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How does the Ethereum network work?

Imagine that thousands of computers around the world are connected on the same platform via the Internet. The same computer program (Ethereum Virtual Machine – EVM) is installed on all this equipment, which allows all these computers to connect to each other, forming a network of equal nodes.



This program establishes rules on how this computer network should work: how nodes should interact with each other, how they should store data. This program also allows the equipment to behave as if all these computers were a single system. Each of the thousands of devices included in the network does the same in the same order with the time stamp, that is, they all register the same information and perform the same action. This is how the Ethereum network works.



Key differences between Ethereum and Bitcoin



Ethereum has become a new computer innovation created from innovative technologies and the concept of Bitcoin, which is based on blockchain technology and peer-to-peer networks (p2p). Bitcoin uses blockchain technology for publicly and decentralized accounting of all Bitcoin transactions, but with a series of very limited software commands. Ethereum implements blockchain technology to become a common computing platform that allows you to create various decentralized applications, including cryptocurrencies, which allows you to create applications with any programming language.



Bitcoin is a block platform that allows transactions in cryptocurrency, and Ethereum is a block diagram that allows you to complete transactions and create smart contracts. And if the bitcoin network allows you to send money (in the form of bitcoins) between two people without the need for a central organization to participate in this transaction, then the Ethereum platform allows you to perform any actions that can be programmed with any person, without the need for an intermediary.



Ethereum makes this possible thanks to smart contracts that become programmable network units. These smart contracts are executed by the Ethereum network itself and can interact with other smart agreements on the network to run more complex applications. In addition, in the Bitcoin network, a double bitcoin account cannot be executed because each transaction is registered with a time stamp in the block chain. On the Ethereum network, the rules of an intellectual contract cannot be violated because all contracts are registered in a chain of blocks.



Ethereum programming language is Turing complete. The Bitcoin programming language has a series of very limited commands that have been defined to avoid possible attacks on the network.