Characteristics[edit]

Ethereum is a permissionless, non-hierarchical network of computers (nodes) which build and come to
consensus on an ever-growing series of "blocks", or batches of transactions, known as the blockchain.
Each block contains an identifier of the block that it must immediately follow in the chain if it is to be
considered valid. Whenever a node adds a block to its chain, it executes the transactions therein in their
order, thereby altering the ETH balances and other storage values of Ethereum accounts. These balances
and values, collectively known as the state, are maintained on the node's computer separately from the
blockchain, in a Merkle Patricia tree.

Each node communicates with a relatively small subset of the network, known as its peers. Whenever a
node wishes to include a new transaction in the blockchain, it sends it to its peers, who then send it to
their peers, and so on. In this way, it propagates throughout the network. Certain nodes, called miners,
maintain a list of all of these new transactions and use them to create new blocks, which they then send
to the rest of the network. Whenever a node receives a block, it checks the validity of the block and of all
of the transactions therein and, if valid, adds it to its blockchain and executes all of said transactions. As
the network is non-hierarchical, a node may receive competing blocks, which may form competing
chains. The network comes to consensus on the blockchain by following the "longest chain rule", which
states that the chain with the most blocks at any given time is the canonical chain. This rule achieves
consensus because miners do not want to expend their computational work trying to add blocks to a
chain that will be abandoned by the network.

Ether[edit]
Ether (ETH) is the cryptocurrency generated by the Ethereum protocol as a reward to miners in a proof of
work system for adding blocks to the blockchain. It is the only currency accepted in the payment of
transaction fees, which also go to miners. The block reward together with the transaction fees provide
the incentive to miners to keep the blockchain growing (ie. to keep processing new transactions).
Therefore, Ether is fundamental to the operation of the network. Each Ethereum account has an ETH
balance and may send ETH to any other account. The smallest unit of ETH is known as a Wei and is equal
to 10-18 ETH. [40]

Ether is listed on exchanges under the ticker symbol ETH. The Greek uppercase Xi character (Ξ) is
sometimes used for its currency symbol.

Addresses[edit]
Ethereum addresses are composed of the prefix "0x", a common identifier for hexadecimal, concatenated
with the rightmost 20 bytes of the Keccak-256 hash of the ECDSA public key (the curve used is the so-
called secp256k1, the same as Bitcoin). In hexadecimal, 2 digits represent a byte, meaning addresses
contain 40 hexadecimal digits, e.g. 0xb794f5ea0ba39494ce839613fffba74279579268. Contract addresses
are in the same format, however, they are determined by sender and creation transaction nonce. [41] User
accounts are indistinguishable from contract accounts in their address format and are used to receive
both Ether and ERC-20 tokens. Any valid Keccak-256 hash put into the described format is valid, even if it
does not correspond to an account with a private key or a contract. This is unlike Bitcoin, which
uses base58check to ensure that addresses are properly typed.[clarification needed]

ERC-20 Tokens[edit]
The ERC-20 Token Standard allows for fungible tokens on the Ethereum blockchain. Once implemented,
tokens appear as contract addresses. Numerous cryptocurrencies have launched as ERC-20 tokens and
have been distributed through initial coin offerings.[42] Fees to send ERC-20 tokens must be paid with
Ether.

Gas[edit]
Gas is a unit of account within the EVM used in the calculation of a transaction fee, which is the amount
of ETH a transaction's sender must pay to the miner who includes the transaction in the blockchain.

Each type of operation which may be performed by the EVM is hardcoded with a certain gas cost, which
is intended to be roughly proportional to the amount of resources (computation and storage) a node
must expend to perform that operation. When creating a transaction, the sender must specify a gas
limit and gas price. The gas limit is the maximum amount of gas the sender is willing to use in the
transaction, and the gas price is the amount of ETH the sender wishes to pay to the miner per unit of gas
used. The higher the gas price, the more incentive a miner has to include the transaction in their block,
and thus the quicker the transaction will be included in the blockchain. For a transaction to be valid, the
sender's starting ETH balance must be greater than or equal to gas limit × gas price. The sender buys the
full amount of gas (ie. the gas limit) up-front, at the start of the execution of the transaction, and is
refunded at the end for any gas not used. If at any point the transaction does not have enough gas to
perform the next operation, the transaction is reverted but the sender still pays for the gas used. Gas
prices are typically denominated in Gwei, a subunit of ETH equal to 10-9 ETH.[43]

This fee mechanism is designed to mitigate transaction spam, prevent infinite loops during contract
execution, and provide for a market-based allocation of network resources.

Comparison to Bitcoin[edit]
Ethereum is different from Bitcoin, the cryptocurrency with the largest market capitalization as of 2020,
in several aspects:[44][45]

Bitcoin is a singular form of digital money where users can send, receive, and hold only bitcoins.
Ethereum is a smart contract platform which allows entities to leverage blockchain technology to create
numerous different digital ledgers and can be used to create additional cryptocurrencies that run on top
of its blockchain. For example, Ethereum can be used to create tokens that are pegged 1:1 with the value
of the United States dollar (called a stablecoin) if a user wanted to transfer or hold the value of dollars on
the blockchain. Ether itself can also be sent, received and held as digital money.

Bitcoin is aimed to only be money, compared with Ethereum where a goal is to also run applications (like
the Google Play or Apple App store).

Its block time is 13 seconds, compared to 10 minutes for bitcoin.

Mining of Ether generates new coins at a usually consistent rate, occasionally changing during hard forks,
while for bitcoin the rate halves every 4 years.

For proof of work (PoW), it uses the Ethash algorithm which reduces the advantage of specialized ASICs in

Transaction fees differ by computational complexity, bandwidth use, and storage needs (in a system
known as gas), while bitcoin transactions compete by means of transaction size in bytes.

Ethereum uses an accounting system where values in Wei (the smallest denomination of 1 Ether, 1 ETH =
1018 Wei) are debited from accounts and credited to another, as opposed to Bitcoin's UTXO system, which
is more analogous to spending cash and receiving change in return.

Supply[edit]
The total supply of Ether was around 110.5 million as of 16 April 2020. In 2017, mining generated 9.2
million new Ether, corresponding to a 10% increase in its total supply. The shift to Ethereum 2.0 may curb
the total supply of Ether.[46] There is currently no implemented hard cap on the total supply of Ether.[47]

Governance[edit]
On social governance

Our governance is inherently social, people who are more connected in the community have more power, a kind of soft
power.

Vlad Zamfir, Ethereum core developer, The New Yorker[17]

In October 2015,[48] a development governance was proposed as the Ethereum Improvement Proposal
(EIP), standardized on EIP-1.[49] The core development group and community were to gain consensus by a
process regulated EIP.[50][51]

Difficulty bomb[edit]
The difficulty bomb is a mechanism where the difficulty of blockchain mining began increasing in
November 2016, from block 200,000. This onset is referred to as Ethereum's Ice Age, which was
implemented as an incentive for the network to transition from a PoW to a PoS blockchain. A difficulty
bomb was scheduled in February 2019 but was pushed back by developers. [52]

Markets and stores[edit]

Source : Wiki