Ethereum - ETH
At its core, Ethereum is a decentralized global software platform powered by blockchain technology. It is most commonly known for its native cryptocurrency, ether, or ETH. Ethereum can be used by anyone to create any secured digital technology they can think of. It has a token designed for use in the blockchain network, but it can also be used by participants as a method to pay for work done on the blockchain.
Ethereum is designed to be scalable, programmable, secure, and decentralized. It is the blockchain of choice for developers and enterprises, who are creating technology based upon it to change the way many industries operate and the way we go about our daily lives.
It natively supports smart contracts, which are the essential tool behind decentralized applications. Many decentralized finance (DeFi) and other applications use smart contracts in conjunction with blockchain technology.
Learn more about Ethereum, its token ETH, and how they are an integral part of non-fungible tokens, decentralized finance, decentralized autonomous organizations, and the metaverse.
Consensus is reached using a protocol referred to as a consensus mechanism. Ethereum uses the proof-of-work protocol, where a network of participants runs software that attempts to prove that an encrypted number is valid.11 This is called mining, and the first miner to prove the number is rewarded in ether. A new block is opened on the blockchain, information from the previous block is encrypted and placed into the new block along with new data, and the mining process begins again.
At some point, Ethereum will be moving to another consensus protocol called proof-of-stake, where ETH owners "stake" their ether. Staking ether keeps it from being used in transactions and works as an incentive—it is used as collateral for the privilege of mining. Mining will work differently under this protocol because it won't require everyone on the network to compete for the rewards. Instead, the protocol will randomly choose users with staked ether to verify the transactions. These validators are then rewarded in ether for their work. Ethereum owners use wallets to "store" their ether. Essentially, a wallet is a digital interface that lets you access your ether stored on the blockchain. Your wallet has an address, which is similar to an email address in that it is where users send ether, much like they would an email. Ether is not actually stored in your wallet. Your wallet holds private keys you use like you would use a password when you initiate a transaction. You receive a private key for each ether you own. This key is essential for accessing your ether, which is why you may hear so much about securing them using different storage methods.