What is Ethereum?

 

Ethereumis home to digital money and global payments, bold new ways to earn and so much more – all accessible from any place with an internet connection. It’s the platform that powers a booming digital economy and is the backbone for decentralized finance (DeFi).

The idea behind ethereum is to build a blockchain network with a fully-fledged programming language that allows developers to write software that automates specific outcomes – similar to how a traditional contract would work, but executed in code. These contracts are triggered whenever pre-determined conditions are met, eliminating the need for human intervention.

Demystifying Ethereum: A Comprehensive Guide for Beginners

Ethereum runs on a shared digital ledger called the blockchain, which is public, transparent and very difficult to tamper with retroactively. It’s maintained by miners who compete to verify and add data to the blockchain using energy-intensive machines – this process is known as mining. The miner is rewarded with tokens, or ether, for each block they validate.

A key difference between ethereum and other blockchains is that it’s not just about recording transactions, but also keeping track of the network’s state. This includes every account, smart contract, and transaction on the network. Performing these operations on the Ethereum Virtual Machine costs “gas.” Just like petrol in your car, gas has a per-unit price and has a limit.

In September 2022, a significant upgrade to the Ethereum network was launched, known as the Merge. The changes will improve the security, performance and scalability of the system by partitioning global state and computation into shard chains. This is similar to how databases are split up to improve their efficiency and performance.