Ethereum is a blockchain or open-source platform for decentralized applications.
Ethereum is a global, decentralized platform for money and new kinds of applications. On Ethereum, you can write code that controls the money, and build applications accessible anywhere in the world.
Software developers can write smart contracts that control digital value.
What is a Smart contract?
A smart contract is a self-executing digital agreement that enables two or more parties to exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the need for a third party.
Simple Analogy
Alice wants to set up a trust fund to pay Bob $100 for one year, she can program a smart contract
That will check the current date, and send Bob $100 automatically at the start of every month, this process will continue for one year.
Alice doesn’t have to trust any third party be it banks, agents, etc).
Ether(ETH)?
Ether is the native currency of the Ethereum blockchain.
Ethers' main purpose is to pay fees on the Ethereum blockchain, this is like the fuel that drives your car, so to execute a smart contract on the Ethereum blockchain you need gas fees, this Gas fee drives the smart contract.
Ether can also be used for everyday transactions on the blockchain
What Is Gas?
On Ethereum, all transactions and smart contract executions require a small fee to be paid.
This fee is called gas. The more complex a smart contract, the more gas is needed to drive the operation.
Users may set gas fees manually when the Ethereum network gets congested due to high usage, Miners will prioritize transactions with the highest gas fees.
If a gas fee is too low, the transactions will be queued, taking much longer to complete.
How to calculate and Convert Gas fees
Gas price is denoted in gwei
1 gwei = 0.000000001 10^8 ether,
For example, if you want to transfer a token from your wallet to another wallet and the Smart contract execution to transfer the token requires 25,000 gas units.
Assuming the average market rate for the gas price is 3 gwei
The above will look like this
25,000 gas * 3 gwei = 75,000 gwei
Convert from gwei to ether
1 gwei = 0.000000001 ether
So, 75,000 gwei = 75,000 * 0.000000001 (ether)
= 0.000075 ether.
What are Decentralized Applications (Dapps)?
Dapps are like regular web and mobile applications, but they interact with a blockchain and also use smart contracts for executions.
Dapps can store data on the blockchain, they have the following advantages
1)Availability: Dapps will continue to run provided the Ethereum network remains active.
2) Tamper-proof: Smart contracts published onto the blockchain
cannot be tampered with without alerting the entire system.
3) Immutability: Nobody can change any information once it's on the blockchain.
4)Transparency: Every smart contracts powered by Dapps are openly auditable.
Disadvantages of Dapps?
Immutability: Smart contracts are written by humans and could result in countless mistakes, that could lead to big trouble.
Transparency: Smart contracts can be attacked by hackers since it is auditable, hackers can review the codes to find exploits.
Scalability: Many Dapps are can not support an increase in load transactions.
DAO Decentralized Autonomous Organizations (DAO)
This is an autonomous organization that is not governed by a single person but governed through code.
This type of organization will be protected from human intervention and will operate transparently.
Tokens ‘
Ethereum can also be used as a platform to create other cryptocurrencies, there are two protocols that ERC-20 create tokens that can be interchangeable(fungible) while ERC-721 tokens are non-fungible, meaning they are non-interchangeable(Non-fungible) eg (NFT’S).
My name is Maakai Princewill a DeFi content creator
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