Name: ERGO (ERG)
Max Supply: 97,739,925 ERGs (after 8 years)
Mining Algorithm: Autolykos
Block Time: 2 minutes
First Announced: May, 2017
What is Ergo?
Ergo a POW cryptocurrency aimed to develop and revolutionize blockchain technology. The Ergo Platform aims to develop and provide a platform for financial contracts on the blockchain. The Ergo Platform consists of the cryptocurrency Ergo, and ErgoScript, a scripting language used to develop contracts onto the Ergo blockchain.
ErgoScript is a scripting language designed by the Ergo development team. This programming language provides numerous benefits over the original Bitcoin Script. ErgoScript provides more functionality and flexibility to developers to develop applications onto of the Ergo ecosystem. Using ErgoScript, developers can specify under what conditions a coin can be used, including who and when can use it. This opens ErgoScript to be used for a myriad for applications. For a more in-depth and technical understanding of Ergo-Script, read the ErgoScript paper written by the development team, here.
Additionally, the Ergo cryptocurrency features several interesting features. Firstly, if ERGs are not moved and kept in the same state for 4 years, a miner will charge a “storage fee” for the kept Ergo. This fee is based on the amount of bytes kept in the same state. An estimation of nearly 4 million Bitcoins are out of circulation, according to a recent study by Chainalyis, a digital forensics firm. These Bitcoin are inaccessible due to lost private keys and wallets. Ergo’s storage fee gradually returns lost ERGs back into circulation. Furthermore, the storage fee provides additional income for miners once Ergo’s initial coin emission ends (~8 years).
Furthermore, the Ergo Platform functions as a platform for development. Like the Ethereum blockchain, the Ergo blockchain serves a platform on which applications can be developed on top of. Ergo’s dedication to decentralization is present within the blockchain. Miner consensus allows miners to modify certain parameters, such as block size and storage fee as the network grows. Miners are also able to soft-fork Ergo with changes suggested by the development team. The Ergo team also holds a treasury used to fund development, guaranteeing future development of the Ergo Platform.
Ergo uses a proof of work algorithm to confirm and process transactions on the Ergo blockchain. Learn more about what proof of work is and how it works, here. In short, transactions are confirmed and verified on the blockchain using a network of decentralized mining nodes. These nodes use computer hardware to solve mathematical puzzles, creating and adding new blocks to the blockchain. Proof of work algorithms maintain decentralization while providing a fair way to distribute newly minted cryptocurrencies.
What is Autolykos?
What makes Ergo unique is its mining algorithm. The Ergo blockchain uses Autolykos as its proof of work consensus algorithm. Unlike many other cryptocurrencies, Autolykos was developed by the Ergo team.
Autolykos was developed to be ASIC and pool resistant. ASIC miners are often unsuitable for the average miner. Learn more about ASIC miners here. In order to combat this, Autolykos’ memory requirement of 4-8 GB of memory per miner thwarts potential ASIC development plans as ASIC development is no longer viable at high memory requirements.
Autolykos’ pool resistance makes Autolykos truly unique. Individual miners without enough hash power to mine a block on their own, collectively pool their hash power together. These miners mine together as one entity, a mining pool. Mining pools distribute block rewards proportionally depending on the hashing power of the miner. The centralization created by mining pools, moves blockchains further away from decentralization. Autolykos preserves mining decentralization by eliminating mining pools altogether. This algorithm requires the miner to access the wallet’s private keys to mine. This means in order for multiple users to mine using a single entity, every miner needs to use the private key. Anyone with access to the private key can empty the wallet and steal the ERGs associated with that key.
Here is an analogy: If you share a phone with multiple people, every user will know the password and be able to use the phone without any restrictions. If they wish they are able to erase all the content and conduct malicious activities. If multiple miners decided to mine together as one node, each miner will have the public key allowing them to empty the ERGs from the wallet. Therefore, preventing pool formation as mining proceeds will be open to be stolen.
Why is Autolykos beneficial?
Autolykos offers more than traditional mining algorithms. The use of a unique algorithm prevents miners from renting out vast amounts of mining power from rental sites such as Nicehash. Nicehash allows users to rent the mining power of thousands of computers, directly conflicting with the core principal of decentralization. Additionally, Autolykos’ core fundamentals revolve around pool resistance. Mining pool resistance preserves decentralization, and the Autolykos algorithm is the first of its kind.
For a more in-depth understanding of how Autolykos works, the Autolykos paper written by Autolykos development team, is available here.
In order to increase usability, Ergo employs light clients. Running full network nodes require somewhat powerful hardware and needs to consistently store the whole blockchain. Running full nodes are impractical for every day people. Using light clients, regular users can join the Ergo network using low-powered hardware such as smart phones. Light clients offer the same level of security and nearly the same functionality as full nodes.
The Ergo blockchain supports NiPoPoW proofs. In short, NiPoPow proofs allow nodes to verify a transaction without having to sync or connect to the whole blockchain, as a full node does. Additionally, light clients provide an alternative to storing funds on an exchange or untrusted wallet as setting up full nodes are not viable for many. Furthermore, light clients result in greater decentralization as many more people will be running nodes and not relying on full nodes.
The Ergo platform is geared towards ease of finance. Using the Ergo Platform developers can deploy financial contracts. Using ErgoScipt these contracts can be very specific, specifying who and when can spend the coins. The Ergo Platform provides a secure and efficient way to execute financial contracts, opening up a variety of potential use cases. In short, Ergo builds upon smart contract technology, by allowing developers to develop even complex contracts than those on the Ethereum blockchain. Learn more about smart contracts here.
Furthermore, Ergo is not just a cryptocurrency, but a platform for blockchain developers. Ergo’s commitment to decentralization allows Ergo DApps (Decentralized Applications) to be implemented and deployed securely. Using ErgoScript, developers can develop powerful DApps that use the technology provided. The potential use cases are endless. You can view different potential use cases on the Ergo Forum, including the potential for an Interest-Free Loan Contract.
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