Ethereum is an open-source, blockchain-based platform that allows developers to build and deploy decentralized applications (DApps). Ethereum's core innovation lies in the introduction of smart contracts, which are self-executing contracts running on the Ethereum Virtual Machine (EVM).
Key concepts of Ethereum include:
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Blockchain Technology: Ethereum uses blockchain as the underlying technology, where all transactions and smart contract executions are recorded on an immutable distributed ledger.
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Smart Contracts: Smart contracts are programs stored on the blockchain that automatically execute when predefined conditions are met. Ethereum's smart contracts are written in programming languages like Solidity.
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Ethereum Virtual Machine (EVM): The EVM is Ethereum's runtime environment responsible for executing smart contract code. It is a Turing-complete virtual machine.
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Ether (ETH): Ethereum's native cryptocurrency used to pay transaction fees (Gas fees) and incentivize miners/validators.
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Decentralized Applications (DApps): Applications built on the Ethereum blockchain that run on peer-to-peer networks without relying on central servers.
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Gas Mechanism: Ethereum uses Gas to measure the computational resources required to execute operations. Each operation has a fixed Gas cost, and users pay Gas fees in ETH.
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Consensus Mechanism: Ethereum initially used Proof of Work (PoW) and has transitioned to Proof of Stake (PoS) consensus mechanism, improving energy efficiency and security.
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Account Model: Ethereum has two types of accounts: Externally Owned Accounts (EOA) and Contract Accounts. EOAs are controlled by private keys, while contract accounts are controlled by smart contract code.
Ethereum's main features include programmability, decentralization, security, and transparency, making it the preferred platform for building Web3 applications and DeFi protocols.