In May 2021, Bitcoin and its Proof-of-Work consensus mechanism became the target of criticism. The reason for it was the statement of Elon Musk, who called BTC mining unenvironmental. As a result, the cryptocurrency market sank, and the developers of some of them even undertook to transfer their projects to new Proof-of-Stake mechanisms. Ergo is not one of them. The creators of the coin have a special relationship with miners, and the mining of cryptocurrency promises to be always stable. We talk about the project and its mining in more detail.
What is Ergo. Cryptocurrency Features
The developers position Ergo as “smart money” — this is exactly the kind of remark that greets visitors to the official website of the cryptocurrency. As the representatives of the project immediately clarify, they create advanced cryptographic features and rethink the functionality of the decentralized finance niche that is popular today. And all this is happening on the basis of a decade of studying and creating blockchains.
In general, developers focus on six components that distinguish the project from what is happening in the cryptocurrency niche. This is the vision of developers, the consensus mechanism, the use of light clients, survivability, economics, and applicability of the project in various areas.
The vision of Ergo developers
According to the representatives of the project, they created Ergo in response to the stagnation of the blockchain industry. As a result, they implemented several ready-to-use technical and economic ideas that do not detract from the well-known advantages of the blockchain.
The main objective of the project is to create an efficient and secure environment for the execution of financial contracts, which are the most popular use case for blockchain today. At the same time, they promise to get rid of the existing shortcomings of the traditional financial system, such as blacklists of users and other forms of discrimination.
That is, in the end, the developers want to do something like what Ethereum provides today. It is important to note that Ergo runs on a separate blockchain.
Ergo consensus algorithm
Ergo uses a special consensus protocol called Autolykos, which is based on the Proof-of-Work mechanism. PoW itself was chosen because of its prevalence and high security.
At the same time, Autolykos has a number of advantages and innovations. For example, for mining the native token of the ERG network, 3 GB of memory is enough, which significantly reduces the threshold for entering this niche. Even in the cryptocurrency network, a mechanism for renting for storing lost and simply forgotten coins is implemented.
Long term calculation
Ergo developers have prepared the conditions for introducing changes to the cryptocurrency network in the future. For example, miners will be able to vote on increasing or decreasing the maximum block size, the cost of holding old coins, and so on.
For more fundamental changes, Ergo will have a soft fork mechanism. If the majority of network participants decide to change something, this update will be implemented. At the same time, the old nodes that did not vote for the change will continue to function normally and ensure the network is up and running. That is, there should be no need for hard forks in Ergo.
Economics of the Ergo project
This is the most interesting part of the project. The creators of Ergo have introduced the so-called storage fee for old coins, which sets it apart from other networks. In particular, if the cryptocurrency is not moving for four years, the miner can charge a small fee for each byte of information about them stored in the blockchain.
The interaction is reminiscent of cloud storage platforms where users pay money to keep their own documents, music and other files available outside of their own devices.
This provides several advantages for the Ergo network: first of all, ERG mining will be stable forever. The same cannot be said for Bitcoin, with a maximum supply of 21 million coins, which, once the last one is mined, will force miners to switch entirely to income in the form of transaction fees. In this case, Ergo miners will have an additional source of income.
Secondly, the controlled and predictable size of the blockchain will reduce the hardware requirements for miners. Finally, thirdly, the collection of fees for obsolete coins will allow returning the crypto-currency that has retired from circulation back. And this makes it impossible for a significant drop in the supply of cryptocurrency over time due to lost private keys.
Ergo Cryptocurrency Mining
As already noted, the requirements for Ergo miners are quite democratic. For mining ERG, a video card with 3 GB of memory is enough, which is reminiscent of the situation with the popular Ravencoin. The reward for the created block is 67.5 ERGO and the commission is on top.
To start Ergo mining, we create one of the wallets we have already mentioned or use the address of the cryptocurrency exchange. Then we download the miner: we recommend the already familiar lolMiner, nbminer, TeamRedMiner or T-rex. We indicate in it your wallet, as well as the URL of the pool.
That’s all, you can start earning Ergo.
