How does Ethereum work?

How does Ethereum work?

Ethereum-based apps are built using its key innovation: “smart contracts.” Smart contracts, like regular paper contracts, establish the terms of an arrangement between parties.

But unlike an old-fashioned contract, smart contracts automatically execute when the terms are met without the need for either participating party to know who is on the other side of the deal — and without the need for any kind of intermediary.

What is Ethereum?

Ethereum is the second-biggest cryptocurrency by market cap after Bitcoin. It is also a decentralized computing platform that can run a wide variety of applications — including a universe of decentralized finance (or DeFi) apps and services.

Everything from financial tools and games to complex databases are already running on the Ethereum blockchain. And its future potential is only limited by developers’ imaginations. As the nonprofit Ethereum Foundation puts it: “Ethereum is for more than payments. It’s a marketplace of financial services, games and apps that can’t steal your data or censor you.”