What is the structure of Ethereum? Ultimate Guide for Beginners Part 2

Ethereum is a platform that permits anyone to develop unstoppable, decentralized applications. If you’ve never heard of Ethereum or aren’t sure what is the use of Ethereum, I strongly advise you to read “What is Ethereum?” before delving deeper and learning how it operates in this article.

This article provides an essential and non-technical overview of Ethereum’s logic and inner mechanics. Please be aware that the explanation provided below is a concise summary of what occurs, but it should be detailed enough to help you grasp how it functions.

We can visualize Ethereum as a stack of several layers constructed on each other.

The first and most foundational layer is a vast computer network that executes transactions and keeps a common database up to date over time (the Ethereum blockchain).

The second is the software layer , which enables developers to run programs known as “smart contracts” on the Ethereum blockchain using the “Solidity” programming language.

The third layer comprises applications that provide various services to Ethereum users (from governance to identity management). The platform’s distinguishing characteristic is that leveraging the Ethereum hardware and software layers makes these apps decentralized, lack a single point of failure, and are thus “unstoppable.” You cannot turn them off.

We know that servers worldwide store all the data on the web. Your computer (client) establishes a connection to these servers when you launch a browser and browse the internet, downloading the content you need. This client-server system was designed for the internet with a few centralized repositories (servers) that would disseminate material to a large number of consumers (clients).

However, because we are all both makers and users of material, the internet today connects many clients to other clients (Web 2.0). Computers in a vast network can communicate with one another and send stuff from the computer that developed it to the computer that requested it.

A peer-to-peer computer network called the Ethereum hardware layer computes transactions and maintains their order in a shared ledger. This approach enables developers to create a distributed database that can keep track of all the information shared in the network, including all transactions. Each computer in the network is referred to as a “node,” It processes incoming transactions and groups them into blocks, which are subsequently broadcast to the whole Ethereum network. Here, you can observe how the Ethereum computer network is now handling transactions.

Transactions can include both money and information. The Ethereum platform’s digital currency is Ether, which indicates its value. And the code has data that can be passed and initiate operations. This code is relevant for Ethereum’s software layer and hardware layer. It is necessary to remember that hundreds of computers across the globe are linked to one another over the internet.

Anyone can offer their computer to handle network transactions simply by running some code on their laptop. An incentive plan supports the growth of the Ethereum network; individual host nodes are rewarded with “Ether” — a valuable asset that nodes can use to access the platform’s apps.

This structure will give you a general grasp of the Ethereum hardware layer. To learn more about how these computers coordinate their work and process transactions, you should first understand the fundamentals of blockchain technology.

2. Ethereum software layer: Solidity

The Ethereum platform’s versatility drew early Bitcoin and blockchain adopters to it. Whereas Bitcoin was developed as a currency for exchanging value between diverse players, the objective for Ethereum was to expand the usage of Bitcoin’s underlying technology and create a broader, general-purpose blockchain.

The Ethereum software layer was created to facilitate the exchange of value in any shape or form, whether money, a house, an identity, the right to use or reproduce music, or any other asset you can conceive.

Ethereum also enables anybody to create new digital currencies (or “tokens”) that all Ethereum users may exchange. This feature permits various applications, from digitizing your favorite coffee shop’s reward points to establishing new economies in specific markets.

Anyone may learn to program in Solidity; there are numerous free resources online, such as the Ethereum official website or these gamified zombie classes.

To summarize, the Ethereum software layer allows software developers to create smart contracts that would enable programmable value transfer. Because the code for all smart contracts is public, everyone can see what these programs genuinely do.

The above-mentioned hardware and software layers enable Ethereum to function as a global, decentralized supercomputer on which users can run third-party applications.

While many early users used Ethereum’s “token emission” function to obtain funds to establish new ventures (Initial Coin Offerings), the applications of Ethereum go far beyond the financial sector. On Ethereum, over 2900 applications have been built.

Because of Ethereum’s open and transparent character, many developers from over the world came together to build a vast and robust community that is currently striving to expand the platform’s functions and applications.

The development of public and decentralized applications has various advantages over private and centralized systems, including:

(1) Transparency. Anyone may read the code and ensure that the application delivers on its promises. All transactions are also public and trackable.

(2) Resilience. It is difficult to stop those applications once they operate on Ethereum.

(3) Better coding. Because the code is public and accessible to any hacker, defects must be corrected quickly and effectively, resulting in higher quality and more trustworthy code.

In the following article of this series, we will see the difference between Ethereum and Bitcoin. © Blockchain Shiksha

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