Quiz: Ethereum

Ethereum is the second-largest cryptocurrency by market cap behind Bitcoin. Some people speculate that Ethereum will overtake Bitcoin as the largest cryptocurrency within the next 5 years.

Ethereum and Bitcoin are designed for different purposes. Bitcoin is a peer-to-peer digital currency in its purest form. Ethereum uses similar technology to Bitcoin to powers its digital currency, however, it is also a platform for hosting smart contracts and decentralized applications (dApps).

The Ethereum platform features its own cryptocurrency called Ether (ETH), though this is commonly referred to as Ethereum.

Smart contracts and traditional contracts essentially perform the same task. They detail a process and explain the rule that comes with it. Smart contracts, however, are written into code on the blockchain and self-execute once the terms event outlined in the agreement is triggered.

Ethereum is a platform that hosts decentralized applications (dApps). Some examples of dApps that operate on top of the Ethereum platform include Uniswap, Decentraland, Axie Infinity and Aave.

Gas fees often rise when the Ethereum network is busy and congested. In this situation, miners prioritise the transactions with the highest gas fees. This often slows down the network, as there are not enough miners to validate the number of transactions outstanding.

On the Ethereum network, gas is a unit that measures how much work It takes to complete tasks like validating transactions. A gas fee is a charged for executing transactions and smart contracts. These fees are paid in Ether (ETH).

ERC-20 tokens are fungible tokens created through smart contracts that are compatible with the broader Ethereum network.

Ethereum 2.0, also known as Serenity, is an upgrade to the Ethereum network that is designed to make transactions faster, fees cheaper and the entire platform more scalable.

Sharding is a scaling method that will split the Ethereum blockchain into many different partitions or “shards”. Each shard will contain the blockchain’s state and transaction history and can be processed in parallel, vastly improving processing speed and volume.