Ethereum (ETH) Essay

Published: 2021-07-16 20:40:05
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Category: Laws and International Laws

Type of paper: Essay

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Ethereum (ETH) is a decentralized platforms that runs smart contracts. The smaett contracts a applications that are progrmmed to run as expected and withot experiencing downtime, censorship, fraudor third part interference. The smart contrats run oon custome built blockchain, which is an enormously shared global infrastructure that can move around and represebt ownership of property. This characteristics aids the develpers to perform various activities such as creating markets, storing registries of debts, moving funds in accordance with instructions fgiven along in the past, and other things that are not yet invented. All this activities are known to work without middleman or counterparty risk. The data below is extracted from a Ethereum blockchain and iusd to plot a scatter graph of the txvolume against the date. The txVolume represents the sum of transactiom output of ethereum mined in a single day. Since there is difficulty and imprecision when estimating and measuring change, change is not included in the output of ethereum.The graph presents the volume of Ethereum that has been transacted from 10th August 2015 till today. There was a steady slow growth in the volume of Ethereum transacted up until around 6th March 2017 where there was a sudden rise in the volume of Ethereum transacted. On 14th January 2018, the highest volume transaction was recorded with a fall to low points until the first days April, 2018. The exponential trend line shows a possible rise in the volume of Ethereum in the future markets.The problem with extracting transaction volumes is the difficulty that arises when trying to extract this volumes from the blockchains directly. This difficulty arises due to the improper maintenance of the balances of users, but focuses on the outputs that were spent and unspent. For example, when a user wishes to send 7 ETH to another user and possesses 9 ETH in his/her wallet, during the transaction it is the total 9 ETH that recorded as the input and the two ETH returned as change. Hence, if the addresses used are both new, it is improbable to know the difference the change and the recipient address. In the above transaction, only one address is known and therefore, it is hard to know the change address. Hence, the estimate of would be the sum of the entire ETH instead of the sum that was intended. The results is nervousness among the users of the cryptocurrency.Wallet such as the blockchain.info has access to transaction information of its users and therefore, can extrapolate such tendencies to blockchain at large. These extrapolations is probably based on some estimations used to arrive a number that is thought to be representative of the total value of the transaction of the Ethereum in a single day. Most wallets do not release data that is complete, making this estimation a difficult task. Hence, estimating change output is impossible. Introducing the plasma system is a great step towards achieving the scalability of Ethereum by making use of small contracts that will stay in contact with the main blockchain. Plasma system is described as a system of small contracts use to raise computation potential of the Ethereum blockchain. The main advantage that the plasma system offers is the reduced amount of data to be processed by the clients. Finally, Ethereum offers the promise of decentralized applications and is hailed as the “next internet”. This can be said to be cause of the expected rise in the volume of Ethereum mining as depicted by the exponential trendline.

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