Ether doesn\u2019t really exist, but the founder liked the cool name AND the idea of an underlying and invisible medium for every application.<\/p>\n\n\n\n
How the heck can Ethereum do that?!<\/p>\n\n\n\n
To put it simply, it does so by allowing applications to run over a distributed<\/strong> network of computers, that would act as a kind of a \u201cglobal computer\u201d.<\/p>\n\n\n\n Not only would this network of computers run applications, but it\u2019d also keep track of any changes to data<\/strong> that were made by the applications by creating an electronic version of a \u201cpaper trail\u201d that\u2019s p\u00fablico<\/strong> for all to see, yet secure<\/strong>.<\/p>\n\n\n\n Say whu?! Huh?!<\/p>\n\n\n\n Thatt may sound like gibberish to some of you, but don\u2019t worry because we\u2019ll talk more about how Ethereum works. But first, we gotta go back to the basics and talk about blockchain technology.<\/p>\n\n\n\n A blockchain<\/strong> is a public database that stores information in groups known as \u201cblocks\u201d.<\/p>\n\n\n\n The blocks are arranged in chains so that the public will know which transactions came first.<\/p>\n\n\n\n Only a dedicated (but distributed) network of computers can add new transaction blocks. They use cryptography to make sure transactions are legit and to check if the nameless blockmaker is building on the same chain that everybody else is seeing.<\/p>\n\n\n\n The use of cryptography in verifying transactions and building the blockchain makes the chain secure<\/strong> y immutable<\/strong>. \u201cImmutable\u201d basically means that no one \u2013 not even John Cena or Doctor Strange \u2013 can change the record of transactions on the blockchain.<\/p>\n\n\n\n The distributed nature of the computers that build the blockchain allows the ledger to be decentralized. That is, no single authority can make changes to the blockchain.<\/p>\n\n\n\n Again, not even John Cena. Sad.<\/p>\n\n\n\n Because all participating computers keep the same updated copy of the ledger, information on the blockchain is also open and transparent<\/strong> to anyone who would want to take a look.<\/p>\n\n\n\n These blockchain features come in handy when applications need a trustless vehicle to execute transactions that may involve important documents, digital assets, or just a lot of $$$.<\/p>\n\n\n\n Let\u2019s say you want to send money to a friend who\u2019s buying the latest hot Air Jordan sneaker release for you since they\u2019re sold out in your city.<\/p>\n\n\n\n You can send your friend the money with a bank, but it could take hours or days to verify the transfer. The store could run out of your shoe size by then!<\/p>\n\n\n\n You can also use an app but storing $$$ in a centralized app makes your account vulnerable to a hacker draining all your funds. Or the app freezing your account because you posted #TeamPineappleOnPizza on your social media.<\/p>\n\n\n\n If you transfer the money using blockchain technology, no one can stop you from spending your own money and it would reach your friend faster than if you had waited for traditional banks to confirm. Finally, your friend can verify that you\u2019ve made the transfer on a public and secure ledger.<\/p>\n\n\n\n To understand how blockchain works, let\u2019s look at its OG real-world working example: Bitcoin<\/a>.<\/p>\n\n\n\n Bitcoin is widely known as a digital currency that allows people to send and receive funds globally, without relying on financial institutions or middlemen.<\/p>\n\n\n\n Bitcoin was designed to be an alternative to traditional fiat currencies, functioning as a \u201cmedium of exchange\u201d (something that is widely accepted in exchange for goods and services).<\/p>\n\n\n\n Instead of banks or financial institutions keeping track of transactions on their own books, these transactions are recorded on the blockchain.<\/p>\n\n\n\n![\"Global](\"https:\/\/bpcdn.co\/images\/2022\/08\/08151428\/global-computer-360x360.png\")
<\/figure>\n\n\n\nWhat is a blockchain?<\/h2>\n\n\n\n
Example: Bitcoin\u2019s Blockchain<\/h2>\n\n\n\n