What Is Ethereum?
Ethereum is a decentralized global software platform powered by blockchain technology. It is most commonly known by investors for its native cryptocurrency, Ether (ETH), and by developers for its use in blockchain and decentralized finance application development.Anyone can use Ethereum—it's designed to be scalable, programmable, secure, and decentralized—to create any secured digital technology. Its token is designed to pay for work done supporting the blockchain, but participants can also use it to pay for tangible goods and services if accepted.
How Does Ethereum Work?
There are three step to follow the etherum blockchain:-
1.Blockchain Technology
2.Proof-Of-Stake Validation Process
3.Wallets
Blockchain Technology
Ethereum uses a blockchain, which is a distributed ledger (like a database). Information is stored in blocks, each containing encoded data from the block before it and the new information. This creates an encoded chain of information that cannot be changed. Throughout the blockchain network, an identical copy of the blockchain is distributed. Once a new block is proposed, it is validated by a network of automated programs that reach a consensus on the validity of transaction information. On the Ethereum blockchain, consensus is reached after the data and hash are passed between the consensus layer and the execution layer. Enough validators must demonstrate that they all had the same comparative results, and the block becomes finalized. Each cell, or block, is created with new ether tokens awarded to the validator for the work required to validate the information in one block and propose a new one. The ether is assigned to the validator's address.
Proof-Of-Stake Validation Process
Proof-of-stake differs from proof-of-work in that it doesn't require the energy-intensive computing referred to as mining to validate blocks. It uses a finalization protocol called Casper-FFG and the algorithm LMD Ghost, combined into a consensus mechanism called Gasper. Gasper monitors consensus and defines how validators receive rewards for work or are punished for dishonesty or lack of activity. Solo validators must stake 32 ETH to activate their validation ability. Individuals can stake smaller amounts of ETH, but they are required to join a validation pool and share any rewards. A validator creates a new block and attests that the information is valid in a process called attestation. The block is broadcast to other validators called a committee, which verifies it and votes for its validity.
Validators who act dishonestly are punished under proof-of-stake. Those who attempt to attack the network are identified by Gasper, which flags the blocks to accept and reject based on the validators' votes. Dishonest validators are punished by having their staked ETH burned and removed from the network. "Burning" is the term for sending crypto to a wallet without private keys, effectively taking it out of circulation.
Wallets
Ethereum owners use wallets to store their ether keys. A wallet is a digital interface that lets you access your cryptocurrency. Your wallet has an address, which can be thought of as an email address in that it is where users send ether, much like they would an email. Ether is not stored in your wallet. Your wallet holds private keys you use as you would 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—you can't use it without it. That's why you hear so much about securing keys using different storage methods.