What is Ethereum?
How does Ethereum work?
Ethereum uses Blockchain technology, and it uses it in two ways – Smart contracts and dApps. The Ethereum blockchain is designed in a way that the transactions can only happen when certain conditions are met. And the rules which decide the conditions are known as smart contracts. They will work with all the aspects of the contract, including management, performance, payment, and enforcement. Once the smart contract is deployed, it cannot be edited or amended; it is immutable.
Ethereum has a coding language named Solidity, which is used to build decentralized applications. The dApps are the applications that do not work on a traditional central server; instead, they run on blockchain technology. These dApps are going to compete with centralized apps in industries like e-Commerce, email, social media, and online banking.
Ether is a digital fuel for automated smart contracts, and new Ether is created by the process ‘mining.’ In the process nodes on a blockchain must verify the transactions, and as a result, they are rewarded with a new currency. Mining Ether in such a way is called ‘Proof of Work.’
To store ETH, you will need a wallet that contains private keys. There are five types of wallets where you can store your ETH – Hardware wallets, Desktop wallets, Mobile wallets, Web wallets, and Paper wallets.
ETH runs on blockchain technology, which is upheld by a network of many high-performance computers called nodes. As a result of securing the network and verifying the transactions, the nodes receive rewards in the form of tokens. Ethereum was the first digital currency, which was primarily built as a settlement layer. It means that it was designed in a way that other things to be developed on its platform. One aspect of Ethereum’s suitability as a settlement layer is its ability to execute smart contracts.Smart contracts are secure because they prevail on Ethereum blockchain, which is impossible to temper with. As smart contracts are blockchain-based, it is trustless.
Ethereum can be used as a platform for developing dApps which are decentralized and are not run by a single entity. Ethereum based apps do not need users’ personal information in registering and using. Ethereum based dApps do not need to integrate any third-party means of payment.
Ethereum can be used in the prediction market, crowdfunding, Web hosting, legal contracts, and many more.