Ethereum is a public blockchain platform that offers smart contract functionality. Ethereum allows developers to run distributed applications on top of a global network of public nodes. Ethereum’s native token is called the Ether. Users of Ethereum are distributed across decentralized nodes, and they create and maintain a decentralized network called the Ethereum Virtual Machine (EVM).
Ethereum doesn’t use a traditional client-server model. Instead, it proposes a distributed network where nodes are run by “volunteers”. These volunteers replace the roles of traditional servers or cloud platforms and offer computational services.
In a way, Ethereum draws inspiration from Bitcoin’s blockchain. Ethereum attempts to create a trustless platform where smart contracts can be executed. In addition to making payments, Ethereum users can also run other types of applications and services on the blockchain.
Ethereum can be described as an agreement that decentralized applications adhere to. At its core is the Ethereum Virtual Machine (EVM), which can run algorithms of any level of difficulty. In the world of computability theory, this is called “Turing completeness.” Programmers can use a programming language similar to ones that they’re familiar with (like JavaScript or Python) to create applications that run on the EVM. These applications are called decentralized applications, or “dapps.”
The advantage of running dapps on the Ethereum blockchain is related to its distributed, decentralized nature. Because everything is publicly available on nodes, data can’t be tampered with or changed by a third party. Similarly, because there is no single point of failure, it increases the network’s robustness against certain types of attacks. The fact that it is distributed across a vast network of nodes using consensus algorithms also makes it harder to submit it to censorship efforts by any central authority.
Despite the advantages mentioned above, Ethereum also faces many risks and challenges. For example: Since dapps running on the blockchain network are written by developers, they can be susceptible to errors or bugs just like any other traditional application.
What is Ether?
Despite being a public network, Ethereum is not a free network. Users must make payments in order to use its computational resources. In other words, if users want the nodes to help in executing their codes, they need to pay these nodes. These payments are made using a cryptocurrency called Ether.As a cryptocurrency, Ether (ETH) can therefore be used in different ways, including:
- Exchanged between users to pay for services or products
- Used by investors in trading operations
- Used by developers to pay for services and computing resources on the Ethereum blockchain
Smart Contracts
Smart contracts is how the Ethereum blockchain organizes computational tasks. In its essence, a smart contract is a computer code. This code usually defines the asset being exchanged, which can take the form of currencies, properties, or other types of assets. As an example: If a smart contract is for a payment between two parties, the contract can automatically manage and execute the payment. Even more, the smart contract can even be set to automatically execute a payment when certain conditions are met.
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