æternity Coin
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Æ coins (formerly AE tokens or aeons) are the native currency of the æternity blockchain. These coins are essential for all operations within the æternity ecosystem, functioning as the fuel that powers transactions and smart contract interactions. Just as gasoline is required to run a car, AE coins are needed to execute any action on the æternity blockchain.
One primary function of Æ coins is to facilitate value transfer between users. The most basic transaction on the æternity blockchain is the "spend transaction," which allows users to send Æ coins to other accounts, oracles, or smart contracts. This straightforward mechanism forms the basis of economic activity within the æternity network.
Beyond simple transfers, Æ coins play a critical role in powering the execution of smart contracts. Smart contracts, essentially self-executing agreements encoded on the blockchain, require computational resources to operate. Each operation performed by a smart contract incurs a cost, measured in "gas," and this gas must be paid for using Æ coins. This "gas fee" mechanism ensures that users pay for the computational resources they consume, preventing abuse and incentivizing efficient contract design.
The creation of new Æ coins is governed by a process called mining, which is closely tied to the consensus mechanism of the æternity blockchain. æternity utilizes a modified version of the Nakamoto consensus algorithm, known as Bitcoin-NG, which introduces the concept of key-blocks and micro-blocks. Miners compete to solve complex computational puzzles using the Cuckoo Cycle algorithm, a memory-bound proof-of-work system designed to be resistant to specialized mining hardware.
When a miner successfully solves a Cuckoo Cycle puzzle, they earn the right to produce a key-block, which initiates a new "generation" on the blockchain. This key-block grants the miner the authority to generate a sequence of micro-blocks, each containing a limited number of transactions. Miners receive rewards in the form of newly minted Æ coins for both creating key-blocks and including transactions in micro-blocks.
The æternity blockchain follows a predefined economic model with a finite coin supply. During the initial token sale in 2017, a significant portion of the initial AE Tokens/Æ coins were distributed, with the remainder allocated to the founding team, company, and foundation for future use. Following the launch of the mainnet, mining began, gradually increasing the total number of Æ coins in circulation. Similar to Bitcoin, the rate of new coin creation decreases over time, eventually reaching a maximum limit. This controlled issuance schedule ensures scarcity and helps to maintain the value of Æ coins.
Understanding the role and function of Æcoins is fundamental to navigating the æternity ecosystem. These coins are not merely a speculative asset but the driving force behind all activity on the blockchain. The mining process, consensus mechanism, and economic model work together to ensure the security, stability, and sustainability of the æternity network. As the æternity blockchain continues to evolve, Æ coins will undoubtedly remain a central element of its operation and growth.
