What Is Ergo Crypto: Combining the Best of Bitcoin & Ethereum
Choosing the right cryptocurrency for your wallet can be difficult with hundreds of options to choose from. One project worth considering is Ergo, which was specifically designed to bridge the gap between Ethereum and Bitcoin. Investors have shown great interest in this altcoin and the price is currently good. If you want to invest some of your money in ERG, you need to know the Ergo platform and its many features.
What is ergo?
Ergo is a sort of secure blockchain based on Decentralized Finance (DeFi). The goal is to combine the best features of Ethereum with those of Bitcoin.
The project features a Proof of Work (PoW), similar to the consensus protocol used by Bitcoin to ensure the security of its network and the availability of smart contracts for DeFi. Security features come from Bitcoin, while smart contracts and decentralized features come from Ethereum. If you want to mine Ergo tokens, this platform uses a protocol called “Autolykos”, which is essentially a modified version of the Bitcoin mining protocol.
History of the Ergo
Lead developer Alexander Chepurnoy created this crypto project. A blockchain veteran who developed cryptographic software, Chepurnoy has written and published numerous articles on blockchain technology over the years. Before founding Ergo, he worked as a researcher at IOHK, an engineering and research company best known for creating Cardano.
In 2019, he collaborated with fellow researcher Dmitri Meshkov at IOHK on the development of Ergo, which officially launched in early July 2019. When the project kicked off, Chepurnoy said it was created to deliver comprehensive smart contracts and many security features.
How does Ergo work?
Ergo works by combining the best features of Ethereum and Bitcoin. The platform is designed as a more efficient and secure financial contracts platform that offers extensive DeFi capabilities. Remember that “decentralized finance” refers to applications that remove centralized banks from financial transactions.
The platform’s mining model is similar to Bitcoin and allows for the creation and validation of new coins. However, the size of the computer is limited in mining, which means that large mining companies that consume a lot of coal are not developed.
The Ergo platform also exists as a programmable blockchain similar to Ethereum. Being programmable, the blockchain can host a variety of decentralized applications (DApps). Ergo offers this feature with no transaction fees.
Developing DApps on Ethereum is challenging as transaction fees vary based on current network congestion. This problem makes it virtually impossible to estimate development costs. By comparison, developers know exactly how much they have to pay to develop an app on Ergo.
ErgoScript’s smart contract capabilities and smart contract language enable the creation of more complex and secure financial contracts, which the Ergo team believes are essential for the development of the DeFi industry in the coming years.
Each token hosted in a smart contract has an additional layer of security that specifies when the token can be used, who can use it, and what conditions must be met before it can be used.
ErgoScript simplifies the development of smart contracts with sigma protocols and lightweight nodes. Lightweight nodes don’t have to maintain the entire copy of the blockchain or run 24/7, reducing the need for the platform to use computing power and storage space. These features make the platform mobile-friendly.
Features of the Ergo platform
Ergo offers a number of features that make the platform a worthwhile investment. Along with the PoW model, Ergo also has no gas costs and a crowdfunding service known as ErgoRaffle. We will discuss the latter below.
Working model certificate
Ergo uses a PoW model to mine new coins and confirm transactions. As far as this consensus mechanism is concerned, any ERG mining can use multiple GPUs in one Ergo node. While the PoW model is efficient, it also consumes a lot of energy, which is Bitcoin’s biggest problem.
However, Ergo has somewhat mitigated this problem with its Autolykos mining algorithm. This algorithm can withstand ASICs and large mining pools, making the PoW model more efficient. In fact, anyone who wants to mine Ergo can do so with a computer and a standard graphics card.
The intention is for Ergo to have the full range ready within 26 years of first going online in 2019, in other words by 2045. Ergo token mining is simple and straightforward. All that is required for mining is to specify a default node, which is possible if your graphics card has at least 4GB of VRAM. However, 8GB of VRAM is recommended.
Since Ergo is based on a PoW consensus mechanism, miners can use multiple GPUs on one node. It is also possible to take advantage of mining pools. However, the Ergo team recommends that miners only choose small pools.
There are currently four major wallet types that are fully supported. Two of them – ViaWallet and Yoroi – are web-based. Only Yoroi supports native sources. The official Ergo Mobile Wallet is probably the best as it offers multisig functionality as well as scripting and support for native resources. The mobile version of the wallet is available on Google Play.
No gas costs
While Ergo is a programmable blockchain that allows for decentralized application development, the platform does not collect transaction fees. This feature has made Ergo popular among developers building DApps.
As we said earlier, Ergo supports the creation of DApps that extend the functionality of the platform. One DApp built on the Ergo platform is SigmaUSD, which was developed using the AgeUSD protocol and is considered a decentralized stablecoin.
ErgoMixer is a non-interactive and non-standard cryptomixer that effectively protects each user’s privacy by sending and receiving bulk tokens before mixing. With this approach, tracing transactions is virtually impossible. Another DA application built with Ergo is Ergo Auction House, an NFT marketplace with hundreds of auctions.
Previously known as ErgoDEX, Spectrum is a decentralized hub based on the Ergo platform. However, that’s not all: Spectrum also wants to be an original cross-chain ecosystem with new offerings. This special DEX allows users to transfer their liquidity between Cardano and Ergo. Remember, Spectrum uses the EUTXO model to ensure liquidity sharing between these platforms.
The spectrum is created using the Automatic Market Maker (AMM) protocol and the order book protocol. When a user completes a trade on this exchange, incentives are offered. Various ecosystem users include user interface (UI) providers, liquidity providers, traders, miners, and off-chain law enforcement.