In today’s Initial Coin Offering (ICO) craze, it can be hard keeping track of new cryptocurrency projects as millions and millions of dollars flow into these campaigns every week. However, most of the recent crowdfunding campaigns that have been launched in the cryptocurrency space are now making use of other platforms that can accommodate their appcoins, assets and tokens. Among these are the Waves Platform, with projects like MobileGO, EncryptoTel and ZrCoin and there is also Ethereum, that houses the Augur, Golem Network, Gnosis and many other projects.
Currently sitting with a marketcap of roughly $10 billion, Ethereum is without a question the most popular of these platforms, allowing projects to develop and deploy intricate smart contract systems that form decentralized applications or dApps. And while most projects have taken advantage of these properties to develop their dApps and issue tokens through crowdfunding campaigns, Æternity is taking another route.
Launching its crowdfunding campaign in 10 days, Æternity is a smart contract platform written in Erlang that may give Ethereum a run for its money, in certain aspects, by bringing along new features and addressing some of Ethereum’s most pressing problems like scalability. The crowdfunding campaign will last three weeks. – Learn more about the ICO.
The platform is not meant to be a general as Ethereum is, instead Æternity will focus on developing certain key aspects of the network to ensure that it stays healthy. These include governance, scalability, scripting safety and cheaper access to real world data. By improving these aspects, Æternity positions itself as a platform that can do some (not all) of the things that Ethereum can with more efficiency.
Æternity will use a hybrid Proof-of-Work and Proof-of-Stake consensus mechanism and its algorithm will make it possible to mine with a smartphone without losing considerable performance in PoW. Æternity also changed the way that outside information is imported through the use of on chain oracles which use the same consensus, which means that a second consensus layer does not need to be written in the smart contract, something that is currently necessary with other smart contract platforms.
However, Æternity’s main strength is in its use of state channels which help it achieve scalability and scripting safety. A state channel is basically a two-way channel in which users communicate transactions to each other. State Channels have a predetermined lifespan that can be configured by time or amount of tokens exchanged.
These channels are private and off-chain. They are then introduced to the blockchain for settlement, where the tokens (Aeons) will be distributed according to the outcome of the channel. So, if two users open a channel and send Aeon to each other, they can then close the channel and introduce the transactions to the blockchain, where only the final outcome will be registered.
The concept of state channels, which has been talked about for some time now but will be implemented in Æternity for the first time, brings many advantages especially when it comes to scaling as redundant information is kept out of the blockchain, keeping its size under check. They also allow transaction within these channels to be instant and completely private.
Ofcourse, the use of state channels also bring some disadvantages, as they are unfit for applications that require a custom state to be under consensus (like DAOs). However, Æternity places itself as a platform that is meant for specific applications to be built in a much more efficient way llike toll APIs (where users pay for every call to the API), insured crowdfunding, cross-chain atomic swaps, prediction markets and more.