What is Ethereum?
Ethereum is an open platform for building decentralized applications. Sound complicated? Let's break that down a bit.
Ethereum is Decentralized. This means that no single entity (company, organization, or government) owns and controls the Ethereum network. It's controlled collectively by the people, companies, organizations, and governments who contribute to it. In addition, anyone with a little bit of Ether (the currency of Ethereum) can contribute. No individual or entity can be denied as long as the transaction is valid.
Ethereum is Open. The changes that occur on the blockchain are available for inspection. The details are out in the open for everyone to see, which means that nefarious activities are more difficult to hide.
Ethereum is built on Blockchain technology. You can think of blockchain as a cryptographically verified ledger. This just means that all of the transactions in the ledger are verified by several computers to ensure that the account that is listed as the sender actually signed the transaction. But instead of a hand signature, these signatures are electronic and very very difficult to forge.
There are several concepts that are helpful to understand in order to safely conduct business on the Ethereum network.
As mentioned above, Ether, or ETH, is the currency of the Ethereum network. Ether is used to power transactions, and it can be transferred between accounts eg as payment for services.
With our system, you don't need to worry about buying Ether, which is very volatile. We purchase the Ether, and use our accounts to create contracts on your behalf. That allows us to provide our service to you and we will bill you in US Dollars.
Wei and Gwei
A single Wei is the smallest unit of Ether that anyone can spend. Similar to traditional currencies that have eg Dollars and Cents, a single wei is a tiny portion of Ether. To be precise, there are a billion billion wei in a single Ether: 1 ETH = 10^18 wei.
A Gwei, or Gigawei, is a billion wei. 1 ETH = 10^9 Gwei. 1 Gwei = 10^9 wei
Each Transaction is a single entry in the Ethereum blockchain ledger. It can be as simple as sending Ether from one account to another account, or a complicated Contract that executes several steps in a program and interacts with several accounts and/or other contracts.
We make it easy to execute transactions with our simple API.
Contracts are programs that bring the real power to Ethereum. There are contracts that act as currencies, contracts that behave more like physical objects, and contracts that have complicated rules and instructions that can execute several steps in an advanced program.
The instructions that make up contracts allow them to ensure everyone plays by the same rules.
Our system comes with several pre-defined Contracts that can be configured for your applications.
A small amount of Ether (ETH) is required to cover the cost of computing and verifying each transaction. This is called Gas and it's used to power the network.
When using our system, we estimate the Gas necessary to create contracts and execute transactions to make it easy to use. We show you exactly how much each transaction will cost, whether using our Designer UI or the Contracts API. That way you can feel secure in knowing exactly how much it will cost in US Dollars.
When submitting a transaction, the sender decides how much they are willing to pay for the transaction to get executed. A lower Gas Price will typically mean that it takes longer for the transaction to make it into the blockchain. Gas Prices are typically calculated in Gwei.
When using our system, we automatically pick a Gas Price that will get processed in a reasonable amount of time without breaking the bank, and as stated above, we'll convert the costs into US Dollars so that it is easier to understand.