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. Due to its basic computational capability, Ethereum can perform computations as part of the mining process as well as turn a store of value and medium of exchange into a decentralized worldwide computing engine and openly verifiable data store.
Notably, in addition to tracking ownership of digital currency, Ethereum also focuses on running the programming code of a range of decentralized applications (dApps). It also allows developers to raise funds for their own applications.
One of the key features of Ethereum is gas – a unit that measures the amount of computational effort required to execute specific operations on the Ethereum network. This determines the costs of transactions that depend on bandwidth usage, storage requirements, and complexity.
Ether is a necessary element for operating the Ethereum platform. It is a form of payment made by the clients of the platform to the machines executing the requested operations. To put it another way, Ether is the incentive ensuring that developers write quality applications (wasteful code costs more) and that the network remains healthy (people are compensated for their contributed resources).
Ethereum describes itself as “the world’s programmable blockchain.” Launched back in 2015 by Vitalik Buterin and Joe Lubin, it has become the second cryptocurrency in terms of popularity and market cap, surpassed only by Bitcoin.
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