How the ethereum blockchain works?

@lynn.runolfsdottir 

Ethereum is a decentralized, open-source blockchain platform that allows developers to build and deploy smart contracts and decentralized applications (dApps). Here's a brief overview of how Ethereum blockchain works:

1. Nodes: Ethereum network consists of a vast number of nodes, which are computers that store the entire blockchain and execute computations specified by the smart contracts. These nodes communicate with each other to maintain a decentralized network.
2. Blockchain: Ethereum's blockchain is a distributed ledger that records and stores all transactions and smart contract code. It is a continuously growing list of blocks, with each block containing a set of transactions and a reference to the previous block, forming a chain.
3. Smart Contracts: Ethereum's smart contracts are self-executing contracts with predefined rules and conditions encoded within them. These contracts are stored on the blockchain and can be accessed and executed by anyone on the network. Smart contracts enable decentralized applications and automate various processes.
4. Consensus Mechanism: Ethereum initially used a Proof-of-Work (PoW) consensus mechanism, similar to Bitcoin, to validate and add new blocks to the blockchain. However, it is transitioning to a Proof-of-Stake (PoS) mechanism called Ethereum 2.0, which relies on validators who hold and "stake" Ether (the native cryptocurrency of Ethereum) to secure the network and create new blocks.
5. Gas: Ethereum uses a concept called "gas" as a measure of computational effort required to execute operations and store data on the blockchain. Gas fees are paid by users for executing transactions and smart contracts, preventing spam and encouraging efficient use of the network's resources.
6. Network Updates: Ethereum is continuously being improved with network upgrades or hard forks. Notable upgrades include Ethereum Homestead, Ethereum Metropolis (which includes Byzantium and Constantinople), and Ethereum Serenity (the upcoming Ethereum 2.0 upgrade).

Overall, Ethereum's blockchain provides a decentralized platform for developers to create and deploy smart contracts and dApps, enabling transactional and computational capabilities in a trustless and secure manner.

@lynn.runolfsdottir 

The Ethereum blockchain is a distributed ledger technology that allows for the creation and execution of smart contracts. Here is a high-level overview of how the Ethereum blockchain works:

1. Nodes: The Ethereum network consists of thousands of nodes, which are computers participating in the network. These nodes maintain a copy of the entire blockchain and validate transactions.
2. Blocks: Transactions on the Ethereum blockchain are organized into blocks. Each block contains a list of transactions and a reference to the previous block, forming a chain of blocks. This ensures the integrity and immutability of the data.
3. Consensus: Ethereum uses a consensus algorithm called Proof of Work (PoW) to agree on the order of transactions and secure the network. Miners, who are specialized nodes, compete to solve complex mathematical puzzles to add new blocks to the blockchain. The miner who successfully solves the puzzle first earns a reward in the form of Ether (ETH).
4. Smart Contracts: Ethereum allows the execution of smart contracts, which are self-executing contracts with the terms of the agreement directly written into code. Smart contracts are stored and executed on the Ethereum blockchain, enabling decentralized applications (dApps) to run without the need for a central authority.
5. Gas: The Ethereum network introduced a concept called gas to prevent spam and ensure fair execution of smart contracts. Each operation in a smart contract consumes a certain amount of gas, which is a measure of computational effort. Users need to pay gas fees to execute transactions and execute smart contracts.
6. Decentralized Applications (dApps): Ethereum enables the development and deployment of decentralized applications through its network and smart contract functionality. Developers can utilize Ethereum's infrastructure to build various applications, such as decentralized finance (DeFi) platforms, non-fungible token (NFT) marketplaces, and more.

Overall, Ethereum's blockchain provides a secure, transparent, and decentralized platform for executing transactions and running smart contracts, opening up possibilities for innovative applications and financial systems.