Introduction to Ethereum
Ethereum is an open-source blockchain platform that supports smart contracts and decentralized applications (dApps). Launched in 2015 by Vitalik Buterin, Ethereum provides developers with a flexible programming environment to build and deploy complex applications on the blockchain.
Key Components of Ethereum
1. Blockchain Technology
Ethereum leverages blockchain to record transactions securely. This distributed ledger ensures transparency and immutability of data.
2. Smart Contracts
- Self-executing contracts written in programming languages like Solidity.
- Automatically enforce terms when predefined conditions are met.
3. Decentralized Applications (dApps)
- Operate on blockchain without central servers.
- Enable trustless interactions via Ethereum Virtual Machine (EVM).
Core Features
1. Ether (ETH)
- Native cryptocurrency used for transaction fees ("Gas") and smart contract execution.
2. Ethereum Virtual Machine (EVM)
- Turing-complete virtual machine that runs smart contracts uniformly across all nodes.
3. Account Types
| External Accounts (EOA) | Contract Accounts |
|----------------------------|-----------------------|
| Controlled by users (private keys) | Managed by smart contracts |
| Initiate transactions | Execute predefined logic |
👉 Learn more about Ethereum wallets
How Ethereum Works
1. Transactions
- Include sender/receiver details, amounts, and data.
- Recorded permanently on the blockchain.
2. Mining (PoW)
- Miners validate transactions via Proof-of-Work (transitioning to Proof-of-Stake in Ethereum 2.0).
3. Ethereum 2.0 Upgrades
- Sharding for scalability.
- PoS for energy efficiency.
Use Cases
1. DeFi (Decentralized Finance)
- Platforms like Uniswap (trading) and MakerDAO (lending).
2. NFTs
- Tokenize unique assets (art, collectibles) on Ethereum.
3. DAOs
- Community-governed organizations (e.g., Aragon).
4. Supply Chain
- Track goods with transparent, tamper-proof records.
👉 Explore Ethereum-based DeFi projects
FAQs
Q: Is Ethereum better than Bitcoin?
A: Ethereum focuses on programmability (smart contracts), while Bitcoin is primarily a digital currency.
Q: What is Gas?
A: Fees paid to execute transactions/contracts on Ethereum, priced in Gwei (1 ETH = 10⁹ Gwei).
Q: How secure is Ethereum?
A: Highly secure due to decentralization, but smart contract bugs can pose risks (e.g., DAO hack).
Q: When will Ethereum 2.0 launch?
A: Rollout began in 2020 and is ongoing, with full integration expected by 2025.
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