What is Ethereum and how does it work?

Ethereum is a decentralized computing platform. It generates a crytocurrency token known as Ether. Programmers can write “smart contracts” on the Ethereum blockchain, and these contracts are automatically executed according to their code. What is Ethereum? Ethereum is often mentioned in the same breath as Bitcoin, but it’s rather different.

Is Ethereum compatible with other cryptocurrencies?

In addition to smart contracts, Ethereum’s blockchain is able to host other cryptocurrencies, called “tokens,” through the use of its ERC-20 compatibility standard. In fact, this has been the most common use for the ETH platform so far: to date, more than 280,000 ERC-20-compliant tokens have been launched.

How does consensus work in Ethereum?

Consensus is reached using an algorithm commonly called a consensus mechanism. Ethereum uses the proof-of-stake algorithm, where a network of participants called validators create new blocks and work together to verify the information they contain.

What can ETH do?

There are many cryptocurrencies and lots of other tokens on Ethereum, but there are some things that only ETH can do. ETH is the lifeblood of Ethereum. When you send ETH or use an Ethereum application, you'll pay a fee in ETH to use the Ethereum network.