Ethereum

Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference.
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Price
Basic
Announcement Date:
2013-12-31
Initial release:
2015-07-15
Hash function:
Ethash algorithm
Smart Contract Support:
Yes
Smart Contract Language:
Solidity
Consensus Mechanism:
Proof of Work and Proof of Stake
Ethereum101

What is Ethereum?

Ethereum is a blockchain based open source platform on which many applications can be built. The idea behind Ethereum platform is to create a web of decentralized apps: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference.

Unlike Bitcoin, Ethereum’s main focus is not payment although its native token ether could also be used for payment purposes. The key focus of Ethereum is to serve as a platform for the execution of smart contracts. Given its stronger functionalities, the platform has been widely regarded as the second generation blockchain technology.

How does Ethereum work?

Ether

Ether is the native token of the Ethereum network. It is also the fuel for operating the distributed application platform Ethereum. It is a form of payment made by the clients of the platform to the machines executing the requested operations.

Ether, like Bitcoin, could be used as a means of payment.

Smart Contracts

Ethereum features the usage of Smart Contracts in its blockchain technology. Smart contracts are also known as Digital Contracts or Self Executing Contracts.

Smart Contracts are account holding objects that remove the necessity of a middleman when a contract has to be established. In current context, Ethereum Smart Contracts helps in exchanging financial assets or anything of value in a transparent, conflict-free way. They contain code functions and can interact with other contracts, make decisions, store data, and send ether to others. Contracts are defined by their creators, but their execution, and by extension the services they offer, is provided by the ethereum network itself.

Consensus mechanism

Similar to Bitcoin, Ethereum started with Proof of Work (“POW”) as its main consensus algorithm. The network has since then moved into a hybrid system where some of the transactions (1 out of 100) are being processed through a Proof of Stake (“POS”) mechanism (Casper Protocol). Eventually the Ethereum Foundation plans to switch to a pure POS model.

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