Ethereum Guide
Ethereum
Ethereum is a decentralized, open-source blockchain platform that allows developers to build and deploy smart contracts and decentralized applications (dApps). Created by Vitalik Buterin in 2015, it aims to extend blockchain functionality beyond simple peer-to-peer transactions.
Ether (ETH)
Ether (ETH) is the native cryptocurrency of the Ethereum network. It is used to pay for transaction fees and computational services on the platform. ETH also serves as a store of value and can be staked for rewards in Ethereum’s Proof of Stake consensus mechanism.
Smart Contracts
Smart contracts are self-executing contracts with the terms of the agreement directly written into code. They automatically enforce rules and conditions without intermediaries, enabling decentralized applications (dApps) to function on Ethereum.
Decentralized Applications (dApps)
dApps are applications built on decentralized networks like Ethereum. They rely on smart contracts to perform operations without the need for a central authority. Popular dApps include decentralized finance (DeFi) platforms, NFT marketplaces, and gaming applications.
Ethereum Virtual Machine (EVM)
The Ethereum Virtual Machine (EVM) is the runtime environment that executes smart contracts on the Ethereum network. It allows developers to write applications in various programming languages, such as Solidity, and ensures that all Ethereum nodes can run the same code.
Gas
Gas refers to the fee required to perform transactions or execute smart contracts on the Ethereum network. Gas is measured in small units of Ether (gwei), and its price fluctuates based on network congestion and the computational power needed for a specific operation.
Proof of Stake (PoS)
Ethereum transitioned from Proof of Work (PoW) to Proof of Stake (PoS) with Ethereum 2.0. In PoS, validators are selected to propose and validate blocks based on the amount of ETH they have staked, which reduces the energy consumption required to secure the network.
Layer 2 Scaling
Layer 2 solutions on Ethereum aim to improve the scalability of the network by processing transactions off-chain or bundling them together before submitting them to the main Ethereum chain. Examples include Optimistic Rollups and zk-Rollups, which reduce congestion and fees.
ERC-20 Token
ERC-20 is the standard for creating fungible tokens on the Ethereum blockchain. It defines a set of rules that tokens must follow, enabling compatibility with various decentralized applications, wallets, and exchanges within the Ethereum ecosystem.
Ethereum 2.0
Ethereum 2.0 (Eth2) is a major upgrade to the Ethereum network that aims to improve scalability, security, and energy efficiency. The key features of Ethereum 2.0 include the switch to Proof of Stake, shard chains, and enhanced performance for running dApps.
