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 powered by Ether, a cryptocurrency that can be used to pay for fees and services on the Ethereum network.
The Ethereum network is kept running by nodes, which are computers that keep the blockchain ledger and execute smart contracts.
In order to incentivize nodes to keep the network running, they are rewarded with Ether for every block they confirm. This process is called “mining.”
Miners are rewarded based on their share of work done, rather than their absolute power (hashrate). This means that miners can join and leave the network at any time, and the overall security of the network will not be affected.
The Ethereum proof of work algorithm is called Ethash. It is a modified version of the existing Dagger-Hashimoto algorithm, which was designed specifically for Ethereum.
Ethash is a memory-hard algorithm, which means that it requires a lot of memory to run. This makes it ASIC-resistant, meaning that special mining hardware cannot be created to mine Ether more efficiently.
ASICs (Application-Specific Integrated Circuits) are specialized hardware that can be used to mine cryptocurrencies more efficiently than general-purpose hardware. They are often used in Bitcoin mining, and have caused centralization of the Bitcoin mining network.
Ethereum’s use of Ethash makes it possible for anyone with a computer to mine Ether, as long as they have enough memory. This helps to decentralize the network and make it more secure.