Ethereum basic concepts

Ethereum builds on top of the Bitcoin blockchain, including key features such as a distributed ledger containing chained blocks, the proof-of-work algorithm, and so on. However, its biggest addition is the introduction of smart contracts, which are coded in a Turing-complete scripting language. Because of this new addition, unlike Bitcoin or its non-smart contract close relatives, Ethereum allows developers to address generic business problems.

Before getting to the basic concepts, we summarize some useful facts on Ethereum as follows:

• Ethereum has three main ingredients:
  • Decentralization: For guaranteed execution
  •  Hashes: For safeguarding the world state
  •  Signatures: For authorizing programs and transactions

• Since Ethereum is a blockchain, it uses mathematical algorithms to replace intermediary entities and bring untrusting parties together to do businesses.
• Ethereum blockchain brings trust in data due to its ability to verify the validity of data on a node via its consensus...