You don’t need to be tech savvy before you can understand what Ethereum is and how it works. A simple explanation of Ethereum can be understood by anyone that understands a few things about the blockchain technology. All you have to do is read.
What is Ethereum?
Ethereum, simply put, is a blockchain-based open software platform that allows developers build decentralized applications. Many people consider Ethereum as the exact thing as Bitcoin, but this isn’t the case. Although both Ethereum and Bitcoin are based on the blockchain technology, there are key differences that will be discussed in another article.
Miners in the Ethereum Blockchain mine for Ether. They solve complex mathematical equations, and their reward is the Ether. Ether is the token that fuels the Ethereum network. Apart from being tradable cryptocurrency, Ether can be used to pay for transactions on the network.
Smart Contracts: the Bedrock of Ethereum
Smart contracts are most commonly associated with Ethereum. It’s a term that is used to refer to a computer code that facilitates the exchange of content, money, property, shares, and just about any valuable thing. Smart contracts, when operating on the blockchain, act as self-operating programs that execute automatically as long as specific requirements are met. There is no possibility of censorship, fraud, downtime or any other form of third-party interference with smart contracts. They operate exactly as programmed.
Although all blockchains can process codes, many are limited in their processing power. This is what makes Ethereum’s blockchain exceptional. It doesn’t give a set of limited operations; it allows developers to create their operations. This allows them to build hundreds and thousands of applications that are more advanced than anything the world has seen before now.
The Ethereum blockchain is exceptional in capabilities. One of the amazing functions of the Ethereum blockchain is its ability to create smart contracts that are self-executing as stated above.
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