At the outset, we must know that Ethereum is not a cryptocurrency, but rather a public open-source decentralized platform that works through Blockchain technology and provides smart contracts through an international network of public nodes, and a cryptocurrency called ether is issued, which is traded Between accounts as compensation for the participants in computing those contracts on the network, it has a special internal pricing mechanism called GAS.
The smart contract is a computer protocol that aims to facilitate negotiations, achieve contractual terms, and implement contract performance clauses in a digital and reliable manner without the need for a third party - supervisory or executive - as these transactions can be tracked and cannot be returned after their implementation. Higher security than traditional contract law while reducing the cost of transactions, which are usually carried out with cryptocurrencies.
This system was proposed by a cryptocurrency researcher and programmer from Toronto, Canada, called "Vitalik Buterin" in 2013 with the aim of providing a decentralized platform suitable for all applications that programmers wish to design. 11.9 million tokens raised $18 million in funding, making it one of the most successful crowdfunding operations, or ICOs, to date.
The existence of Ethereum created the so-called Decentralized Autonomous Organizations or DAOs, which are organizations that are run through encrypted rules that are computerized with smart contracts whose transaction history and rules are maintained on the Blockchain network.
In 2016, Ethereum was divided into two separate blockchains, a new chain called Ethereum (ETH), and the original Ethereum Classic (ETC).
As we mentioned before, every technical project issues a token or coin value, and the monetary value of Ethereum is called Ether and stands for ETH, which is the currency that is used to pay transaction fees and services on the Ethereum Blockchain network.
Every developer who wants to enter and benefit from the world of smart contracts on the Ethereum blockchain needs ether to move forward, and its supply has been determined so that it is not an inflationary currency so that only 18 million ether is issued annually.
How to get ether, and what is the concept of Ethereum Mining
The idea of mining is inspired by the idea of prospecting to obtain precious metals such as gold, silver and diamonds, for example, the difference is that you mine for gold to get more of it and increase the volume of its supply, while mining ethereum is not only this, but it is a necessary process to secure the ethereum network as the mining process creates and achieves Blockchain deployment, and ether is the fuel to power that process.
The process of mining Ethereum is almost the same as the process of mining Bitcoin, in the Bitcoin Blockchain the ownership of the digital currency follows, while the Ethereum Blockchain focuses on running the code of any decentralized application
For each block of transactions, miners run their own data - such as time and version, for example - repeatedly and quickly, and guess answers or values through the Hash function, which randomly displays a series of numbers and letters to change the nonce value, which later affects the partial hash value.
If the hash value, randomly guessed and displayed in the previous step, matches the current target, the miner is rewarded with ether and the new block is broadcasted through the network nodes for validation and a copy of it is added to the master record of the Blockchain, and it is impossible for the miner to cheat or Circumventing this process is why the process of guessing the answer and finding the correct value is called "proof of work" or proof-of-work or POW.
Approximately every 12 to 15 seconds the miner can find a new block, and in the event that the process of guessing or finding the value is faster than that, the network algorithms automatically increase the degree of difficulty of the POW process, and the specific proof-of-work algorithm used by Ethereum is called "ethash" Successful POW Miner obtains a static block equal to 5 Ether.