1. What is Ethereum? What can Ethereum do?
Simply put, Ethereum is similar to the blockchain version of Android and iOS, a blockchain APP platform. Ethereum is a global open source platform for decentralized applications (DApp). The name comes from Ether (Ether) and the suffix ruem (Greek meaning "oil"), and early community members in China translated it into "Ethereum".
Ethereum is a decentralized, self-consistent economic system that can run transferable computing and data. It is a decentralized blockchain platform for building decentralized applications (DApps). Ether is the cryptocurrency used by the platform.
Ethereum makes it easy to create smart contracts, self-executing codes that developers can use to handle a variety of applications.
Ethereum can be used for almost any type of transaction or agreement at a lower cost than traditional alternatives, such as bank card payments, PayPal, and voting, and it does so in a decentralized, trustless (no intermediaries required), secure, efficient, and censorship-resistant manner.
Ethereum has been recognized by developers and giants for its unique programmable design. To date, there are thousands of Ethereum-based apps and digital currencies around the world. In 2017, more than 20 well-known companies represented by JPMorgan Chase, Microsoft, and Intel even jointly established the "Enterprise Ethereum Alliance". To date, more than 150 companies and institutions have joined this alliance.
2. What is the value of Ethereum?
Ethereum is more useful than just a cryptocurrency. Through Ethereum, users can create any decentralized applications (DApps) and smart contracts. In theory, programmable Ethereum can be used for any economic or governance activities.
On Ethereum, you can manage digital assets and run programs by writing code, and more importantly, all of this is not restricted by geography.
Ethereum opens a door to the global financial system, allowing users to access applications, products and services in a trustless manner simply through the Internet. Everyone can interact with the Ethereum network and participate in this form of digital economy in person without the need for a third party.
People can use smart contracts to crowdfund projects, companies can use smart contracts on blockchain to issue stocks, banks and other financial institutions can use it to manage loan payments and receipts, insurance companies can use it to implement automatic claims, and so on. Even any real financial transactions can be transformed and conducted on the blockchain. These are all thanks to the blockchain.
Through governance applications and systems on the Ethereum platform, it may even be possible to eliminate barriers between countries caused by borders and create a more open, inclusive, and fair human society.
3. How does Ethereum work?
The structure of the Ethereum blockchain is very similar to Bitcoin in that it is a shared record of the entire transaction history. Every node on the network stores a copy of this history.
The biggest difference between Ethereum and Bitcoin is that, in addition to all Ethereum transactions, its nodes also store the latest state of each smart contract. For each Ethereum application, the network needs to track the "state" or the current information of all these applications, including each user's balance, all smart contract codes and where they are stored, etc.