How Ethereum works

How Does Ethereum Work?

Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interference. These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property.

Here’s a breakdown of how Ethereum works:

  1. Users interact with Ethereum by sending transactions to the network using their private keys. These transactions can be anything from simple currency transfers to complex smart contracts.
  2. Transactions are broadcast to the network and collected by “miners”, who use powerful computers to validate the transactions and add them to the blockchain.
  3. Once a transaction is added to the blockchain, it is considered confirmed and cannot be reversed. This ensures that the transaction history of the Ethereum network is tamper-proof.
  4. The Ethereum Virtual Machine (EVM) is a decentralized computer that executes smart contracts. It is run by the network of miners, who use their computers to execute the code of the smart contract.
  5. The Ethereum network charges fees for executing smart contracts, called “gas”. These fees are paid in Ethereum’s native currency, Ether.

Ethereum has the potential to revolutionize the way we interact with the internet and conduct online transactions. It’s important to keep an eye on this rapidly developing technology and understand how it works.

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