Ethereum is a decentralized, open-source blockchain system that features smart contract functionality. It is a platform upon which developers can build and deploy decentralized applications (dApps) and new cryptocurrencies.
Ethereum was proposed in 2013 by programmer Vitalik Buterin and development was crowdfunded in 2014, with the network going live on July 30, 2015. Unlike Bitcoin, which aims to be a digital currency, Ethereum is a more versatile platform that enables users to execute smart contracts and develop decentralized applications without third-party interference, fraud, or downtime.
The operation of Ethereum can be broken down into several components:
Smart contracts on Ethereum are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. These contracts run on the blockchain and automatically execute when certain conditions are met, without the need for a middleman.
While both Bitcoin and Ethereum operate on blockchain technology, Ethereum is designed to support smart contracts and decentralized applications (dApps). Bitcoin, on the other hand, was primarily created as an alternative to traditional currencies and is used as a medium of exchange and a store of value.
Ether is the native cryptocurrency of the Ethereum platform. It is used to compensate participating nodes for computations performed and to pay for transaction fees and computational services on the Ethereum network.
Yes, one of the most significant aspects of Ethereum is its ability to launch new cryptocurrencies and tokens through initial coin offerings (ICOs) or token generation events. Many tokens on the Ethereum blockchain are ERC-20 compatible and have been launched using this framework.
Ethereum 2.0 is an upcoming upgrade to the Ethereum blockchain that aims to improve scalability, security, and sustainability. This upgrade will transition the network from a proof-of-work to a proof-of-stake consensus mechanism, which uses significantly less energy and offers improved transaction speeds.
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