Aeternity is an open-source blockchain based distributed computing and digital asset platform built on Ethereum blockchain. Its primary goal is to improve the existing cryptocurrency universe that will deliver unmatched efficiency through transparent governance process and global scalability.
The token symbol for Aeternity is AE, and the token is used to pay fees for the resources utilized on the network.
The existing blockchain ecosystem is plagued with issues of scalability, safety, and availability of cheap access to real-world data of existing smart contract platforms. Aeternity has listed three existing core problem which is restricting the blockchain technology attain its full potential.
State Channels: State Channels are designed to increase privacy and scalability. It provides an alternative approach in the blockchain architecture that removes the necessity to store all the information on-chain by storing information in state channels (off-chain). It suggests to settle and store only those information on the blockchain which has got some economic results on the information exchanged or fallback in case of any dispute. This helps in increasing scalability as it keeps the blockchain light and also keeps the transactions independent to be processed parallelly.
Decentralized Oracles: Most of the events in this world depend on the outcome of certain other events which is referred to as oracles. For example Election results, government policies or prices of the commodity have a large impact on many business applications or in the insurance sector. Aeternity's Oracles connects real-world public data with smart contracts making it a fully decentralized structure and also with other blockchains, oracles are typically a single point of failure.
Mining and Governance
The consensus in the Aeternity blockchain is achieved through Proof-of-Work (PoW) consensus mechanism leveraging the Cuckoo Cycle Algorithm which is more energy efficient and encourages the development of better dynamic RAM chips. Thus miners can efficiently mine AE coins using low-power devices such as smartphones, tablets, and laptop achieving decentralization and geographical distribution of mining power.
The existing public blockchains often lack consensus, whenever a system upgrade is proposed through the hard fork or even a small system upgrade is a very difficult task in the existing system. AE coin holders participate in the governance process on aeternity blockchain via voting, weighted by the amount of token held by the user. The governance can be used for small system updates like from block size to overwriting faulty code.
Privacy: For businesses, privacy is the most crucial factor and with Aeternity blockchain, transactions are stored off-chain or not recorded in public blockchain. Blockchain is only used in case of any disagreement.
Security: Aeternity provides a state-of-the-art cryptographic datastructures with unparalleled decentralization ( oracles, mining, governance, storing information) that helps to enhance efficiency and also eliminates single-point-of-failure.
Low Cost: Aeternity leverages on state channels to store data off-chain which helps in improving scalability and also decentralized oracles enable a new form of monetization via its low-cost transactions.