Ethereum Blockchain:
Ethereum is a blockchain-based decentralised global software platform at its heart. Most people are familiar with it because of its native cryptocurrency, ether (ETH).
Anybody can create any safe digital technology using Ethereum. If adopted, users may also use the token to pay for tangible goods and services. It contains a token designed to reward users for efforts done in support of the blockchain.
The characteristics of Ethereum include being scalable, programmable, secure, and decentralised. For programmers and companies building technology on top of it to alter many industries and how we go about our daily lives, this is the blockchain of choice.
With smart contracts, developers can create decentralised apps (dApps) on the blockchain-based Ethereum platform. It was developed by Russian-Canadian programmer Vitalik Buterin in 2014 and released in 2015. It has emerged as one of the most widely used platforms for creating decentralised applications.
source:https://www.researchgate.net/publication/337005478/figure/fig1/AS:821358162366464@1572838454286/Overview-of-Ethereum-Blockchain.png
How does Ethereum work:
Ethereum is made up, broadly speaking, of several important parts:
Smart contracts: Smart contracts can be used for various purposes, including financial transactions, identity verification, and supply chain management.
The blockchain of Ethereum: The blockchain of Ethereum contains a complete history of all transactions and smart contract calls.
Convergence mechanism: The process used to validate and record data on the blockchain; it also aids in network security and is in charge of releasing new tokens into circulation.
The (EVM)Ethereum Virtual Machine: the component of Ethereum responsible for carrying out its rules and ensuring that any submitted transactions or smart contracts do so.
source:https://ethereum.org/static/e8aca8381c7b3b40c44bf8882d4ab930/302a4/evm.png
Decentralized Applications (dApps): Ethereum enables developers to build decentralized applications (dApps) using smart contracts. These d-Apps are decentralized because they are not controlled by a central authority or organization, but rather run on a decentralized network of computers.
Some popular dApps built on Ethereum include:
Uniswap: a decentralized exchange for trading cryptocurrencies
CryptoKitties: a blockchain-based game where players can collect and breed digital cats
Aave: a decentralized lending platform that allows users to lend and borrow cryptocurrencies
Ether (ETH):
Ether (ETH) is the native cryptocurrency of the Ethereum network. It is used to pay transaction fees and gas costs on the network. Gas is the unit used to measure the amount of computational effort required to execute a smart contract or transaction on the network.
Developers can also create their tokens on the Ethereum network using the ERC-20 standard. These tokens can be used for a wide range of purposes, including crowdfunding, rewards programs, and loyalty programs.
source:https://images.theengineeringprojects.com/image/main/2021/06/working-procedure-of-ethereum.png
Use Cases:
Ethereum has a wide range of use cases, including:
Decentralized finance (DeFi): Many of the most popular d-Apps built on Ethereum are related to DeFi, such as lending platforms, decentralized exchanges, and stablecoins.
Gaming: Ethereum has become a popular platform for blockchain-based games and digital collectables, as demonstrated by the success of CryptoKitties and other similar projects.
Identity verification: Ethereum can be used for secure and decentralised identity verification, enabling individuals to verify their identity without relying on third-party services.
Supply chain management: Ethereum can be used to create more transparent and efficient supply chains, by tracking products and materials from the source to the end consumer.
Wallets
Owners of Ethereum save their ether in wallets. You can access your ether that is kept on the blockchain using a wallet, which is a digital interface. You have an address in your wallet, which is like an email address in that it is where users transfer ether, much like they would an email.
Your wallet does not contain any ether. Private keys kept in your wallet are used as a password when you start a transaction. With every unit of ether you own, you get a private key. You need this key to access your ether. That is why you hear so much about storing keys securely using various techniques.
source:https://alphawallet.com/wp-content/uploads/2020/07/open-source-ethereum-wallet-1920x1200.jpg
The Future of Ethereum
Ethereum is transitioning to the proof-of-stake protocol as part of a significant upgrade to the Ethereum network, allowing users to confirm transactions and generate fresh ETH based on their ether holdings. Once known as Eth2, this upgrade is now referred to as Ethereum. However, Ethereum now has two layers. The execution layer, the first layer, is where transactions and validations happen. The second layer, consensus, is where attestations and the consensus chain are kept current.
The upgrade boosted the Ethereum network’s ability to expand, which would eventually help to resolve ongoing network congestion concerns that have driven up gas prices.
To address scalability, Ethereum is continuing “sharding” work. Sharding will be used by the Ethereum network to distribute the database. This idea is analogous to cloud computing, which accelerates processing by distributing the job across a large number of devices. These smaller portions of the database will be referred to as “shards,” and those who have staked ETH will work on them. Shards allow for many validators to work concurrently, reducing the time needed for the so-called “sharding consensus” process.
Conclusion:
For creating decentralised applications and carrying out smart contracts, Ethereum is a potent platform. It has been a popular option for both consumers and developers due to its support for the ERC-20 token standard and the huge variety of dApps launched on the platform. It seems probable that Ethereum will be a key player in the blockchain arena for years to come given the increased interest in DeFi, NFTs, and other blockchain-based applications.
