Ethereum is a public blockchain platform that allows users to receive and send value worldwide. The native token on the Ethereum blockchain is ether (ETH), which is to pay for transaction fees on the network.
The concept of Ethereum was first introduced in 2013 by Vitalik Buterin to expand utility in crypto by allowing developers to create their decentralized applications (DApps). Some of the transactions on the Ethereum blockchain range from blockchain gaming and NFTs to decentralized finance and more.
Contrary to traditional applications, DApps employ smart contracts, making them autonomous and self-executing. These smart contracts refer to coded programs on the Ethereum blockchain that automatically carry out the network functions when users meet pre-established conditions. Functions carried out by smart contracts may range from processing a payment transaction to issuing loans whenever collateral is deposited in a crypto wallet.
For smart contracts to be possible, developers must possess proficiency in programming languages such as Java script, Vyper, and C++. Smart contracts in Ethereum mostly use Solidity, the brainchild of one of its co-founders, Gavin Wood. All the smart contracts are executed in the Ethereum Virtual Machine (EVM), which is built into each Ethereum node. The EVM can carry out 140+ opcodes, which are the basic instructions to perform all required tasks.
How Ethereum Works
Ethereum’s peer-to-peer network comprises computers referred to as nodes. The nodes store all relevant data on accounts, smart contract codes, and the state of individual smart contracts.
With the proper hardware and know-how, anybody can operate an Ethereum node. Here are some of the primary nodes available on the Ethereum network.
Full nodes: They are responsible for executing smart contract operation codes. Additionally, they verify and copy every transaction done on the Ethereum blockchain.
Full archive nodes: As the name suggests, these nodes store all the transaction history on the Ethereum blockchain. Also, tools such as block explorers make use of these nodes.
Light nodes are responsible for partial record maintenance on the blockchain and get additional data from full nodes whenever necessary. The nodes don’t need to operate 24/7 and can run on smaller gadgets like smartphones.
Ethereum Token Standards
Ethereum token standards refer to the designs used to create tokens adaptable to the Ethereum network. The tokens include fungible and non-fungible tokens (NFTs). Developers primarily use these token standards in Ethereum to aid users in creating digital tokens cheaply and without starting from scratch. The ERC token standard is the most popular one in the Ethereum network and the ones majorly used are explained below.
ERC-20 is used to create fungible tokens with identical characteristics to other prominent cryptocurrencies available in the market today.
ERC-721: This standard is used in the creation of NFTs.
ERC-1155: This standard allows users to create fungible, semi-fungible, and non-fungible tokens.