Who made Ergo crypto?

The lead developer behind the Ergo project is Alexander Chepurnoy.He is a blockchain veteran, having participated in Bitcoin’s development since 2011. Chepurnoy has co-authored and published multiple papers on blockchain technology, and is a degree holder from the Saint Petersburg National Research University (ITMO). Chepurnoy’s first big project was the NXT platform.

Together with Dmitry Meshkov, they embarked on the effort to create Ergo, launching the mainnet on July 1, 2019. Meshkov has a Ph.D. in physics and a similarly rich experience in software development. At the time of Ergo’s launch, Chepurnoy issued a statement clarifying what the ergo crypto is all about:

“We have developed an approach to smart contracts in line with Bitcoin’s original concept, but with small additions that potentially cover 99% of current use-cases. Ergo allows people to synchronise with the network by downloading less than a megabyte of data, reducing the process from potentially weeks to minutes and enabling it to take place on mobile devices – all with the same security as current third-party solutions.”

The Ergo team saw that both Bitcoin and Ethereum have considerable flaws. Ergo was born as a result of a motivation to address these issues. Like Bitcoin, Ergo (ERG) employs Proof-of-Work (PoW) consensus to secure its blockchain network. However, like Ethereum, Ergo is simultaneously a programmable blockchain capable of deploying smart contracts.

In both instances, Ergo appears to solve the downsides of Bitcoin and Ethereum:

• Instead of exerting high electricity requirements like Bitcoin to solve complex cryptographic equations, the ergo crypto uses a different mining algorithm. Dubbed Autolykos, it makes mining more energy-efficient because it creates a limit on both mining pools and specialized ASIC machines. This way, one can mine ergo with a commercial-grade GPU, just like in the old days.

• When it comes to Ergo’s Ethereum-like programmability, it has an advantage as it doesn’t have any gas fees, which is the cost users have to pay every time they make a transaction. Ethereum is notorious for having exorbitant gas fees the more traffic its network onboards. Instead, ergo has very stable and negligible transaction fees — at about 0.0011 ERG or one cent ($0.01).

How does Ergo work?

Thanks to its user-friendly ErgoScript programming language, each ergo coin hosted within smart contracts has a layer of protection. It specifies when the coin can be used, by whom, and under which conditions. ErgoSript uses Sigma Protocols as the building blocks for zero-knowledge proof, used in cryptography.

In practice, this means that a sigma (Σ) protocol revolved around a 3-fold proofing mechanism to secure contractual money:

• Message sent from the prover to verifier, as the first one
• Random challenge coming from the verifier
• Message sent from the prover to the verifier, as the second one.
  

Based on these sigma protocols, ErgoScript makes it easy to develop smart contracts. Moreover, this is further helped by Ergo’s support for light nodes. These are blockchain software packages that neither need to hold an entire blockchain copy nor do they need to run 24/7. As such, they make Ergo very mobile-friendly because the need for storage space and computing power is significantly reduced.

Furthermore, by divesting itself from general-purpose languages, such as C, Java, or Python, ErgoScript was specifically designed to be the best at what it does — create code for decentralized finance. Specifically, contractual money in a Turing-complete manner but with a reduced potential for spam attacks thanks to its ahead-of-time estimation feature.

Lastly, just like Tezos (XTZ), Ergo (ERG) is a self-amending blockchain, making it easier to upgrade for the long haul, which is another part of its resiliency feature. Unlike Bitcoin, Ergo doesn’t have a hard block size limit. Based on network demand, it can shrink or increase, but its growth rate is limited to a certain rate to prevent spurts in a short time span.

Notable Ergo dapps.

ErgoMixer.

Hailed as the first non-custodial and non-interactive crypto mixer, it secures user privacy by sending tokens in batches and then mixing them up. Although not impossible, it makes tracking user transactions significantly more difficult as opposed to just directly sending tokens from one wallet into another.

SigmaUSD.

Built on the AgeUSD protocol, it is the first UTx0-based stablecoin. Unlike USDC or USDT, sigmaUSD is a decentralized stablecoin that has been developed in partnership with Cardano’s IOHK and Emurgo.

Tokenomics.

ERG is a deflationary token, hard-capped at under 100 million ERG. It doesn’t have a long tail of emission, and its block rewards steadily decrease following a two-year period.

When ERG launched on the mainnet, block rewards were set at 75 ERG. After eight years, it will go down to zero, at which point the total ERG supply will have a settled number.

Presently, ERG’s maximum supply is 97,739,924 ERG, with circulating supply a third of that, at 32,012,428 ERG. To put ERG’s emission into perspective, Bitcoin’s emission will be completed over 100 years, with nearly 75% mined within BTC’s first eight years.

Improving upon Bitcoin design, ergo crypto has a feature called storage boxes — UTXOs. If they have been inactive for over four years, ergo miners receive storage rent fees in addition to transaction fees. This approach gives miners a source of revenue once block rewards run down to zero. Additionally, storage fees recycle lost coins back into ergo’s economy at a rate of ~0.13 ERG every four years.

Ergo mining.

U.S. China Beijing Bitcoin mining As mentioned previously, Ergo’s minting of the entire supply will occur during the first eight years after its mainnet launch. The prerequisites for mining ERG tokens are very friendly to newcomers. One only needs to configure an Ergo node. Then, a GPU with merely 4 GB of VRAM would suffice, although 8 GB is recommended.

Needless to say — because Ergo uses a tried and tested Proof-of-Work consensus — miners can employ multiple GPUs on a single Ergo node.

To wrap up everything please read the original article as I left out a ton of interesting things to read about the project. I do own Ergo and it is one project together with Bitcoin,ETH and Cardano that I truly believe in. Hopefully this post will get more people interested in the project.