Welcome to Smart Money

Blockchain is a rapidly-advancing field that offers many exciting developments, with more applications and use cases appearing every day. However, this innovation often comes with a ‘move fast and break things’ approach to software development that doesn’t sit well when dealing with millions or even billions of dollars of users’ financial value.

Ergo draws on ten years of blockchain development, complementing tried and tested principles with the best peer-reviewed academic research into cryptography, consensus models and digital currencies. We start with solid blockchain basics and implement new and powerful cryptography natively. Our team has a solid background in core development with cryptocurrencies and blockchain frameworks including Nxt, Scorex and Waves, and our lean approach means we can prioritise new features and requirements quickly.

Explore our key research

In our different experiences of working with blockchain platforms, we’ve learned that conventional Turing-complete smart contracts may be powerful, but they can be risky. Implementing complex computational tasks on the blockchain can have unintended consequences. Network conditions, bugs and code exploits can mean it’s impossible to know how expensive it is to execute software – or whether that code will run as intended at all. That can lead to security vulnerabilities and faulty dApps.

Ergo’s smart contracts allow us to execute wide-ranging tasks, but we always know in advance how much the code will cost and whether it will run successfully. Meanwhile, we can still write Turing-complete scripts by iterating processes across multiple blocks. That means Ergo can support versatile dApps that run predictably, with known costs, and don’t have any of the dangers of unrestricted functionality.

ErgoScript tutorials and integration tools

Sigma protocols are the foundation of Ergo’s smart contracts. They allow for a class of efficient zero-knowledge protocols that enable us to implement tasks that would otherwise be either impossible, or else risky and expensive.

For example, Sigma protocols let us implement ring and threshold signatures out of the box. Let’s say you want to create a ‘ring spending contract’, where either of us can make a transaction from the same address, but we don’t want anyone else to know which one of us is spending the funds. That’s not possible with Bitcoin. And, while it can be done with Ethereum, it would be expensive and complicated – especially with a ring size of 10 or 20 members, which would be required for robust privacy.

With Ergo, this kind of application can be created easily, thanks to the integration of Sigma protocols in the core. This enables self-sovereign application-level privacy: trustless scripts that can be used to access mixers or other functionality, without any third parties required at all.

Each script is applied to an unspent output. We have drawn this feature from the Bitcoin protocol, which also uses UTXOs or the ‘coin’ model, rather than an ‘account’ model like Ethereum’s. We consider this a more secure approach, since boxes are immutable, as well as being more flexible.

Ergo’s blockchain uses the Autolykos algorithm for consensus, which is a variant of Equihash and offers better ASIC resistance, as well as a degree of pool resistance. This enables better decentralization, avoiding large pools that can collude or be coerced to attack the network. At the same time, we recognise that ordinary users who do not run a full node should enjoy the same security benefits as miners. Ergo’s non-interactive proof-of-proof-of-work (NiPoPoW) allows anyone to make and verify transactions with complete confidence, without needing the storage, bandwidth and time required to download the full blockchain. In fact, as little as 1 MB of data is required – meaning any device can be used.

Choose your wallet

Like many other features in Ergo, the network’s economic model is based on Bitcoin’s approach. We believe that digital scarcity is important for underpinning value, and have capped coin supply at under 100 million ERG. Unlike Bitcoin, the block rewards decrease steadily after the first two years, with no long tail of emission. Block rewards start at 75 ERG, and over a period of eight years will fall to zero, after which total supply will be fixed.

At this point, in addition to transaction fees, miners will also benefit from storage rent fees charged on boxes (UTXOs) that have not moved their coins for four years or more. There are at least two advantages to this approach. Firstly, it gives miners an additional source of revenues once block rewards end. Since the security of the network depends on hashrate and miner participation, this is an important incentive to provide. Secondly, it has the effect of recycling lost coins (and dust) back into the Ergo economy. Research suggests that up to 4 million BTC have been permanently removed from circulation due to lost private keys. Ergo’s storage fees will slowly reclaim these for productive purposes, while users who want to hold coins for the long term can avoid being charged simply by moving their funds.

Supported exchanges

There is a difficult balance between ensuring a project is adequately funded and potentially disadvantaging later users if a large proportion of tokens is pre-mined or reserved in an ICO. We have chosen a strategy that has proven successful for other cryptocurrencies, whereby a percentage of tokens from each block reward is allocated for development and marketing.

In Ergo’s case, these Foundation tokens are managed by a smart contract built into the protocol. 10% of each block reward for the first two years, or 7.5 ERG per block, are allocated to the Treasury, with the remaining 67.5 ERG going to miners. As block rewards begin to reduce after two years, the Foundation will continue to receive rewards over 67.5 ERG, with the Treasury allocation dropping to zero after 2.5 years.

More about the Ergo Foundation

Ergo is designed and implemented by a team of experienced developers and researchers, who hold publications and PhDs in cryptography, compiler theory, blockchain technology, and cryptographic e-cash. The team also has a solid background in core development with such cryptocurrencies and blockchain frameworks as Nxt, Scorex and Waves.

We are also supported by community developers, who may work on a volunteer basis or who receive grants from the Foundation for implementing useful features and dApps. For example, ErgoMix, a decentralized mixing service based on Sigma protocols, was built by a third party developer from the Ergo community, and Ergo’s decentralized exchange is also being developed on this basis.

Meet the Ergo team

Ergo is designed and implemented by a team of experienced developers and researchers, who hold publications and PhDs in cryptography, compiler theory, blockchain technology, and cryptographic e-cash. The team also has a solid background in core development with such cryptocurrencies and blockchain frameworks as Nxt, Scorex and Waves.