Decentralization Journey: Welcome to the "Metropolis" Ethereum

Welcome to Ethereum, a bustling virtual metropolis, a fully functional digital civilization world. Here you can transact, sign contracts, develop applications, and even buy and sell art, but there is no real-world physical entity. Ethereum, developed by Vitalik Buterin in 2015, is much more advanced than Bitcoin's original structure. Up to now, Ethereum is somewhat similar to ancient Rome. **Its "Turing completeness" means that as long as there are enough resources and correct instructions, it can solve any computing problem. This is why Ethereum developed its unique programming language The foundation of "Solidity", enabling developers to build advanced applications on top of their blockchains. ** In this article, we will walk into this bustling digital metropolis to understand its unique architecture and future blueprint.

Foundation of Ethereum City

Like the infrastructure that underpins a city, the foundation of an Ethereum city is its blockchain technology. Think of the blockchain as a city’s network of roads, connecting everything within Ethereum. This infrastructure is open, transparent and decentralized - it belongs to all residents, not to a single entity. **In Ethereum City, the native currency Ether (“ETH”) is similar to the city’s standard currency. **ETH is used for transactions, such as buying goods or paying for services. Miners (hereafter referred to as: block producers) earn it by validating transactions, similar to workers earning wages. **Just as laws are essential to maintaining order in cities, smart contracts facilitate transactions in Ethereum City. **Like an impartial judge, these digital contracts are automatically executed when conditions are met, without the need for a middleman. These contracts are stored on the decentralized Ethereum blockchain, ensuring transparency and immutability, making them more trustworthy. **How does Ethereum City keep running? ** **Just as a city needs workers to keep the system running, Ethereum relies on a specialized workforce known as block producers. **However, these block producers are not digging precious minerals underground, they are computational workers who verify transactions and add them to the Ethereum blockchain. Whenever a citizen of Ethereum City makes a transaction, such as sending ETH or interacting with a smart contract, block producers do their work. They verify these transactions and make sure everything goes according to plan. ** Block producers need to be paid for their services in keeping the Ethereum network secure, just as all workers need to be paid. ** This is allocated to them from the gas fee paid when executing the transaction. These gas fees are paid in ETH. While simple transactions will be cheaper relative to more complex ones, the gas fees to be paid will fluctuate based on prevailing network usage levels. During periods of high network usage, gas prices can rise dramatically as people race to have their transactions included in the next block, which we can compare to traffic jams in a physical city. **The work of these block producers is critical to the functioning of the city. They provide security to Ethereum by preventing fraudulent activity and maintaining order in the city. Like a city’s police or security personnel, block producers protect Ethereum from potential “bad actors.” ** Without block producers, Ethereum City would be vulnerable to attacks and misconduct, causing chaos and disruption.

Features of Ethereum City

1. DeFi: Financial District Just as a city's financial district hosts banks, investment firms, and insurance companies, decentralized finance ("DeFi") encompasses a range of financial applications, all built on Ethereum's blockchain. **However, unlike traditional financial systems, DeFi is governed by smart contracts without a central authority. **Below, we’ll explore some popular DeFi specific use cases: - Lending Platforms - These platforms replace the services of traditional banks, allowing users to lend directly to each other. These platforms leverage smart contracts to automate the lending process and enforce code terms without the need for cumbersome KYC (“know your customer”) processes. Popular lending platforms today include Aave and Compound. - DEX - These decentralized exchanges act as marketplaces, allowing users to trade digital assets directly with each other without intermediaries. These platforms aim to replace CEXs like Binance and Kraken, which are the crypto equivalents of NYSE, Nasdaq, and others. The currently popular DEXs include Uniswap and Balancer. 2.DAO: City Council In the Ethereum urban landscape, among myriad structures, there are organizations without any central authority, but decentralized ones, these are known as Decentralized Autonomous Organizations (“DAOs”). Like republics governing the physical world, DAOs operate based on rules encoded in smart contracts. **DAO members can make decisions by voting, and their weight is usually determined by the number of Tokens they hold, thus bringing democracy, transparency and autonomy to the forefront. ** DAOs can fundamentally change the way businesses operate, ensuring that all stakeholders have a voice and removing the need for a central control agency. This democratic, transparent approach to decision-making is a far cry from traditional hierarchical organizational structures, similar to how a republic differs from a monarchy. DAOs, like buildings in cities, can serve multiple purposes. They can be used to manage decentralized venture capital funds, where investment decisions are made by collective members. DAOs can also be used to manage decentralized networks and applications, and more. Some specific examples of DAOs include Apecoin DAO and BitDAO.

3. NFT: Unique Artifacts **Think about how a city can be home to unique artifacts, such as one-of-a-kind sculptures or rare historical documents in museums. In Ethereum City, these artifacts are transformed into NFTs. **Different from interchangeable or "substitutable" conventional Tokens such as ETH, NFTs are unique, and they all have their own characteristics. It's like having a painting that has only one original that can be reproduced, but the original will always have a unique value.

**These unique NFTs take advantage of the transparent and secure features of the Ethereum blockchain, and when bought or sold, the transaction is recorded on the Ethereum blockchain, much like a title deed to the City Records Office. **This blockchain record proves who owns the NFT, and since the blockchain is transparent and immutable, the ownership of the NFT is clear and indisputable, and it is this system that guarantees the uniqueness and source. NFTs can represent a variety of unique items or content. Digital art has been one of the most popular uses of NFTs, with artists creating digital artwork and selling it as NFTs. But the uses of NFTs go far beyond digital art. They can represent ownership of virtual real estate in the digital world, unique in-game items in video games, or even ownership of real world assets (RWA). It's like the variety of unique attractions and properties you can find in any city, each with its own story and value.

Ethereum city upgrade

**While like any metropolis, Ethereum City has inherent strengths and offerings, it also faces challenges - key among them being scalability. **As cities grow and more citizens join, current infrastructure struggles to process transactions quickly and cost-effectively. It's like a city dealing with traffic congestion due to population growth. Another challenge is the complexity of cities Just like new residents may find it difficult to adjust to a big city, new users often find it challenging to understand and use Ethereum. As Ethereum City continues to grow and welcome more citizens into its city, it is addressing these challenges to ensure a sustainable and inclusive future for all citizens, **Layer 2 Solutions (Layer2) are here to stay. **

1.Layer2 development The scalability of Ethereum City is similar to dealing with the traffic congestion of a physical city. Just as more roads or mass transit systems can help handle more cars or people, **Layer2 is like adding extra lanes or high-speed trains to Ethereum’s infrastructure to handle more transactions. **Layer2 sits on top of the Ethereum blockchain (Layer1) to process off-chain transactions. Only when users decide to make transactions on Layer 1, those transactions are added to the main Ethereum blockchain. It's like taking a fast, non-stop express train, stopping at the terminus only when needed. Layer 2 helps Ethereum City process more transactions faster and with lower fees. By removing transactions from the main blockchain, they reduce the load on the network and make it more efficient. This is similar to how express trains or highway bypasses can shorten travel times by avoiding busy city centers. Some Layer 2s can process hundreds or even thousands of transactions per second, far exceeding Ethereum's current capabilities. This increased capacity not only increases speed, but also reduces transaction fees, making it cheaper for citizens to interact within Ethereum City. **Ethereum City is developing and implementing various Layer2. **One of these is a "roll-up" which bundles or "roll-ups" many transactions into one, greatly increasing the capacity of the city. They are like a super-efficient public transit system, carrying many passengers at the same time; the other is a "state channel", which allows participants to exchange multiple transactions off-chain before the final state is settled on-chain, similar to what happens in a bar Set up tabs and pay the total bill at the end. At present, some of the better developments of Layer 2 include Arbitrum, Polygon and Optimism. These solutions are helping Ethereum City manage its growth and ensure it remains a thriving, efficient and inclusive digital metropolis. 2. Merge: PoW to PoS When Ethereum was created, it used a proof-of-work ("PoW") consensus mechanism to validate new transactions. While this was revolutionary at the time, it consumed a lot of energy and became an issue for ethereum's sustainability. To change this, the Ethereum Foundation successfully executed "the merge" in September 2022 to transition to a Proof-of-Stake ("PoS") consensus, one of the biggest advantages of which is to significantly reduce its energy consumption by approximately 99.95%, while still maintaining the security of the network. 3. Upgrade Blueprint Beyond the upgrades Ethereum has already undergone, the Ethereum Foundation still has a long way to go to achieve its ultimate goal. To achieve this goal, Vitalik proposed a series of upgrades, which also took the team on a multi-year upgrade journey:

The Surge: Scalability-Related Upgrades Through Rollups and Data Sharding The Scourge: Upgrades related to MEV's censorship resistance, decentralization and protocol risk The Verge: Upgrades Related to Easier Validation of Blocks The Purge: Upgrades related to reducing the computational cost of running a node and simplifying the protocol The Splurge: Other upgrades that don't fit into previous categories.

summary

When we end our tour of the digital city of Ethereum, we can see that it has developed from a crypto project to a bustling metropolis in the world of blockchain, and then with a solid foundation based on Turing completeness, Ethereum has attracted Countless developers and companies have built innovative applications and services on its platform. Like Rome, Ethereum was not built in a day. It continues to grow, with a dedicated developer community constantly working on improving its infrastructure, capacity, and security. The journey of Ethereum 2.0 and its PoS consensus mechanism, sharding and scaling solutions marks the beginning of a new era in the history of Ethereum, just as the transformation of Rome from a republic to an empire was a major event in its history. It’s worth noting, though, that we only scratched the surface when we toured the city of Ethereum. Just as Rome had centuries of history and culture, Ethereum has layers of complexity and innovation that are still being discovered and developed.

Original link: Original title: Decentralized Wonderland: Journey through Ethereum city Original Author: Hjsoh Compilation: Huo Huo

END

Previous post: zkSync gathered by the wool party, or live up to expectations and become the new leader of Ethereum Layer 2?

Recommended reading What are institutions in the crypto bear market still investing in? What layout to do? A new round of regulation may make the bear market worse. The biggest threat is SEC Chairman Gary Gensler? BRC-20 staged a roller coaster market, is the Bitcoin ecology a flash in the pan or is a bigger explosion brewing? Why is Crypto important? How blockchain and Ethereum are changing the world Will the former partner of Musk, from ChatGPT to WorldCoin, bring surprises to Web3?

『Disclaimer: This article is the author’s independent point of view and does not represent the standpoint of the vernacular blockchain. This content is only for popular science learning and communication among encryption enthusiasts. It does not constitute investment opinions or suggestions. Please treat it rationally, establish correct concepts, and increase risk awareness . The copyright of the article and the final interpretation right belong to Baihua Blockchain. 』

If you like it, please click "Looking"****?