Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference.
Ethereum is used to build a decentralized network of next-generation applications, which are referred to as DApps. These DApps are powered by Ethereum’s native token, Ether (ETH).
The Ethereum network has two main components: the blockchain and the virtual machine. The blockchain is a global ledger of allETH transactions.
The virtual machine is a Turing-complete software that runs on the Ethereum network and executes smart contracts.
The Ethereum network has a native token, Ether (ETH), which is used to pay for transaction fees and gas. Gas is a unit of measurement that represents the computational power required to execute a transaction or smart contract on the Ethereum network.
The Ethereum network has a block time of 15 seconds, which means that a new block is generated every 15 seconds. The block time is different from the block interval, which is the time it takes for a new block to be added to the blockchain.
The Ethereum network uses a proof-of-work (PoW) consensus algorithm. PoW is the most common consensus algorithm used by public blockchain networks.
Under PoW, miners compete against each other to validate blocks of transactions and earn rewards in ETH.
The main purpose of the Ethereum network is to run smart contracts. A smart contract is a piece of code that runs on the Ethereum network and performs an action when certain conditions are met.
Smart contracts can be used to create decentralized applications (DApps). A DApp is an application that runs on the decentralized infrastructure provided by the Ethereum network.
DApps are often compared to traditional centralized applications (CApps), such as Facebook or Google Maps. However, unlike CApps, DApps are not controlled by any single entity.
This makes them more resistant to censorship and fraud.
The most popular DApp built on the Ethereum network is CryptoKitties, which allows users to breed and trade digital cats. Other popular DApps include Augur, an decentralized prediction market, and MakerDAO, which issues loans in Dai, a stablecoin pegged to the US Dollar.