Ethereum can be described as a decentralized blockchain-based platform which functions by using smart contracts. The benefit of using smart contracts is that you don’t have any interference from a third-party to regulate or censor the transactions. While this might seem like a downside, the benefit here is that the platform applications must operate just as their programmed. This means there is no chance of fraud or downtime like there is with centralized transactions.
Each time the Ethereum blockchain conducts an operation, there is a price for it. The network can only execute operations successfully if “Gas” is consumed. The Ethereum Virtual Machine utilizes public nodes on an international network to execute these operations. The pricing mechanism for each internal transaction is what “Gas” is. When Gas is consumed, it reduces the amount of spam in the network and distributes resources throughout it accordingly.
Whenever there is a transaction in the Ethereum platform, there is a transaction fee that must be paid. Also, the computation time spent while using the platform will also have a fee attached to it. These fees can only be paid using a cryptocurrency called Ether, which is a cryptocurrency generated by the Ethereum platform.
If you become a miner with the Ethereum network, you can create blocks which will eventually earn you block rewards. Each block has a certain value in that particular cryptocurrency and if you create a block, you will receive a certain amount of Ether for it. This is the same concept that applies to any blockchain network where miners can create blocks that have cryptocurrency value.
To become a miner, you need to either run the mining software on your Windows personal computer or hire someone else with a mining contract to do the Eth mining for you. Of course, the latter will be the more expensive option, but it may be beneficial if you’re dealing with an experienced miner who has the right mining equipment for the job. And since it is a contract, they won’t be able to run away with your blocks. Any blocks they successfully create will go right to you. So, the idea is that the value of their mining will surpass the upfront investment that you paid for the service.
Ethereum has only been around since August of 2014 and yet, it has quickly grown into one of the most popular blockchain computing platforms in the world.