Cryptocurrencies have taken the financial world by storm in recent years, and one of the most popular and widely used among them is Bitcoin. However, Bitcoin isn't the only cryptocurrency out there. In fact, there are several other cryptocurrencies that are quickly gaining popularity and attention, and Ethereum is one of them. Ethereum is a blockchain-based decentralized platform that allows developers to build and deploy decentralized applications. In this article, we will explore what Ethereum is, how it works, and why it has become the right hand of Bitcoin. What is Ethereum? Ethereum is an open-source blockchain-based decentralized platform that allows developers to build and deploy decentralized applications (dApps). Ethereum was proposed in 2013 by Vitalik Buterin, a cryptocurrency researcher and programmer. Ethereum's main goal is to become the world's computer by providing a platform for developers to build decentralized applications that can be used by anyone, anywhere in the world. Ethereum's blockchain technology is similar to Bitcoin's in that it is a distributed ledger that records all transactions on the network. However, Ethereum's blockchain has additional features that enable developers to build decentralized applications. These features include the ability to create and execute smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code.
How does Ethereum work? Ethereum works by using a decentralized network of computers to process and verify transactions on the blockchain. These computers, also known as nodes, work together to maintain the integrity and security of the network. Ethereum's blockchain is made up of blocks, which are groups of transactions that are verified and added to the blockchain by nodes. Each block contains a reference to the previous block, creating a chain of blocks (hence the name blockchain). Ethereum's blockchain uses a consensus mechanism called proof-of-work (PoW) to validate transactions and add new blocks to the chain. In PoW, nodes on the network compete to solve a complex mathematical puzzle, and the first node to solve the puzzle is rewarded with new Ethereum tokens. This process is known as mining and is how new Ethereum tokens are created. In addition to PoW, Ethereum is in the process of transitioning to a new consensus mechanism called proof-of-stake (PoS). In PoS, nodes are chosen to validate transactions and create new blocks based on the amount of Ethereum tokens they hold (i.e., their stake). This transition to PoS is expected to make the network more efficient and environmentally friendly. Why has Ethereum become the right hand of Bitcoin? While Bitcoin is the most well-known and widely used cryptocurrency, Ethereum has become the right hand of Bitcoin due to its unique features and capabilities. Here are a few reasons why Ethereum has become such an important cryptocurrency: Decentralized applications Ethereum's main goal is to provide a platform for developers to build decentralized applications that can be used by anyone, anywhere in the world. These decentralized applications have the potential to disrupt many industries, including finance, gaming, social media, and more. Smart contracts Ethereum's smart contracts allow developers to create self-executing contracts that are transparent, secure, and enforceable. Smart contracts have the potential to revolutionize many industries, including real estate, insurance, and supply chain management. Interoperability Ethereum is designed to be interoperable with other blockchain networks, meaning that it can communicate and exchange data with other networks. This interoperability enables developers to build more complex and powerful decentralized applications. The Ethereum community The Ethereum community is one of the most active and engaged communities in the cryptocurrency world. The community is made up of developers, entrepreneurs, investors, and enthusiasts who are all working to build and improve the Ethereum