How Does Ethereum Work?
Ethereum is a decentralized platform that enables developers to build and deploy smart contracts and decentralized applications (dApps). Unlike traditional cryptocurrencies, Ethereum operates on a complex blockchain infrastructure that supports a wide range of functionalities.
Key Components
- Smart Contracts: These are self-executing contracts with the terms directly written into code. They automate processes, reduce the need for intermediaries, and enhance security.
- Ether (ETH): Ethereum's native cryptocurrency used to fuel transactions and compensate participants who validate and secure the network.
- Decentralized Applications (dApps): Applications that run on the Ethereum blockchain, allowing users to interact directly without intermediaries.
Blockchain Technology
Ethereum's blockchain consists of a decentralized ledger that records all transactions, ensuring transparency and security. Each block contains a set of transactions, and once verified, it is added to the chain. Miners use computational power to solve complex mathematical problems, validating transactions and earning ETH in return.
Ecosystem & Community
The Ethereum ecosystem fosters a vibrant community of developers, investors, and businesses committed to innovation. Leveraging Ethereum’s capabilities, numerous projects and protocols are continuously being developed, making it a foundation for decentralized finance (DeFi), non-fungible tokens (NFTs), and more.