The birth of many Ethereum based tokens is the result of the open-source technology. Here are 7 noteworthy coins that run on the Ethereum blockchain.
The name Ethereum is just as powerful as Bitcoin itself. This coin was created in 2013 by Vitalik Buterin. The crowdfunding of this coin started in 2014, and finally on 30 July 2015, the network went live. Ethereum is considered more versatile than Bitcoin. The main reason is that Ethereum is an open-source technology, which means anyone can create new applications with endless possibilities on it. Because of that, a lot of tokens run on the Ethereum blockchain.
Understanding Ethereum Blockchain
A blockchain is a public database that is updated and shares across many computers within the network, you can say it's like the big book of crypto trading. The term 'block' here refers to the data being stored in consecutive groups. When you send an ETH to other users, the transaction data needs to be added to the block for the transactions to be successful. Each block cryptographically references its parent or in other words, gets chained together.
The computers in the network are called nodes. The nodes ensure that everyone in the blockchain receives the same data. To achieve this, the blockchain needs a consensus mechanism. Ethereum uses a proof-of-work consensus in its blockchain. That means everyone who wishes to add a new block should solve a difficult puzzle that requires a lot of computing power. This complex process is called mining.
See Also: How to Mine Ethereum in 3 Different Ways
Ethereum managed to achieve a groundbreaking achievement by building a global computer network that links users to a marketplace of decentralized applications (dApps) with better efficiency, security, and user control through a combination of features like a smart contract. The dApps were built to run without any downtime, fraud, control, or interference from any third party.
Furthermore, the Ethereum blockchain (ERC-20) is permissionless, which means it allows for the creation and development of applications without oversight from a central authority. That also means anyone can create a space for experimentation. Because of its versatility, Ethereum is used for a lot of innovative applications in various fields, such as finance, web browsing, gaming, advertising, and more importantly, other cryptocurrencies. In fact, Ethereum based tokens have been flooding the market in recent years. Among all of them, here are the most popular coins that you need to know:
1. Basic Attention Token (BAT)
BAT or Basic Attention Token is an Ethereum based token that was created for the digital advertising industry. The main idea of BAT is to pay publishers for their content and users for their attention. Because of this, BAT users can use the platform to buy a variety of advertising services. Nowadays, BAT is considered one of the most recognizable tokens in the modern economy.
BAT decentralized web has several utilities as a search engine, e-commerce, as well as content pinning and file sharing with IPFS. It has its own wallet called Brave Wallet that uses mass adoption of crypto and DeFi as its foundations. Users can buy crypto using credit, debit cards, as well as other crypto-assets. The Brave wallet can manage fiat and crypto payment options on desktop and mobile. Right now, this Ethereum based token market cap has reached $892.03 million.
2. Bancor (BNT)
Another Ethereum based token that is worth mentioning is Bancor (BNT). Bancor is the first decentralized trading protocol that aims to empower traders, liquidity providers, and developers to pen a financial marketplace that everyone can enter. Bancor also allows users to create new cryptocurrencies. Interestingly, these 'smart tokens' can hold or trade against reserve tokens.
Each new liquid smart token can establish a price on its own, which means the tokens are their own market makers. They can provide liquidity to holders of other currencies, so it solves the liquidity problem for smaller tokens and reduces dependency by eliminating the need for crypto middlemen in everyday trading. For this particular reason, some might argue that Bancor is one of the most exciting Ethereum based tokens out there. BNT's market cap now is $783.06 million.
3. OmiseGO (OMG)
OmiseGo or OMG is an Ethereum based token with a Proof-of-Stake consensus protocol. This token was created by a company called Omise, founded by Jun Hasegawa and Donnie Harinsut. When it first launched in Juli 2017, OMG was valued at $0.5. The market cap continued rising and in September 2017, it reached $12 per token. Some even predict that OMG will reach $150-$200 per token. The market cap now is $1.30 billion.
OMG claims to provide fast and affordable transaction services. It allows transactions without using a platform exchange by granting the users the ability to transfer money within the blockchain. Furthermore, OMG enables users to invest from fiat to crypto or crypto to crypto.
4. Status (SNT)
Status is an Ethereum based token that is entirely open source and made by contributors around the world. It is a decentralized messaging app modeled after China's most popular chatting platform WeChat. They aim to be a secure communication tool that upholds human rights on beliefs in protecting the right to private, secure conversations.
SNT is an ERC-20 token that can be used to access and power decentralized services in the status network and application. They choose Ethereum because they believe that this blockchain can push the token to maximize its utility. SNT owns a community that provides borderless, peer-to-peer, and fiat-to-crypto teller networks. This allows stakeholders to find nearby users to exchange cash for digital assets and currency. SNT's market cap today has reached $269 million.
MIMO is a decentralized stablecoins that runs on Ethereum Blockchain. To use Mimo, traders will need an ERC-20 wallet, as well as some wETH, wBTC, or USDC. Mimo strives to bridge the world of DeFi and the regulated financial institutions by offering a stablecoin platform with loans and savings that is currently under development. The lending platform allows traders to mint PAR, which is a stablecoin pegged to the Euro.
Mimo DeFi allows users to mint without spending any of their digital assets. Mimo has evolved to a community governance model where MIMO token holders can participate through on-chain voting. This ensures proper distribution of governance among holders.
6. Augur (REP)
Augur is a decentralized prediction market platform that was created by Forecast Foundation in 2014. The crowdfunding of this project started in August 2015, while the project finally launched in July 2018. It is a peer-to-peer decentralized exchange that allows any user to create a prediction on any topics such as elections, markets, and many more.
REP and REPv2 are Ethereum based tokens that are native to Augur. To receive a portion of the market fees, the holders must perform works by staking their coins on a correct outcome. Augur's market cap today is $128 million.
7. Ox (ZRX)
Ox in an open protocol that runs on Ethereum blockchain. This protocol allows investors to use decentralized exchange through smart contracts. It aims to solve the issue of slow liquidity in exchange platforms. As a self-sustaining dApp, there is no central body extracting fees from Ox's users, which makes it less likely to be hacked. Today, the market cap of this Ethereum based token has reached $707 million.
The popularity of cryptocurrency has lead to the creation of many coins and tokens, of which plenty of them run on the Ethereum blockchain. There's no doubt that more and more Ethereum based tokens would emerge in the future. But it only means you have to be more careful in selecting which token has a good prospect so you don't end up investing in bad ICOs. For a learning purpose, you probably need to take some ideas from 7 successful ICOs that aren't scams.