Understanding ethereum is home to a booming digital economy and bold new ways for creators to earn online. It’s open to everyone, anywhere in the world — all you need is an Internet connection.
The Ethereum network is like one big supercomputer. It’s not controlled by any central authority, and all the computers that run it are spread out around the world. This is what makes it a decentralized platform.
It uses blockchain technology to exchange and store data. The underlying system is called Proof-of-Work, which involves miners using powerful GPUs or ASICs to solve complex mathematical problems. When a problem is solved, the miner is rewarded with ETH tokens for their efforts. These tokens can then be used to pay for transactions on the Ethereum network.
Demystifying Ethereum: A Beginner’s Guide to the World of Smart Contracts
When you send a transaction on the Ethereum blockchain, it is recorded as a block in the Ethereum ledger. Each block contains the transfer information and a small fee that’s denominated in ETH. These fees help cover the cost of building, maintaining, and executing each function on the blockchain.
Each account on the Ethereum blockchain has a public address and a private key. The public address is how others can reach your account. The private key is what you use to sign transactions and is similar to a fingerprint. When you execute a transaction or trigger a smart contract, the computer that runs the Ethereum blockchain calculates a ‘gas price’ based on how much data you’re sending and whether it requires complex calculations or not. The higher the complexity, the more gas is required and the larger the transaction fee.