Welcome back to the next part of the series for digital leaders. After reading up on the introduction to blockchain, you may be thinking:
“Blockchain and Cryptocurrencies, another way to send and receive money, so what?”
Previously, we mentioned that Bitcoin was an application of blockchain and now we look at the assumption that all Blockchain is just cryptocurrency:
“[Blockchain] is to Bitcoin, what the internet is to email. A big electronic system, on top of which you can build applications. Currency is just one.” Sally Davies, FT Technology Reporter
Well, there are more applications for blockchain which are beneficial to everyone, especially those in developing countries. In particular, we will dissect Ethereum, the first decentralised application platform or “dApp”; just like you build an application on your smartphone, Ethereum allows other blockchain projects to be built on the Ethereum platform with ease.
Now, this sparks the new definition of the Crypto “Token”. A token is held within a Cryptographically designed blockchain, which can be used within its ecosystem; Ethereum allows you to use its token for utilities such as:
Ethereum has an additional layer to its network in the form of smart contracts. In order to use these smart contracts, the participants of the network need fuel to power them. Gas has a flexible unit of measurement depending on how soon you require your transaction to be processed. There is a good analogy provided by the MyEtherWallet website:
You can think of the
gas limit like the amount of litres/gallons/units of gas for a car. You can think of the
gas price as the cost of that litre/gallon/unit of gas.
- With a car, it’s
- With Ethereum, it’s
20 GWEI (price)per
To fill up your “tank”, it takes…
21000 units of gasat
Therefore, the total TX fee will be 0.00042 Ether.
Sending tokens will typically take
~50000 gas to
~100000 gas, so the total TX fee increases to
0.001 ETH - 0.002 ETH.
The role of Gas in the smart contract is to power each line of code, of which, packages are already publicly available for use across the network; Members of the network build packages or make their inputs freely available such that others can adapt and use it for their own work.