Staking on Ethereum
Last updated
Last updated
Ethereum is a decentralized, open-source blockchain platform that is made up of many communities, and a set of tools which enable people to transact and communicate without being controlled by a central authority. Unlike traditional centralized systems, Ethereum eliminates the need for intermediaries and allows individuals to interact directly with each other through smart contracts, which are self-executing agreements with predefined rules.
The native cryptocurrency of the Ethereum network is called Ether (ETH). It serves multiple purposes, acting as a means of exchange, and a utility token within the Ethereum ecosystem. ETH is used to pay for transaction fees and computational services on the network, incentivizing participants to secure the blockchain through a process called staking. We will discuss ETH staking in detail in the subsequent section.
The Ethereum blockchain operates on a global network of computers known as nodes, which collectively maintain a shared and tamper-proof record of transactions and application data. Unlike traditional centralized systems, the Ethereum blockchain is not controlled by a single entity but rather relies on the consensus of the network participants to validate and secure transactions.
Over the years, the Ethereum blockchain underwent significant upgrades that improved scalability, security, and sustainability. The most notable upgrade was Ethereum 2.0, dubbed as the merge. The merge aimed to transition the network from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) consensus mechanism. This upgrade addressed concerns regarding energy consumption and scalability, resulting in a more efficient Ethereum blockchain capable of handling a higher volume of transactions.
In conclusion, the Ethereum blockchain is a pioneering platform that has propelled blockchain technology into new realms of programmability and decentralized application development. With its support for smart contracts, extensive developer community, and continuous innovation, the Ethereum blockchain has become a fundamental building block for the decentralized economy, enabling new possibilities for trust, transparency, and innovation across a wide range of industries. Learn more
