What is the Ethereum?
Ethereum is considered a very broad programming platform where a developer can build games, financial applications, gambling apps, create insurance companies, social networks, and pretty much everything we already use today. However, Ethereum is run off a decentralized system which means there is no main authority holding all the information that’s used to create those applications.
Ethereum is a decentralized, peer-to-peer system for everything!
What is the Blockchain?
The blockchain is a ledger that contains a secure record of every transaction that has taken place within a system.
The blockchain is considered a public ledger of all actions that are executed through the Ethereum technology. What the blockchain actually looks like to the naked eye, is a random string of numbers and letters which can seem very confusing. To put more simply, imagine a literal chain of wooden blocks that a child may play with. As each transaction or action that takes place within this blockchain, (ex. purchases, contract agreements, record storage, etc.) new blocks are added to this linear chain. The blockchain is constantly growing as these ‘completed’ blocks are added.
What are Smart Contracts?
A Smart Contract is an electronic agreement that’s made through, and works on, the blockchain. Smart Contracts allow users to solve common problems in a way that minimizes trust.
Smart Contracts ensure that contracts are fullfilled transparently and securely.
What are DAPPS?
DAPPS are powered by many people and computers, rather than one entity.
A Dapp is a conjunction of the words ‘decentralized application’. Regular apps require a user login which collects all of your personal identity information (ex. name, birthdate, address, etc.). However, Dapps can work off the blockchain to function and simply require a private address, (which is a random string of characters that holds no personal information), for users to login.
Dapps are critical because they can be used to connect buyers and sellers in marketplaces, for sharing or storing files, maintaining a virtual currency, and executing smart contracts all in a system devoid of complete censorship.
What is the Ether?
Ether is the fuel to facilitate all actions that are made in Ethereum. These actions are vital to creating Smart Contracts and Dapps.
Simply put, if your mail was a Dapp or Smart Contract, you would still need to pay the postage to send that mail. Ether is the payment facilitator to make sure your Dapps work and your Smart Contracts are executed.
Ether is to the Ethereum platform as a postage stamp is to the mail service.
What is Mining?
Mining allows people to help power the Ethereum system, and receive Ether in return.
In order for the entire Ethereum platform to work, it needs Ether. This is a cryptocurrency, also called virtual currency, and is commonly referred to as a token that allows Dapps, Smart Contracts, and other activity that occurs on the blockchain to work. Similar to the old west currency of gold and silver, Ether (which is Ethereum’s currency) is obtained through a system referred to as mining.
What are Exchanges?
Exchanges are where Ether and the many fiat and crypto currencies are traded for one another.
An exchange is a marketplace where users may purchase, sell, or trade their Ether. These exchanges may be a physical location where traders meet to conduct business or an electronic platform, such as a website. Most Ether and virtual currency exchanges are conducted through online platforms.
What are Wallets?
A wallet holds your Ether.
An Ether wallet is similar to an account. Just like a bank account, they’re used for holding, storing, and transferring Ether. Wallets can be used online or offline. Wallet providers are entities or businesses that provide these wallets through a software application or other mechanism, such as paper or hardware.