply: 625,000,000 SWAG tokens.

    To guarantee the governance of the SWAG community, the team has stated the following

    • Team will not privately coordinate any decisions
    • Team will no actively participate in DAO governance
    • Team will not pay for DAO maintenance, and DAO management is not hired by the team.

    SWAG token offering – First Swap Event

    Swag will offer tokens via a “First Swap Event” (FSE) held on Cream.finance (you can read our take on CREAM here). The FSE event will take place on the 14th October 2020 at 2:00pm (UTC), with an initial price of $0.10 per SWAG. Cream offers the ability to swap tokens via its decentralized exchange component. The FSE will start with each SWAG token through two 50/50 pools:

    SWAG/USDC (500,000 / 50,000)
    SWAG/CREAM (500,000 / 50,000 USDC equiv)

    To swap for SWAG in the FSE, participants will need to have both $USDC and $CREAM, along with $ETH (for gas fees). The Team does remind people that after submitting a transaction, it could take 1-2 minutes for confirmation. Also, CreamSwap runs on an Automated Market Maker (AMM) mechanism. Hence it is possible that prices of SWAG may change whilst the transaction is pending confirmation. However if this happens the transaction will simply fail, but your tokens will not be lost.

    After the FSE, participates will also be able to earn extra SWAG tokens via a yield farming event on CREAM. Users will be able to provide liquidity to SWAG trading pairs, thus increasing the size of the liquidity pools for SWAG. Cream liquidity pools function same as Balancer, so the more liquidity that is added, the more stable a trading pair will be. To find out more about liquidity pools and how they work, you an check out our article on Balancer and Liquidity Pools.

    To reward community liquidity providers, those who provide liquidity to the SWAG/USDC and SWAG/CREAM pair will able to stake their liquidity tokens (CRPT) for additional SWAG rewards. A total of 1,015,000 SWAG has been allocated for yield farming. This event is designed allow the community to provide extra liquidity token trading.

    How to participate in the First Swap Event by swapping SWAG

    To participate, you will need to go on Cream Finance. There you can choose the ERC-20 tokens (either $CREAM or $USDC) you want to swap for SWAG, remember to select $SWAG in the lower row. Then unlock and swap your ERC 20 tokens by clicking “Unlock” and then “Swap”. (https://www.nelsongreerpainting.com/)

    SWAG Reward Pools

    SWAG will have yield farming features. There will be 2 Reward Pools: $SWAG/$CREAM and $SWAG/$USDC. SWAG holders who want to join these Reward Pools must provide their tokens, known as liquidity. The purpose of this is to increase the depth of trading pairs, reduce the likelihood of price slippage and keep the stability of SWAG tokens. In return, SWAG hotels can benefit through earning passive returns by means of swap fees.

    How to add liquidity to SWAG Reward Pools

    Go to the Cream Finance Pools and select the trading pair (i.e. either $SWAG/$CREAM and $SWAG/$USDC). Unlock the permission to transfer ERC-20 tokens by clicking the lock icon for both tokens. Click “add liquidity”- after doing this you will get CRPT tokens.

    Then, go to the Cream Finance Rewards page. There, choose the Reward Pool (i.e. either $SWAG/$CREAM and $SWAG/$USDC). Click “Enable” to unlock CRPT transfer permission. Then click “Stake” to stake your tokens.

    Claiming your rewards is easy, simply click “Claim Reward” on the Rewards page on the side bar.

    SQUIRT and Rewards for DAO participants

    The SWAG community is rewarded in the form of “SQUIRTS” (yes, this is what they are actually naming it). SQUIRTS are a reward for SWAG token holders that participate in community governance by contributing their time to debate important issues, research and discuss important business matters to help grow the platform. To join SQUIRTS, SWAG holders can debate on a particular governance proposal, and then stake their SWAG tokens to vote.

    Squirts can be rewards in the form of a stablecoin, SWAG token, or other tokens, and are designed to be rewarded pro-rata to all voters on the SWAG DAO. The rewards are split according to votes entered – with 1 token being 1 vote. This will drastically improve SWAG governance and community participation, as users are rewarded for taking part in the DAO.

    SQUIRT 2 is ongoing and will end at 10:59 on 30th October 2020 (UTC) and note that your tokens will be locked up for 7 days from the time of your vote. There will be a total of 4 SQUIRTS in November 2020, with a total of 1million USDC to be distributed as follows:

    November 2020 SQUIRTS
    November 2020 SQUIRTS

    SQUIRT 3: Oct 30 — Nov 6: 300,000 USDC
    SQUIRT 4: Nov 6 — Nov 13: 200,000 USDC
    SQUIRT 5: Nov 13 — Nov 20 300,000 USDC
    SQUIRT 6: Nov 20 — Nov 27 200,000 USDC

    How to stake SWAG to join SQUIRTS

    Go onto the voting page. There, stake your SWAG tokens by clicking “Stake Token”. Register to vote for a proposal by clicking “Register to Vote”, and “For” or “Against” depending on your inclination. You can then collect you SQUIRT rewards by clicking “Collect”.

    SWAG exchange pool on Uniswap

    SWAG token holders can exchange their tokens through the SWAG/USDC Pool to get Uniswap LP tokens (UNI-V2). The Team have also set up a new reward pool for Uniswap liquidity providers who can stake their LP tokens to the reward pool.

    Between 22nd to 28th October 2020, as an initial incentive for liquidity providers LP Token reward distribution will be available. Rewards will be given at each block with 25,000 SWAG available daily, totaling 175,000 SWAG for staking SWAG/USDC Uniswap LP tokens. Note however that there will be a 3 day lock for any LP tokens which are staked.

    As a side note, our community has found there is a price discrepency between CREAM and Uniswap. So users who want to sell their SWAG may want to check and compare the prices on these two platforms!

    Project: Referral Rewards- Refer a friend and get SWAG

    From 12:00 on 14th October 2020 to 12:00 on 14th November (UTC+8) SWAG will be having their referral program. A total of 50,000 SWAG will be released as rewards for those who help promote and grow the SWAG community.

    To participate, go to their event website: https://referrals.swag.finance/ and complete their Referral Rewards checklist. This checklist involves tasks such as following their Twitter, Discord and Telegram and afterwards completing the form on the site. Then you will be able to get an invitation code to send to your friends.

    Completing the Referral Rewards checklist earns you 1 entry. Then if you refer a friend both you and your friend will each get one entry. So as an example, if you refer 5 friends, you would get a total of 6 entries. At 6:00p.m. on 14th November 2020 (UTC+8), the team will draw 1,000 winners who will receive 50 SWAG as a reward. There are no restrictions on multiple entries so you can refer more friends to increase your chances of winning more SWAG!

    SWAG NFTs

    SWAG will be doing non-fungible tokens (NFTs), it was only a matter of time. The NFT market is a huge opportunity for budding artists, and apparently now also the tens of thousands of SWAGGERs (i.e. SWAG content creators).

    SWAG NFTs will soon be available on Opensea– a NFT marketplace and feature the best SWAGGERs on SWAG’s platform. They will be limited edition NFTs that will also be attached to various SWAG events and rewards.

    SWAG roadmap: What’s coming up next?

    Reward pools

    The SWAG team observed that many SWAG token holders who participated in the reward pools were unable to participate in the SQUIRTS voting sessions. Therefore in future, SWAG will host less reward pool events that would result in decreased participation in SQUIRTS.

    SWAG diamond drip

    SWAG.Live is one of the leading premium adult content platforms in Asia, and many $SWAG holders also have accounts at SWAG.Live. Therefore to reward these holders, starting in November 2020, SWAG finance will build a system that would detect the amount of $SWAG in the wallets of registered SWAG.Live members. SWAG finance would then drip SWAG Diamonds which can be collected and used on SWAG.Live app for live chat, accessing stories, live streams and gifts to content creators.

    Diamond distribution time: 4:00pm every Monday (UTC +8).
    Diamond ratio: 1 SWAG.Live diamond for every 50 $SWAG in your wallet (this includes any tokens staked in the SQUIRT pools)
    Distribution method: SWAG.Live diamonds will be sent direct to your SWAG.Live account.
    Restrictions: Only one Ethereum address can be bound to one SWAG.Live account.

    How to sign up for the SWAG diamond drip

    Bind your Wallet and SWAG.Live ID:

    1. Go to diamonds.swag.finance and connect your Ethereum wallet.
    2. Enter your SWAG.Live ID and click “Sign and bind”. Your SWAG.Live ID can be found on the SWAG.Live site under “Me”.
    4. After the binding process is complete, SWAG.Live diamonds will be sent to your SWAG.Live account every week.

    VIP group

    Holders with over 200 $SWAG can join a VIP Discord group. In addition to having access to this more exclusive discussion channel with fellow SWAG holders, the SWAG.Live team have also agreed to give a number of perks such as behind the scenes access to the SWAG.Live content creation process, limited access to SWAG short films and SWAG diamond giveaways.

    Exchange listings for $SWAG

    SWAG is currently listed on Uniswap and Hotbit. Trading will begin on Bitmart from 8:00pm on 6th November 2020 (HKT) onwards.

    The team mentioned in their latest article that their mid-term strategy is to maximise the number of potential SWAG buyers and are in discussions with the following exchanges to list their token: Binance, Upbit, Bitflyer, Bitthumb, Huobi, Bitkub, Probit, Kucoin and ZG.

    See here for our picks for top cryptocurrency exchanges.

    Conclusion

    SWAG is strongly embracing decentralization and decentralized governance allows participation in the future direction of their adult industry platform. SWAG is an already profitable business of over $12,000,000 USD annual revenue (source) and a growing audience of over 10 Million users. This Decentralized Autonomous Organisation (DAO) is designed to take SWAG to the next level, fuelling future developments, and global expansion.

    Resources:

    Swag Live (18+ only): https://app.swag.live/
    Swag Finance Medium: https://medium.com/@swag.finance
    Asia Crypto Today Coverage: https://www.asiacryptotoday.com/swagfinance/
    Block Tempo Coverage: https://www.blocktempo.com/adult-streaming-platform-swag-finance-will-issue-swag/
    SQUIRTS, Rewards Pool & FSE participation walkthrough: https://medium.com/@swag.finance/squirt-voting-rewards-pool-fse-participation-walkthrough-1dad83cb4348

  • Ethereum (ETH): What is it? The complete beginners guide

    Ethereum (ETH): What is it? The complete beginners guide

    What is Ethereum?

    Ethereum has been described as a revolutionary breakthrough- with claims that it may one day change how banking, gaming and even social media is operated. Since it was proposed in late 2013, Ethereum grew from an idea proposed by 21 year old college dropout to a platform that is now worth $20 Billion USD market capital. What is all this hype about – is Ethereum truly a groundbreaking network potentially worth trillions of dollars? In this article we’ll discuss the basics of Ethereum in plain English, along with examples of what makes Ethereum different from other networks.

    To explain Ethereum, we must first understand that most of the world operates in a centralized manner. For example, iPhones are mad by Apple, and Apple has complete control over what can and cannot go on the phone. Facebook is a social media platform, and the corporation can make decisions on who gets accounts Facebook accounts, what content gets shared and more important, who gets money (ie Facebook). Taking this example even further, we realize that the Banking world is also the same – central banks have the power to make critical decisions and benefit from the traditional centralized banking infrastructure.

    Ethereum offers an alternative to this – instead of trusting a central party such as Apple, Facebook or JP Morgan Chase, we can trust in each other. Instead of centralization, Ethereum offers a solution where we can go in a completely new direction – towards decentralization.

    What is Decentralization

    The concept of trusting each other was previously impossible without the advent of a few cryptographic technologies. After all, you wouldn’t go on the street and randomly trust a stranger with $1000. Nor would you want to trust a stranger with your social media information, or running your iPhone.

    Ethereum Network

    Once a program is deployed to the Ethereum network, computers also known as nodes will ensure it is executed exactly the way it is intended. Ethereum refers to the the infrastructure for running smart contracts, dApps, and tokens worldwide. It is commonly mistaken for the currency, Ether, which is the native currency on the Ethereum network. To perform actions such making a transaction on Ethereum, Ether (ETH) is needed.

    Decentralized Platform

    Ethereum is a decentralized smart contract platform the runs decantralized applications (Dapps) and decentralized finance (DeFi). The vision behind Ethereum was to improve upon Bitcoin by allowing for the execution of a full range of code – via the turing-complete programming language Solidity. Ethereum is currently used to create tokens, such as Basic Attention Token ($BAT), creating digital collectible items (ERC 1155) and decentralized finance (MakerDAO). On the Ethereum network, the currency Ether (ETH) is used as a form of value transfer and to purchase “gas” required to power smart contracts.

    Ethereum is an open-source platform for building and deploying decentralised applications i.e. dApps. Its native currency, Ether (ETH) serves as “gas” for running computations and transactions for dApps.

    Main features of Ethereum

    Ethereum 2
    Ethereum 2
    • Decentralised: No one party has majority control over the Ethereum network’s computing power.
    • Ether is a cryptocurrency: It can be used as “gas” to power dApps and is a store of value.
    • Automatic: Processes on the network can be executed without human intervention.
    • Public: It is accessible by anyone with a computer and internet connection.

    What are dApps?

    Users can build and run decentralised applications (dApps) on the network. They serve some particular purpose to its users and must have these common features:

    1. Open source: The dApp’s source code must be publicly available. Changes to the source code require agreement by a majority of users.
    2. Decentralized: Records of how the dApp were used are stored on a public blockchain. This blockchain is not subject to any controlling entity.
    3. Incentivized: dApps must use and provide its unique tokens or digital assets to users as a reward for their contribution.
    4. Protocol: The community of users must agree on a cryptographic algorithm to show proof of value. Ethereum is currently using Proof of Work as its distributed consensus system. In future, this will change to Proof of Stake (PoS). Learn more about Proof of Stake.

    Examples of dApps include:

    • Enjin: a suite of products for creating, storing trading and integrating blockchain-based in-game assets. Learn more about Enjin here.
    • Bancor: a token exchange.
    Enjin coin ecosystem
    Enjin coin ecosystem-running on Ethereum

    Future of Ethereum

    Ethereum’s latest upgrade, “Constantinople” was launched on 28th February 2019.

    The next upgrade “Istanbul” is tentatively scheduled for 16th October 2019. It will have several updates. These include a new Proof of Work Algorithm designed to close the efficiency gap available to specialised ASIC miners.

    Click here for a list of the upgrades under the Istanbul upgrade.

    The ecosystem will gear up towards “Ethereum 2.0”- known as “Serenity”. Its major update will be a shift from Proof of Work to Proof of Stake.

    Learn about how Ethereum’s shift to Proof of Stake and how this will affect users.

  • Proof of Stake explained

    Proof of Stake explained

    Proof of stake (PoS) is a consensus mechanism introduced in 2011 to improve upon the current most popular algorithm in use – Proof of Work (PoW). The main advantage of Proof of Stake two-fold it improves the speed of the Blockchain and also reduces the amount of electrical waste. Instead of consuming vasts amounts of computational power to “mine” for cryptocurrencies, Proof of Stake elects stakeholders to validate transactions. This election processes depends on the amount of cryptocurrency held by a node, hence the name Proof of Stake.

    What is Proof of Stake

    To truly understand PoS it is easier if we also explain the current system being used by Ethereum, and that is proof of work (Ethereum Mining). So basically when Ethereum is transferred, miners group that up into a ledger called a block chain and to do this they have to solve a puzzle. In creating this blockchain, a lot of computational power is also used. The amount of reward you get for creating a blockchain is a transaction reward. However, this depends on how much work you ie. how fast you can calculate and solve the puzzle.

    So this is all going to go away once proof of stake comes along. With proof of stake, you don’t actually solve any puzzles. You remove the puzzle solving element from the system and thus change the way the reward is distributed. So instead of proving how fast you can calculate with hashrate, you need to prove how much Ethereum you own. You do this with something called a master node. When you create a master node, you have to lock up a certain amount of Ethereum to prove that you have it and rewards are distributed according to how much proof of stake you have. One can create multiple master nodes with a lot of Ethereum inside and you’ll earn more through this method.

    Will Ethereum adopt Proof of Stake?

    So you might have heard that Ethereum is considering changing its distributed consensus system to something called proof of stake. Here, we will try to explain what this is as well as how it may affect you.

    So you might have heard that Ethereum is considering changing its distributed consensus system to something called proof of stake. Here, we will try to explain what this is as well as how it may affect you.

    How does this affect me?

    So that’s going to be extremely interesting for everyone. We’ve seen proof of stake currencies before. Dash is one example where 50% of the rewards is done by mining and the other 50% is done by proof of stake. And there is PIVX which is 100% proof of stake. The advantage of proof of stake is huge. One benefit is that you no longer have to do the calculations which mean you save a lot of computational power. Another one is that you actually lock up Ethereum. By locking up Ethereum you effectively create more scarcity which means the price should go up.

    So hopefully, it’s going to happen sometime this year. To do so, the people in charge of Ethereum have to make sure the code is ready and stable. And they also have to make sure they have the support of the miners. That’s going to be an interesting thing to see in the coming months because if the miners don’t support this move then what can happen is that it might break up Ethereum again just like last year.

    But there are mechanisms to help along this process. Ethereum actually has kind of a ‘time bomb’ that would blow up if the switch is not made. The switch has always been planned and it’s in a sense been hard coded to happen sometime so that’s kind of interesting to see how this will progress.

    Miners also do not need to worry they will be without a job. There are other currencies that can be mined with the current hardware. For example, if you use AMD GPUs, you can start mining Zcash which is also extremely profitable right now. So I do see this as being very exciting for everyone.