Ethereum (ETH) is the second-largest cryptocurrency by market capitalization, after Bitcoin. It's not just a digital currency, but a decentralized platform that enables the creation of smart contracts and decentralized applications (dApps).
Here's a simplified explanation:
*Key features:*
1. *Decentralized platform*: Ethereum is a decentralized network, meaning that it's not controlled by any single entity.
2. *Smart contracts*: Ethereum allows for the creation of self-executing contracts with the terms of the agreement written directly into code.
3. *Decentralized applications (dApps)*: Ethereum enables the development of decentralized applications, such as social media platforms, games, and more.
4. *Ether (ETH)*: Ether is the native cryptocurrency of the Ethereum network, used to pay for transaction fees, computational services, and as a form of payment.
*How it works:*
1. *Mining*: New Ether coins are created through a process called mining, which involves solving complex mathematical problems.
2. *Transactions*: When a user sends Ether to another user, the transaction is verified by nodes on the network and added to a public ledger called the blockchain.
3. *Smart contract execution*: When a smart contract is executed, the code is run on the Ethereum Virtual Machine (EVM), which ensures that the contract is executed as intended.
*Use cases:*
1. *Decentralized finance (DeFi)*: Ethereum is used in various DeFi applications, such as lending, borrowing, and trading.
2. *Non-fungible tokens (NFTs)*: Ethereum is used to create and trade unique digital assets, such as art and collectibles.
3. *Gaming*: Ethereum is used in various blockchain-based games, such as decentralized poker and virtual worlds.
