Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference. These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property. Smart contracts make it possible to create markets, store registries of debts or promises and move funds in accordance with instructions, all without middlemen.
The Ethereum Blockchain
The Ethereum blockchain is a decentralized, open-source platform for developers to build decentralized applications (dApps). dApps are applications that run on the blockchain and they are not controlled by any single entity. Ethereum is a programmable blockchain, so it allows developers to build smart contracts, decentralized applications, and organizations that run without relying on centralized systems.
Ether and gas
Ether, the cryptocurrency of Ethereum, is used to pay for computation and storage on the network. Users are required to buy ether in order to use the network. Ether is the fuel that powers Ethereum’s smart contracts and makes them executable. The amount paid per unit time is called gas. Gas is the price of running a transaction or contract on the Ethereum network. The more complex an operation is, the higher its gas cost.
Ethereum mining
Mining is how people earn ether. It’s a process that verifies transactions on the blockchain and is done by computers. Mining is a distributed consensus system that confirms transactions in return for payment, helping to keep the blockchain secure and reliable.
On the 15th September 2022, Proof of Stake (POS) was implemented as an alternative to Proof of Work (POW) for reaching consensus on the blockchain.
POS is a consensus mechanism where people can earn ether by locking their ether up in a special wallet. This means that it’s possible to stake your coins and earn rewards without having to use any computing power. The more ether you stake, the higher your chances of earning rewards are.
Decentralized applications (DApps)
Decentralized applications (DApps) are the next generation of web apps. They run on a blockchain, which means they don’t need a central point of control. Instead, they’re open source and run autonomously. This creates a more secure environment than traditional systems, where your data can be stored and manipulated by hackers or other malicious parties.
Smart contracts
Smart contracts are computer programs that execute the terms of an agreement, or contract. They’re designed to be able to automate business processes, and the Ethereum network provides support for decentralized applications (Dapps) that can be used for this purpose.
Smart contracts are immutable; they cannot be changed or hacked because they are mirrored onto several computers around the world at all times so that any change would require changing all versions simultaneously, which is impossible due to their distributed nature.
Tokens built on Ethereum
The most common Ethereum token is the ERC-20. This standard has become so popular that it’s being adopted by companies beyond the cryptocurrency space, including governments and other mainstream organizations.
In late 2017, CryptoKitties released its collectible asset game based on the ERC-721 token standard—allowing players to own unique digital cats that could be bred with one another and sold or traded across different blockchain platforms.
The ERC-721 protocol allows for non fungible assets like these kittens; in other words: they are non divisible units unlike Bitcoin or Ether which can be divided into smaller units. For example: if you have five bitcoins then you also have five bitcoins worth of value at any given time but if someone offers me an ‘egg’ from an egg laying chicken farm I could accept their offer because it wouldn’t take away from my existing supply of eggs so long as I didn’t spend it all at once 🙂
Ethereum is a platform that can be used to build decentralized applications, run smart contracts and much more.
Ethereum is a blockchain-based decentralized platform that enables smart contracts and distributed applications (DApps) to be built and run without any downtime, fraud, control or interference from a third party.
Ethereum was invented by Vitalik Buterin in 2013. Since its launch, the platform has grown to become the largest open-ended decentralized software platform in the world. Ethereum can be used to codify, decentralize, secure and trade just about anything: voting, domain names, financial exchanges, crowdfunding and the internet of things.