Why does Ethereum consume (why can Ethereum fire)

Why Ethereum Consumes Editor’s Note: This article is from Ethereum enthusiasts (ID: ethfans), by Tim Beiko, translator&proofreader: Min Min&A Jian; Original link: 0x137cd7a5f0e1b2c6fe4ce9da3bb8c49debaff29c31a6c92 When we create an application on the blockchain, we must use our software to manage and fund these activities – this not only affects our smart contracts, but also puts other participants in the system at risk of burden and loss. However, if you don’t have enough money to run nodes in the network, your computer may be forced to shut down or shut down the entire network for some reason until they become devices used by people – this is one of the reasons why Ethereum needs to pay miners. 1. How to calculate blocks? If we add transactions to the blockchain for processing, we can only execute tens of thousands of transactions per minute for some time. Due to the fixed and immutable nature of blocks, we need to consume a significant amount of gas costs to maintain each block. To verify transactions, users only need to download a bunch of files, then connect to the public blockchain with their wallet, and store ETH in it

So let’s take a look at the utilization of resources on the network:

– As blockchain is increasingly used for Proof of work chain, it will gradually become more centralized Although many people believe that the internet has great advantages but are unwilling to do so, it is a very difficult thing for most people. For example, the Bitcoin network spends about $2 billion a day to process more than 5 billion transactions, and other Cryptocurrency exchange have also been using these transactions as a medium of exchange, even those that have stopped accepting Ethernet coins. In addition, according to the data of Blockchain. com, the current total market value is estimated to be only about $4 billion, while the circulation supply of Ethereum is only 21 million, far less than Bitcoin. 2. Does Ethereum consume Gas? A technology that Ethereum can measure. When a new application starts, Ethereum needs to burn a part of any value it has. This process may be faster than a typical email sender

– Ethereum uses the concept of “sustainable energy” to reward. The main purpose of Ethereum to consume gas is to increase the network capacity of Ethereum It can improve efficiency by reducing the use of gas

Why Ethereum can fire

At the end of 2017, the price of Ethereum reached about $400, and by the beginning of 2018, its price had nearly doubled. Although there was not much enthusiasm in the market at that time to hype up Bitcoin or other digital currencies, it did not mean that ETH could become a means of storing value. It was only a part of the blockchain network and could not fully solve the problems and problems people faced with blockchain networks. Why can it be popular? Let’s see why Ethereum is so popular: First, Ethereum is the most popular encryption asset at present; 2、 Ethereum 2.0 upgrade is in progress; Third, the main components of the Ethereum ecosystem, most of which are DeFi applications, such as MakerDAO, Compound, etc; Fourth, the launch of Ethereum 2.0 will bring more functions; Fifth, in the 2020 bull market, market sentiment gradually returned to the rational stage; Sixth, the trading volume of Ethereum has continued to increase since this year, with the average daily trading volume exceeding US $1 billion.