Ethereum is an public open-source distributed computing platform based on blockchain technology. Ethereum allows developers to execute distributed applications running on top of a global network of public nodes.
Ethereum ignores the traditional client-server model and proposes a distributed network where nodes run by “volunteers” replace traditional servers or cloud platforms for offering computational services.
Ethereum takes bitcoin blockchain as a reference and makes an abstraction of its design in order to enable additional applications and services to run in the blockchain, besides payment.
These services run in a distributed environment running on top of Ethereum network, called Ethereum Virtual Machine (EVM). This way, a larger set of applications can be run on top of a single blockchain network - Ethereum - , payment being only one of them. These applications are called decentralized applications, or Dapps.
The advantages of using Ethereum blockchain as platform to run applications are directly related to its distributed nature: Data cannot be changed by a third-party, since it is public for all the nodes. Because of the same reason, there is not a single point of failure, increasing the robustness of the network against some sort of attacks. Being a distributed network based on consensus algorithms, makes censorship efforts by a central authority almost futile.
Still, Ethereum also presents a series of risks and challenges. Distributed applications running on the blockchain network are written by developers so they are as susceptible to errors or bugs as traditional applications.
Despite being a public network, Ethereum is not free, and it requires the payment of a quantity in order to use its computational resources, or in other words, for the nodes to execute the intended code. The cryptocurrency used for these payments is called ether.
Ether (ETH) is a cryptocurrency for users to make payments for services or products, for investors to trade with, but also is used by developers to pay for services and computing resources on Ethereum blockchain network.
Smart contracts are the way Ethereum blockchain organizes its computational tasks. A smart contract is a piece of computer code that defines the exchange of content, money, property, etc. As an example, a smart contact for a payment between two parties could be automatically managed, executed, enforced and it could also execute the associated payment by itself after certain conditions are met.
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