What is Aeternity?
Aeternity is a blockchain project aims to build an environment with a transparent governance which uses efficient and globally scalable smart contracts and decentralized applications (dApps).
The company ended their ICO campaign successfully in 2017 managing to raise a total of $24m for their AE token. In the last quarter of the same year, they launched on testnet.
Aeternity is trying to provide a solution to the issue of smart contract scalability. This is a problem of great relevance and concern seeing as there have been traffic problems with more established smart contract tokens such as Ethereum.
The Aeternity token (AE) was launched in 2017, being initially based on the ERC-20 standard token. This is because it was still in the testnet phase. When the mainnet will be launched, it will be switched to Aeternity native tokens.
AE will be the utility token used for the smart contracts. All of the contracts will be settled in AE and they will also be used as payment for network transaction fees. This is similar to how ETH is used in the Ethereum ecosystem.
The token is currently ranked at 48th in market cap rank. The token is currently priced at $0.377279, having a market cap of $87,913,765.
So What Makes AE so Special?
Decentralized Oracles Machine
By integrating this machine into Aeternity’s system, outsourced or real-world data is imported to be used in smart contracts. In the Aeternity ecosystem, these decentralized Oracles will make sure that the data used in the calculations of the smart contracts is tamperproof. Oracles are beneficial for events such as prediction markets, betting, and other defined results.
Aeternity makes use of prediction markets for various verification and voting purposes that occur within the platform.
Aeternity uses state channels to transfer smart contracts off-chain to enforce privacy as only the two parties involved in the transaction are able to view the information and operations of the contract. The only time that these state channels will connect with the Aeternity blockchain is when a settlement or any sort of disagreement occurs between the smart contract participants.
In addition to being private, these smart contract settlements are executed at fast speed. This is because they take place off a chain and they are not slowed down due to other contracts that are being executed.
This feature enables the creation of an identity which users can also own on the Aeternity network. This created identity can be used on outside Aeternity network on other places on the web.
The Aeternity blockchain uses a hybrid of Proof of Work (PoW) and Proof of Stake (PoS) consensus algorithms.
More precisely, the miners will be able to mine blocks and verify transactions similar to how Bitcoin and Ethereum are mined. However, Aeternity has also implemented its own version called the “Cuckoo cycle” which is a new graph-theoretic PoW algorithm.
Mining requires RAM, and it uses less energy which makes it appealing to miners that are looking to use the hardware they own instead of buying specific machines. This will, in turn, generate more security, lower chain mining costs, and will attract more people that are looking to mine without having to invest large sums.
The two consensus models combine scalable memory requirements with instant verifiability. This will incentivize the use of devices with dynamic RAM such as mobile devices. This means that participants will not be required to own or buy powerful and expensive mining rigs in order to mine AE.
With regards to governance and development decisions, Aeternity will employ a delegated proof of stake (dPoS) system for voting. The votes will be based on how much AE tokens the voters hold.
While the Aeternity project attempts to bring solutions to some of the most important issues the blockchain industry is currently experiencing, it remains to be seen what they will achieve once their mainnet will be online.