Ethereum is an open-source, decentralized blockchain that can change the way the internet works. It features a general-purpose computing architecture with a decentralized ledger, as well as its own cryptocurrency, Ether. The Ethereum network also supports a variety of other cryptocurrencies and decentralized smart contracts. Ethereum is an open-source platform and anyone can run a node to participate in the network. The nodes synchronize with one another to update the Ethereum blockchain.
Despite the numerous benefits of Ethereum, there are still some drawbacks that limit its potential. For one thing, the system’s decentralized architecture makes it difficult to scale. In addition, the PoW consensus algorithm limits the interaction among users. As such, some investors warn that Ethereum might be facing a downturn as Bitcoin regains its undisputed dominance.
Another advantage of Ethereum is that it is open-source, meaning anyone can build on top of it. Users can purchase Ether and use it to pay for services on the network. Alternatively, they can mine the token to use in decentralized applications. This means that the community is in control and prevents bad actors from taking over. A person with ill intentions would need to control 51% of the network in order to make any changes.
The Ethereum network has also undergone several hard forks. The Ice Age hard fork introduced an exponential increase in difficulty, while the Homestead hard fork launched in March 2016. In September 2016, the DAO contract was hacked, resulting in a split between Ethereum Classic. As the Ethereum community grew, new ideas began to emerge that are decentralized. The DAO, for example, was created in 2016, backed by a smart contract. It circumvented the need for a CEO of Ethereum and allowed its users to vote on what to do on the network.