Ethereum Network Fundamentals

• Ethereum powers the cryptocurrency ether (ETH).
• Ethereum is a community-run technology.
• Ethereum supports thousands of decentralized applications.

Ethereum Definition

• Ethereum is a decentralized blockchain network.
• Ethereum is powered by the Ether token.
• Users can make transactions.
• Users can earn interest through staking.
• Users can use and store non-fungible tokens (NFTs).
• Users can trade cryptocurrencies and play games.
• Users can use social media.
• Ethereum describes itself as a fairer financial system.
• Ethereum describes itself as the internet of assets and an open internet
• Ethereum describes itself as a new frontier for development.
• Ethereum is essentially a single decentralized system.
• The system runs a computer called the Ethereum Virtual Machine (EVM).
• Each node holds a copy of that computer.
• Any interactions must be verified so everyone can update their copy.

Ethereum Components

• Smart Contracts: Automatically execute when certain parameters are met.
• DApps: Applications used on the Ethereum network like on an app store.
• Validators: Confirm all on-chain transactions to allow the Ethereum network to function.

History of Ethereum

• Vitalik Buterin is a Canadian computer programmer and co-founder of Ethereum.
• Buterin co-founded Bitcoin Magazine in 2011.
• In 2015, Buterin deployed the Ethereum blockchain.
• He deployed the Ethereum blockchain with Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin.
• Ethereum is a decentralized mining network and software development platform rolled into one.

Ethereum's Significance

• Ethereum is considered the internet's next step.
• Centralized platforms like Apple's App Store represent Web 2.0, and Ethereum is Web 3.0.
• Ethereum supports decentralized applications (DApps), decentralized finance (DeFi), and decentralized exchanges (DEXs).

How Ethereum Works

• Each transaction comes with a fee called "gas".
• "Gas" is paid by the user initiating a transaction.
• The fee is paid to the node as an incentive for validating transactions and ensuring network security.
• Gas essentially serves as a limit, restricting the number of actions a user can make per transaction.
• Gas exists as a way to prevent network spam.
• Ether is the currency of the network and the "fuel" of the Ethereum network.
• Ether's utility value as a crypto-fuel is referred to as "gas".
• Gas is a core part of all network requests
• The sender of requests is required to pay for the computing resources consumed (compensation)
• Cost = (Volume + Complexity) X Current Gas Price

What Ethereum Does

• DeFi has been Ethereum network's biggest achievement.
• Ethereum is the biggest platform.
• The more DApps are used, the more the Ethereum network will be used as a result.
• Successful DApps are bringing more awareness to the platform over the years.
• NFTs hold proof of ownership, and are a secure form of storage.
• Social media apps are uncensorable and enable users to tip each other for content
• Games Enable users to invest in assets, play to grow them, and then sell for a profit, extracting actual value from their game time
• Prediction platforms reward correct forecasts.
• Freelance platforms don't take a huge cut from each payment.

Ethereum Advantages

• Etherium provides lack of censorship
• Unlike Facebook, censorship on Ethereum-based social media only happens if the community votes to do it.
• Users can discuss different viewpoints
• Only community can decide what should and shouldn't be said.
• Bad actors would need to control 51% of the network to make a change
• Ethereum's "smart contracts" automate many of the steps taken by central authorities on the traditional web.

Ethereum Disadvantages

• Ethereum's scalability leads to high transaction fees
• Decentralization hinders transaction speed.
• A central entity like Visa manages everything and has perfected the transaction process.
• The Ethereum platform is expensive to develop and challenging to interact with for users unfamiliar with its technology.
• Some platforms require specific wallets, meaning one must move ETH from their current wallet to the required wallet.
• That's an unnecessary step for users ingrained in our current financial ecosystem and not beginner-friendly
• Using Ethereum needs streamlining.

Bitcoin and Ethereum

• Bitcoin and Ethereum are the leaders of their domains
• Bitcoin and Ethereum are most widely recognized cryptocurrencies today
• Bitcoin and Ethereum are the most valuable in terms of total market capitalization
• Bitcoin and Ethereum are decentralized cryptocurrencies
• The coins have digital assets stored in digital wallets
• The coins can be sold on cryptocurrency exchanges
• Both are based on a publicly visible distributed ledger (blockchain).
• Ethereum is a platform to run applications and smart contracts.
• They use different consensus mechanisms. POW vs. POS.
• The coins have different transaction capacity: Bitcoin is 7-10/second, Ethereum is 100k/second (intended)
• Bitcoin has a block time (time to mine a transaction block) of 10 minutes vs. Ethereum block time of 10-20 seconds
• BTC is the most mainstream cryptocurrency
• Ethereum strives to be the next phase in the evolution of the Internet.
• All Ethereum-based tokens are technically interoperable.
• Bitcoin's network is only for Bitcoin.

What is ether (ETH)?

• Ethereum is the blockchain.
• ETH is Ethereum's built-in cryptocurrency.
• ETH is the primary asset of Ethereum.
• ETH fuels and secures Ethereum.
• When you send ETH or use an Ethereum application, you pay a fee in ETH to use the Ethereum network.

What is Gwei?

• Gwei is the denomination of ether most widely used
• Gwei is the most used unit of ether
• 1 ETH = 1 billion Gwei (1 ETH = 1018 Wei)
• Gwei is used to pay for the computational power.
• The standard transaction fee is 21,000 gwei
• Transaction fees increase proportionately to the underlying complexity of the transaction.

Essential Ethereum Terms & Expressions

• Smart contracts digitize agreements by turning the terms of an agreement into computer code that automatically executes when met
• Dapps (Decentralized application): Smart contract and a web user interface, decentralized storage and/or a message protocol and platform.
• Ethereum Virtual Machine (EVM) enables anyone to run any program, regardless of programming language and makes creating blockchain applications efficient.
• Tokens are tradable virtual goods defined in smart contracts on the Ethereum blockchain.
• Tokens can be tracked, traded, and are interchangeable, unlike NFTs.
• NFT (Non-Fungible Token) is a "deed" this token standard introduced by ERC-721
• NFTs can be tracked and traded, but each token is unique and distinct; they are not interchangeable like ETH and ERC-20 tokens.
• NFTs can represent ownership of digital or physical assets.
• ERC-20 standard allows developers to build token applications that are interoperable with other products and services.
• DAO (Decentralized Autonomous Organizations) is a company or other organization that operates without hierarchical management
• Gas is a virtual fuel used in Ethereum to execute smart contracts.
• Wallets are software that holds private keys
• Wallets can access and control Ethereum accounts and interact with smart contracts.
• Keys need not be stored in a wallet, and can instead be retrieved from offline storage (i.e. a memory card or paper) for improved security.
• Oracles bridge between the blockchain and the real world.
• They act as on-chain APIs that can be queried for information and used in smart contracts.
• DEX (Decentralized Exchange) is a dApp that lets you swap tokens with peers on the network.
• You need ether to use one (to pay transactions fees)
• Processes for buying ETH include choosing a cryptocurrency exchange, funding your account, placing an order for Ethereum, and storing your Ethereum.

101 Blockchains' Enterprise Ethereum Use Cases

• Banking & Finance: Faster processing of cross-border payment, higher security, reduced cost / greater efficiency in transaction
• Real Estate: Reduces costing, promotes fractional ownership and increased scalability
• Healthcare: Gets rid of drug counterfeits, tracks patient infomation, streamlines multiple test results at the same time.
• Media & Entertainment: Connects artist with a better paycheck, efficient marketing on social media for better artist value.
• Energy: Blockchain-enabled energy delivery, regional energy trading, automated energy billing
• Supply Chain: Secured ledger system, track all products and prevent corrupted personnel using accurate information
• Government: Security of citizen rights preservation, accelerated economic-growth and the digitisation of citizen identification
• International Trade & Commodities: Improved transparency & trust for trade finance, greater control for manufacturers & reduced paperwork and cost
• Oil and Gas: Secured freight payment audits, calculating shipment efficiency & saves revenues with increased accuracy.
• Law: Templatizing of legal documents to ease the creation of legal agreements, e-signing for legal doc, smart contract integration to streamline auto payments for legal processes
• Identity: Document-less citizenship, portable identification & reduces identity theft and data hacks
• Insurance: Reduces the number of paper trails, faster insurance claims and avoids exploitation of consumers

Explore the core functions, characteristics, and advantages of the Ethereum network. Understand the roles of validators, the EVM, and ETH. Also, learn about Ethereum's co-founders and its key differences from Bitcoin.