The History of Ethereum & How It Works | Bite Size Blockchain | CertiK
Vitalik Buterin, Ethereum’s co-founder envisioned a new use for blockchain after Bitcoin, one that went broader for a larger set of applications. Ethereum was built on a neutral, open-access infrastructure, controlled by no central entity.
In 2013, Buterin released a white paper for Ethereum’s blockchain using the Turing complete programming language, based on Alan Turing’s concept of a Universal Turing machine, that allows any operation to be programmed within it.
Ethereum uses smart contracts which are programs that permit users to transact with each other according to a set of predetermined rules, removing the need for third-party enforcement. These smart contracts allow developers to self-build and publish contracts onto the blockchain.
Ethereum’s native currency, Ether, operates as a store of value for its users. Ethereum allows developers to build and distribute other cryptocurrencies using the same protocol as Ether.
Ethereum consists of only one public blockchain. Developers must create a modified clone of Ethereum to use the technology on a private blockchain.
Whilst cryptocurrency can be an exciting and rewarding investment, it is vital to have an understanding of web3 security and the measures needed to protect yourself and your fund.
Transparency and Accountability. CertiK KYC provides identity verification for project teams- to help investors make shrewder decisions based on an awareness of web3 security.
Smart Contract Audits. Check out the CertiK Security Leaderboard, which rates and ranks all onboarded projects in terms of their security.
Authentication Methods. In securing your accounts you should set up 2 Factor authentication so that a hacker would need to have both your password and the device to be able to access your account.
Hot and Cold Wallets. People will hold some of their funds on a cold wallet for security, and some on a hot wallet to allow for a smoother flow of funds.
2022 was a painful year for many in crypto. Alongside a broad market downturn, the year was punctuated by a number of major exploits, collapses, and bankruptcies.
With one major exception, the largest losses of user funds this year resulted from centralized platforms going insolvent, as falling asset prices exposed their unsustainable business practices.
The spark that ignited this fire was also the exception to the trend. When Terra’s algorithmic stablecoin lost its peg in May, the collapse came swiftly. In a matter of days, $45 billion of value was wiped from the market capitalization of TerraUSD and its reserve asset: LUNA.
This all occurred on-chain. It was a spectacularly visible collapse. What wasn’t so visible was the exposure that major centralized organizations had to the Terra ecosystem.
Unsecured loans, opaque use of customer funds, and many allegations of outright fraud combined to create the perfect storm. Now that the dust has settled, at least for the moment, we can take stock of the major players that were wiped out over the course of 2022.
With many billions of dollars now locked up in bankruptcy proceedings, the scale of losses from centralized crypto firms dwarfs the sum lost from decentralized protocols in 2022.
But that doesn’t mean that all is well in the world of DeFi. 2022 has seen approximately $3 billion lost from Web3 platforms, the worst year on record.
Web3 offers fundamental solutions to the underlying causes of centralized meltdowns. Real-time proof of solvency, on-chain transparency, and open-source applications combine to create a free and fair ecosystem. Centralized organizations that do not incorporate these values cannot legitimately be called crypto companies, they’re part of the same old system that Web3 is replacing.
On the one hand, the industry seems to be learning the hard lessons of this year. It’s heartening to see a number of major exchanges adopting cryptographic proof of reserves, which are one way to bring the best of Web3 to centralized platforms.
On the other hand, there’s still a lot of work to be done. Tto deliver on its fundamental promise, Web3 needs to address its security problem. It’s not enough to just lose less money than centralized finance, not when the tally is still in the billions of dollars. Web3 needs to be a safe, secure place for everyone to transact.
In this report, we go through some of the year’s biggest losses and outline the steps Web3 needs to take to reach its revolutionary potential.