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Ethereum's blockchain is a powerful decentralized platform, designed to run smart contracts - self-executing contracts with the terms directly written into code. This makes Ethereum much more than just a cryptocurrency; it's a platform for creating and running applications without any possibility of downtime, censorship, fraud, or third-party interference. Smart contracts on Ethereum execute functions when predetermined conditions are met. They enable a wide range of decentralized applications, from simple token exchange apps to complex decentralized autonomous organizations (DAOs). The Ethereum network uses its own cryptocurrency, Ether (ETH), as the fuel to execute these smart contracts. This system, known as "gas", ensures that resources on the network are used efficiently, and helps to prevent spam. Just like Bitcoin's blockchain, Ethereum is maintained by a network of nodes that validate and record transactions. However, Ethereum has its own unique consensus mechanism called "Ethash", a Proof-of-Work (PoW) algorithm specifically designed for Ethereum. Ethereum also supports the creation of decentralized tokens through standards like ERC-20 and ERC-721. These standards have led to a wave of new digital assets and have been instrumental in the ICO (Initial Coin Offering) crowdfunding model. In terms of security, Ethereum has been designed to be resilient against potential attacks. Smart contracts can be audited and formally verified to ensure they behave as expected, and the decentralized nature of the network helps protect against common attacks. Ethereum also includes the Ethereum Virtual Machine (EVM), which is the runtime environment for smart contracts in Ethereum. It provides security and isolation from the main network while executing the smart contracts. The Ethereum platform also includes "decentralized autonomous organizations" (DAOs). DAOs are fully automated business entities that operate completely transparently and without any human intervention. The Ethereum platform is continually evolving. Ethereum 2.0, also known as Serenity, is a major upgrade planned for the Ethereum network that will shift its consensus mechanism from PoW to Proof-of-Stake (PoS) to improve scalability and energy efficiency. In summary, Ethereum’s blockchain technology represents a significant advancement in the realm of distributed systems. It has introduced concepts like smart contracts and dApps, paving the way for widespread blockchain adoption across various sectors.
