Aeternity Blockchain

Aeternity (often written æternity) is a public blockchain designed for scalable smart contracts, with features such as state channels, native oracles and a naming system built into the core protocol rather than added by applications. Its mainnet launched in November 2018 after a token sale in 2017. The network's native coin, AE, pays transaction fees and rewards miners.

Aeternity was one of several projects from the 2017 era that set out to improve on the Ethereum blockchain in speed and cost. It uses a variant of proof of work combined with a block structure called Bitcoin-NG, and contracts are written in its own language, Sophia. The project was founded by Yanislav Malahov and has been developed by a foundation and associated teams.

Most blockchains are like a public noticeboard where every message must be pinned up for everyone to see, which is slow and costly. Aeternity tried to move much of the chatter off the board. Two parties can open a private channel, exchange many messages or payments between themselves, and only post the final result to the board when they are done.

It also built common tools straight into the board itself. Instead of each app writing its own way to bring in outside data, or its own system of readable names, the network offers these as standard features, a bit like a phone that comes with a camera and maps already installed.

Aeternity announced its plans in 2016 and sold tokens in two rounds in 2017 during the wave of initial coin offerings. Buyers first received ERC-20 tokens on Ethereum, which were later migrated to AE coins on Aeternity's own chain through a series of migration phases. The mainnet, code-named Roma, went live in November 2018, with later protocol upgrades adding features and changing consensus parameters. Like many projects of that period, Aeternity saw its market value fall well below its 2018 peak, and development has continued on a smaller scale.

The network combines several design choices:

• Consensus. Miners solve Cuckoo Cycle puzzles, a memory-bound proof-of-work algorithm designed by John Tromp, meant to be fairer to ordinary hardware than SHA-256 mining.
• Bitcoin-NG blocks. A miner who wins a "key block" becomes leader for a period and can publish frequent "microblocks" of transactions, raising throughput between key blocks.
• State channels. Parties lock coins on-chain, then transact and even run contracts off-chain, settling the final state later.
• Oracles. A native oracle mechanism lets outside data be posted and queried on-chain with fees and response rules.
• Naming system. Users can register readable names ending in ".chain" that point to accounts, similar in purpose to the Ethereum Name Service.
• Sophia language. A functional programming language intended to make contracts safer and easier to verify.

To scale further, Aeternity has worked on "hyperchains", a design in which separate chains use proof of stake for everyday block production but periodically anchor to an established proof-of-work parent chain for added security, a form of hybrid PoW/PoS consensus. The goal is to let communities run their own chains while borrowing the security of a larger network. As with many scaling roadmaps, users should check the project's own channels for the current status of these features before relying on them.

AE is used to pay transaction and contract fees, to register names and to reward miners, and it trades on a limited number of exchanges. The ecosystem has included wallets, a block explorer, decentralized applications and tools for developers. Compared with larger smart contract platforms, activity and liquidity have been modest, which affects how easily AE can be bought or sold.

Aeternity's main challenge has been competition. Ethereum, its layer 2 networks and newer chains attracted most developers and users, leaving smaller platforms with thin ecosystems. A distinct programming language raises the learning barrier for developers used to Solidity. Proof-of-work chains with low hashrate can be more exposed to majority attacks than larger networks. Holders also face the usual risks of small-cap crypto assets, including high volatility, low liquidity and uncertainty about long-term funding for development.

• æternity