MODULE 4

What is Ethereum?
Vitalik Buterin proposed Ethereum in 2013 as a blockchain platform where not only
money is transferred, but programs (smart contracts) can also run automatically.

Ethereum is like a global computer where anyone can build and run applications
securely without a middleman.
Ethereum is a decentralized blockchain platform that allows users to create and run
smart contracts and decentralized applications (dApps) without needing a
middleman.
Ethereum provides a Turing-complete language → means developers can write any
type of program.
These programs are called smart contracts.
They run automatically when conditions are met (no human intervention needed).
Example
Think of online food delivery (like Swiggy/Zomato):
Normally:
You order food → restaurant prepares → delivery → you pay → app manages
everything.
With Ethereum:
A smart contractcan handle everything automatically:
IF food is delivered → THEN payment is released to restaurant
IF not delivered → refund automatically
No need for a company to control everything — the system runs on blockchain rules.
Ethereum Clients and Releases
Ethereum clients: Software programs (like Geth
or Parity) used to connect, run, and interact with
the Ethereum network.
Ethereum releases: Different upgraded versions
of Ethereum (like Frontier, Homestead, Serenity)
introduced over time with new features and
improvements.
Ethereum Clients (Software to Run Network)
Geth (Go-Ethereum) → most commonly used software
Parity → another client built using Rust
Mist Wallet → user-friendly interface (like an app)
These are like different apps to access the same network.
Ethereum Releases (Versions Over Time)
Olympic (2015) → Testing phase
Frontier (2015) → First live version
Homestead (2016) → More stable version
Istanbul & Muir Glacier → Improved speed, security, and performance
Serenity (ETH 2.0) → Future upgrade using Proof of Stake (PoS) instead of mining
Ethereum = Blockchain + Programs (smart
contracts)
Lets you build apps without middlemen
Works like an automatic system that follows
rules
Used in finance, gaming, voting, supply chain,
etc.
ETHEREUM STACK
From the diagram:
Web3 / Custom Interface → User interface (like a website or app)
RPC (Remote Procedure Call) → Communication bridge
Ethereum Client (Geth) → Core software running the network
Local Blockchain → Copy of blockchain stored in your system
P2P Network → Global Ethereum network
Flow:
User App → Web3 → Ethereum Client → Blockchain Network
 Ethereum Stack is a set of tools like EVM,
Solidity, [Link], Ganache, Truffle, Infura, and
MetaMask used to develop and interact with
Ethereum-based applications.
 Ethereum Virtual Machine (EVM)
→ It is the “brain” of Ethereum that executes smart contracts on all nodes.
Smart Contracts
→ Programs stored on blockchain that automatically execute rules (like automatic payment
systems).
Solidity
→ Programming language used to write smart contracts.
[Link]
→ Helps websites/apps interact with Ethereum (send transactions, read data).
Ganache
→ A local test blockchain used by developers to test smart contracts safely.
Truffle
→ A development tool that helps in writing, testing, and deploying smart contracts easily.
Infura
→ A cloud service that connects apps to Ethereum without running a full node.
MetaMask
→ A browser wallet that allows users to interact with Ethereum apps.
ETHEREUM BLOCKCHAIN
 What is Ethereum Blockchain?
Ethereum can be understood as a transaction-based state machine.
State machine means:
The system changes from one state to another whenever a transaction happens.

How it Works?
Initially, there is a starting condition (Initial State)
When a transaction happens → system updates
This gives a new condition (Final State)
So, Ethereum keeps updating its state step by step based on transactions.
Based on Diagram
Initial State (S)
Address A → 10 ETH
Address B → 10 ETH
Transaction happens
A sends 2 ETH to B
Final State (S’)
Address A → 8 ETH
Address B → 12 ETH
This change from S → S’ is called a state transition
 Ethereum blockchain works like a system where each
transaction updates the current state (balances, data) into a
new state.
Currency: ETH and CTC
Ether (ETH)
ETH is the main cryptocurrency of Ethereum
Used for:
Paying gas fees (transaction fees)
Running smart contracts & dApps
Staking to earn rewards
Very popular and widely used in:
DeFi, NFTs, gaming, DAOs
Works on Proof of Stake (PoS) after 2022
ETH = fuel that runs the Ethereum network
Creditcoin (CTC)
CTC is the currency of the Creditcoin blockchain
Used for:
Recording loan transactions
Building credit history on blockchain
Helps people (especially in underbanked areas) get access to
loans
Runs on its own blockchain (not Ethereum)
CTC = helps track loans and credit records
Feature ETH CTC

Blockchain Ethereum Creditcoin

Loan records, credit

Main Use Gas fees, dApps, DeFi
system

Popularity Very high (Top crypto) Growing (niche use)

Proof of Work (may

Technology Proof of Stake
change)
 ETH is a general-purpose cryptocurrency for
running Ethereum apps, while CTC is a specialized
cryptocurrency used for recording and managing
credit and loan data.
 What is a Fork?
In Ethereum, a fork happens when the blockchain splits into two
paths due to changes or disagreements.
Types of Forks
1. Soft Fork (Easy Version)
A backward-compatible update
Old nodes can still work but may not understand new features
Only one chain continues
example:
Updating an app → old version still works but misses new features
2. Hard Fork
A non-backward-compatible update
All users must upgrade
Can create two separate blockchains
example:
A group project splits into two teams because of disagreement → both continue
separately
A fork is a situation where a blockchain splits into two paths due to
updates, disagreements, or technical issues.
GAS
In Ethereum, gas is the fee required to perform any
transaction or run smart contracts.
 Gas = Execution Cost
Every operation (transaction, smart contract) needs gas to run
It acts like fuel for computation
Paid by the User
The person who sends the transaction pays gas in Ether (ETH)
Paid before execution starts
Each Operation Has a Fixed Cost
Simple transaction → low gas
Complex smart contract → high gas
Gas Limit Concept
You set how much gas you are willing to use
If gas finishes before completion → transaction fails and is reversed
Refund of Remaining Gas
If full gas is not used → remaining gas is returned
Gas is not the same as mining fee
Gas is the computation cost, and the fee paid to
miners comes from this gas
Gas is the fee required to perform transactions
and execute smart contracts on Ethereum.
What is Computation Cost?
In Ethereum, computation cost means the amount of work (processing) required to
execute a transaction or smart contract.
Every action (like sending ETH or running a smart contract) needs computer processing
This processing uses:
CPU power
Memory
Network resources
The cost of using these resources = computation cost
 Ethereum Consensus (GHOST)
Consensus = Agreement
In Ethereum, consensus means all nodes agree on the correct blockchain.
GHOST Protocol Used
Ethereum uses GHOST (Greedy Heaviest Observed Subtree) to choose the valid chain.
Heaviest Chain, Not Just Longest
IInstead of only picking the longest chain, Ethereum selects the chain with maximum total
work (effort).
Includes Stale Blocks (Uncles/Ommers)
Even unused blocks (called Uncles/Ommers) are considered in calculation, so no work is
wasted.
Improves Speed & Efficiency
Helps handle fast block creation and reduces loss of valid work.
Ethereum uses GHOST protocol to select the chain with the
most total work (including stale blocks), not just the longest
chain.
 What is World State?
In Ethereum, world state means the current condition of all accounts in the entire
blockchain.
World state is the global record of all Ethereum accounts and their current data (balance,
transactions, and smart contracts).
It stores:
Who has how much money
What smart contracts exist
What data is stored
 Account State:
The account state in Ethereum is the data stored for each account, including its balance,
transactions, and contract details.

Types / Fields of Account State

Nonce: The number of transactions sent from an account (or contracts created).
Balance: The amount of Ether (ETH) stored in the account.
Storage Root: The hash that represents all data stored in a smart contract.
Code Hash: The hash of the smart contract code linked to the account (empty for
normal users).
Transaction
A transaction in Ethereum is a digitally signed instruction to transfer
value or execute a smart contract, like sending money through online
banking.
Types of Transactions
Message Call Transaction: It sends data or value from one account
to another, like sending money via UPI to a friend.
Contract Creation Transaction: It creates a new smart contract,
like installing a new app on your phone that performs tasks
automatically.
Transaction Fields
Nonce: A unique number for each transaction, like a token number you get in a bank
queue.
Gas Price: The fee you are willing to pay per unit of work, like paying extra for
faster service delivery.
Gas Limit: The maximum work you allow for a transaction, like setting a budget
limit for a task.
Value: The amount of Ether (ETH) being transferred, like sending ₹500 to someone.
Signature: Proof that the transaction is authorized by the owner, like your
handwritten signature on a cheque.
Signature Components (V, R, S)
R: A value derived from a random point on a curve, like a unique stamp on
a document.
S: A calculated value proving you own the private key, like a secret code
only you know.
V: A recovery ID used to find the sender’s identity, like a hint to identify
who signed the document.
 Two types of transactions
Ethereum transactions are of two types:
Contract Creation and Message Call
Contract Creation Transaction
Used to create a new smart contract on the blockchain
Requires inputs like sender, gas, code, and initial money (endowment)
Example: Like installing a new app on your phone
Message Call Transaction
Used to send data or interact with an existing account/contract
Includes sender, receiver, gas, and input data
Example: Like using an already installed app (sending message/payment)
Gas is required in both
Both transactions need gas (fees) to execute operations
If gas runs out → transaction fails
Result of transactions
Contract creation → new contract account is created
Message call → updates data or transfers value (state change)
Contract Creation = Creating a new bank account
Message Call = Sending money using that account
 Ethereum Virtual Machine (EVM)
What is EVM?
EVM is like the “computer inside Ethereum” that runs smart
contracts step by step.
The Ethereum Virtual Machine (EVM) is the execution
engine of Ethereum that runs smart contracts and processes
transactions across all nodes.
How EVM Works
Stack-based system (LIFO)
EVM uses a stack (Last In First Out) to store data while executing instructions Like a
stack of plates—last plate placed is the first taken out
Works with 256-bit data
Handles large numbers for security (cryptography)
Like using high-security lockers instead of normal locks
Uses Gas (limits execution)
Every operation costs gas, so infinite loops are avoided
Like prepaid mobile recharge—call ends when balance is over
Safe (Sandbox environment)(A sandbox environment is a safe and isolated
space where programs (like smart contracts) run without affecting the main
system or accessing external resources.)Cannot access internet or system files
directly.
Type Meaning Example

Temporary (cleared after

Memory Like RAM / rough notebook
execution)

Permanent (saved on Like hard disk / final record

Storage
blockchain) book
Execution Environment
These are the inputs needed to run a smart contract
Code owner address
Whose contract is running
Like app developer name
Sender address
Who started the transaction
Like person who pressed “Send”
Gas price
Cost per operation
Like price per unit of electricity
Input data
Instructions/data given
Like filling a form before submission
Initiator address
Original person who triggered execution
Like who started the process initially
 Value (Wei)
Amount of money sent
Like amount transferred in Google Pay
Code (bytecode)
Program instructions
Like app’s internal code
Block header
Current block info
Like date & time stamp on a receipt
Call depth
Number of nested calls
Like how many functions are running inside another function
1. The address of the account that owns the executing code.
2. The address of the sender of the transaction and the originating address of this execution.
3. The gas price in the transaction that initiated the execution.
4. Input data or transaction data depending on the type of executing agent. This is a byte array; in
the case of a message call, if the execution agent is a transaction, then the transaction data is
included as input data.
5. The address of the account that initiated the code execution or transaction sender. This is the
address of the sender in case the code execution is initiated by a transaction; otherwise, it's the
address of the account.
6. The value or transaction value. This is the amount in Wei. If the execution agent is a transaction,
then it is the transaction value.
7. The code to be executed presented as a byte array that the iterator function picks up in each
execution cycle.
8. The block header of the current block.
9. The number of message calls or contract creation transactions currently in execution. In other
words, this is the number of CALLs or CREATEs currently in execution.
EVM is a secure, stack-based virtual machine that executes smart
contracts using gas, memory, and storage to update the Ethereum
blockchain state.
 What is Machine State?
Machine state is the current working condition of the Ethereum Virtual Machine
(EVM) while executing a smart contract, and it keeps updating step-by-step during
execution.
🔹 Main Components
Available Gas: The remaining “fuel” to run operations.
Program Counter (PC): Tells which instruction is being executed next.
Memory Contents: Temporary storage used during execution.
Number of Words (Memory Size): Shows how much memory is currently being
used.
Stack Contents: Stores intermediate values (LIFO – Last In First Out).
What are Opcodes?
Opcodes are basic instructions (commands) that the Ethereum Virtual Machine (EVM)
executes to perform tasks.
Types of Opcodes (Easy Explanation)
Arithmetic Operations (0x00 – 0x0b)
Used for calculations like addition, subtraction.
Example: 2 + 3 = 5 (like using calculator)
Logical Operations (0x10 – 0x1a)
Used for comparisons (true/false).
Example: Checking if 5 > 3 → TRUE (like exam result pass/fail)
Cryptographic Operation (SHA3)
Used for hashing (security).
Example: Like converting a password into a secret code
 Environmental Information Opcodes
Gives details about sender, address, data, etc.
Example: Like checking “who sent the message” in WhatsApp
Block Information Opcodes
Provides block details (time, number, etc.).
Example: Like checking date & time of a transaction receipt
PUSH Operations (0x60 – 0x7f)
Adds data to the stack.
Example: Putting books on a stack
DUP (Duplicate) Operations (0x80 – 0x8f)
Copies an item in the stack.
Example: Photocopying a document
 SWAP Operations
Exchanges positions of stack items.
Example: Swapping seats between two students
Logging Operations
Stores logs/events on blockchain.
Example: Like saving transaction history in a bank passbook
System Operations
Performs major actions like contract creation or execution control.
Example: Like installing an app or making a phone call
 What are Precompiled Contracts?
Precompiled contracts are built-in functions in Ethereum that perform
complex operations faster and with less gas.
Types of Precompiled Contracts
ECDSARECOVER (Address 1)
Used to find the public key from a digital signature to verify who sent the transaction.
Example: Like verifying a person’s identity from their signature on a document.
SHA-256 (Address 2)
Used to convert input data into a secure 256-bit hash value.
Example: Like converting a password into a secure coded format
RIPEMD-160 (Address 3)
Used to generate a shorter 160-bit hash of data.
Example: Like creating a shorter version of a long ID number.
Identity Function (Address 4)
Returns the same input as output without any change.
Example: Like copying and pasting text exactly as it is
 What are Accounts?
Accounts are basic units in Ethereum that store balance and
interact to perform transactions, causing changes in the
blockchain state.
Example: Like bank accounts that send and receive money.
Types of Accounts
1. Externally Owned Account (EOA)
Controlled by a user using a private key, with no code.
Example: Your personal bank account.

2. Contract Account (CA)

Contains smart contract code and executes automatically when triggered.
Example: A vending machine that gives items automatically after payment.

Key Difference
EOA → Controlled by humans
Contract Account → Controlled by code
What is a Block?
A block in Ethereum is a container that stores transactions and important data of the
network.
Example: Like a page in a notebook that records multiple transactions.

Main Parts of a Block

[Link] Header → Contains important technical details
[Link] List → All transactions in that block
[Link] (Ommers) List → Extra valid blocks not included in main chain
🔹 Block Header (Important Fields)
Parent Hash: Link to previous block (creates chain).
Example: Like page number referencing previous page.
Ommers Hash (Uncles): Hash of extra valid blocks.
Example: Backup pages not included in final notebook.
Beneficiary: Address that gets mining reward.
Example: Winner who gets prize money
State Root: Final state of all accounts after transactions.
Example: Final bank balances after all transfers.
Transactions Root: Hash of all transactions in block.
Example: Summary of all payments made in a day
 Receipts Root: Hash of transaction results/receipts.
Example: Collection of all payment receipts 🧾
Logs Bloom: Quick filter to search logs.
Example: Index page in a book for fast search.
Difficulty: How hard it is to mine the block.
Example: Difficulty level in a game 🎮
Block Number: Position of block in blockchain.
Example: Page number in a notebook.
Gas Limit: Maximum gas allowed in block.
Example: Spending limit per day.
 Gas Used: Total gas consumed.
Example: Total money spent.
Timestamp: Time when block was created.
Example: Date & time stamp on receipt.
Extra Data: Additional optional info.
Example: Notes written on a page.
MixHash & Nonce: Used to prove mining work (security).
Example: Solving a puzzle to win reward
 Transaction Receipts
A transaction receipt is like a bill/confirmation slip after a transaction is completed.
Example: When you do a UPI payment, you get a receipt showing status, amount, and details.
It contains 4 main things:
Post-transaction state: Shows the updated condition of the system after execution.
Example: After sending money, your balance decreases and receiver’s increases.
Gas used: Total gas consumed to complete the transaction.
Example: Like electricity units used to run a machine.
Logs (Set of logs): Records events that happened during execution.
Example: Like a CCTV recording showing what actions happened.
Bloom filter: A quick search tool to find logs efficiently.
Example: Like using keywords to quickly find a message in WhatsApp
Transaction Validation (Before Execution)
Before executing, Ethereum checks:
Transaction format is correct
Signature is valid (authentic sender)
Nonce matches (no duplicate transaction)
Enough gas is provided
Sender has enough balance
Example: Like checking ID, balance, and details before allowing bank transfer.
 Transaction Sub-State (Temporary Data During Execution)
During execution, a temporary record (sub-state) is created with 3 parts:
1. Suicide Set: List of contracts/accounts to be deleted after execution
Example: Like closing a bank account permanently
2. Log Series: Records events triggered by smart contracts
Example: Like getting notifications when an order is placed on Amazon
3. Refund Balance: Remaining gas refunded after execution
Example: Like getting change back after paying more money than needed
Transaction receipt = Final report
Validation = Security check before execution
Sub-state = Temporary working notes during execution
Block Validation Mechanism
Basic Check: A block is valid only if its transactions and Ommers (Uncles) are
correct and the previous block exists.
Example: Like checking if a new page correctly follows the previous page.
Time Check (Timestamp): The block time must be after the previous block and not
too far in the future (max 15 minutes).
Example: Like making sure attendance is marked in proper time order.
Ommers (Uncles) Check:Only valid stale blocks are accepted, within 6 blocks limit,
and max 2 allowed.
Example: Like accepting only recent late assignments.
Ommers (Uncles) are valid blocks in the Ethereum network that were mined
correctly but not included in the main chain due to timing delays, and they are later
referenced to improve security and reward miners.
 Transaction & Gas Check: All transactions are verified and gas used must match
correctly.
Example: Like checking if total bill = items purchased.
Rewards Given: Miner gets full reward, and Ommers also get small rewards.
Example: Like winner gets prize, runners-up get smaller rewards.
State & Nonce Check: Ensures correct balances and transaction order.
Example: Like verifying bank balance and transaction history.
Difficulty Adjustment: If blocks are created too fast → difficulty increases
If too slow → difficulty decreases
Example: Like making exams harder/easier.
Difficulty Bomb (Ice Age): Difficulty increases over time to force shift to Proof of
Stake.
Example: Like increasing fuel price to push people toward electric vehicles.
ETHER
Ether is the main currency of the Ethereum network.
Why is Ether used?
[Link] for miners: Miners get Ether for verifying transactions and
creating blocks.
[Link] pay for smart contracts (EVM execution): Ether is used to run
programs (smart contracts) on the network.
[Link] buy Gas (Fuel of Ethereum): Ether is converted into gas, which is
needed to perform operations.
[Link] for computation: Every operation in the Ethereum Virtual
Machine (EVM) costs gas (paid using Ether).
Denominations of Ether
Denominations of Ether are the different units used to represent smaller or
larger amounts of Ether in the Ethereum network.
Common Ether Units
Wei → Smallest unit (1 Wei)
Babbage → 1,000 Wei
Lovelace → 1,000,000 Wei
Shannon (Gwei) → 1,000,000,000 Wei
Szabo → 1,000,000,000,000 Wei
Finney → 1,000,000,000,000,000 Wei
Ether → 1,000,000,000,000,000,000 Wei
 GAS
What is Gas?
Gas is the fee you pay to perform any operation on the Ethereum network.

Why Gas is needed?

It prevents infinite loops (since Ethereum Virtual Machine is Turing-complete)
It ensures users pay for using network resources
It helps miners/validators prioritize transactions

Every action (like transfer, contract execution) costs gas

More complex operations = more gas required
If gas is too low, transaction may not be accepted
If gas runs out, transaction fails but fee is still charged
 Formula for Transaction Cost
Total Cost = Gas Used × Gas Price
Gas Used → Amount of computation
Gas Price → Price per unit gas (in Ether)
 Messages
In Ethereum, a message is like a data packet sent between accounts.
It contains data + value (Ether)
Sent between:
Externally Owned Accounts (EOA)
Contract Accounts
Created when smart contracts use instructions like CALL or
DELEGATECALL(DELEGATECALL is a special low-level function in Ethereum smart
contracts that allows one contract to execute code from another contract, but in its own
context.)
Not stored permanently (exists only during execution)
Message Includes:
Sender address
Receiver address
Amount of Wei (Ether)
Input data (for contract execution)
Gas limit
 Message = “Instruction + Money sent between accounts”
Messages vs Transactions
Transaction → Created by users (EOA), stored on blockchain
Message → Created by contracts, temporary
 Calls
A call is like a function call(Asking a smart contract to execute a specific
task.) to a smart contract.

It runs locally on a node

No gas required (because it is read-only)
Does not change blockchain state
Used to read data from contract
 Mining
Mining is the process of adding new blocks (and cryptocurrency) to the
blockchain.
Miners are rewarded for doing this work, which motivates them to keep
the network secure and running.
Why is Mining Important?
It verifies transactions (ensures they are valid)
It prevents fraud and double-spending
It secures the network through complex computations
It rewards miners with cryptocurrency (like Ether)
What Does a Miner Do?
At a basic level, a miner performs these tasks:
Collects Transactions
Listens to the network and selects transactions to include in a block.
Handles Uncle Blocks (Ommers)
Includes “stale” or leftover blocks (called uncles/ommers) to improve fairness
and efficiency.
Earns Rewards
Gets rewarded for successfully mining a block.
Finalizes the Block
Computes the final valid state and adds the block to the blockchain.
Proof of Work (PoW)
Ethereum originally used Proof of Work
Miners solve complex mathematical problems
The first to solve it adds the block and gets rewarded
This ensures security but consumes a lot of energy
Shift to Proof of Stake (PoS)
Ethereum moved towards Proof of Stake
Instead of solving puzzles, users stake (lock) their
cryptocurrency
Validators are chosen based on their stake
 Different methods of mining
CPU Mining: CPU mining uses the computer’s processor to mine, mainly for testing or
learning purposes.
Example: Running mining using Geth on a personal laptop for a private blockchain.
GPU Mining: GPU mining uses a graphics card to perform faster calculations, making it
more efficient than CPU mining.
Example: Using Ethminer with an AMD graphics card to mine Ether.
Mining Rigs: Mining rigs are specialized systems with multiple GPUs working together
to increase mining power.
Example: A setup with 5 GPUs like AMD Radeon R9 380 connected to one motherboard for
mining.
Mining Pools: Mining pools are groups of miners who combine their computing power
and share rewards.
Example: Joining an online pool like EthereumPool to earn consistent rewards instead of
mining solo.
 Ethereum Network
The Ethereum network is a peer-to-peer (P2P) network, meaning there is no
central authority. Instead, multiple computers (called nodes) work together
to:
Maintain the blockchain
Validate transactions
Achieve consensus (agreement on the state of the network)
Types of Ethereum Networks
Ethereum networks are divided into three main types based on usage:
MainNet (Main Network)
This is the real, live Ethereum blockchain.
All actual transactions happen here using real Ether (ETH).
The version mentioned (Homestead) was one of Ethereum’s early stable
releases.
Think of MainNet as the production environment where real money
and real applications operate.
 TestNet (Test Network)
Example: Ropsten Testnet
Used for:
Testing smart contracts
Developing DApps (Decentralized Applications)
No real money is used (only test Ether).
Developers use TestNet to experiment safely before deploying to
MainNet.
 Private Network
A custom Ethereum network created by an individual or organization.
Built by generating a new genesis block (the first block).
Usually used in:
Enterprises
Organizations
Permissioned blockchain systems
Only selected participants can access and control this network.
Supporting protocol in Ethereum
Whisper and Swarm are supporting protocols (services/layers) in the Ethereum
ecosystem, used for messaging and storage respectively.

Whisper is a decentralized peer-to-peer messaging protocol in Ethereum

that allows nodes to communicate securely using encrypted and
untraceable (“dark”) messages without needing blockchain consensus. It is
mainly used for small, non-urgent communication between nodes.
Example: Like sending a secret encrypted message on a private chat app where
no central server can track or read your conversation.
 Swarm is a decentralized, peer-to-peer storage system where files are
stored across multiple nodes and identified using their content hash
instead of a central server. It is designed to be secure, fault-tolerant, and
resistant to attacks like DDoS in the Web 3.0 ecosystem.
Example: Like Google Drive, but instead of storing your files in one
company’s server, your data is spread across many computers worldwide,
making it harder to lose or attack.
Applications Developed on Ethereum
The DAO
A decentralized investment platform that allowed people to pool and invest funds.
It was hacked, which led to a major event called the
Ethereum hard fork to recover funds.
Augur
A decentralized prediction market where users can bet on outcomes (like elections, events).
Other DApps can be explored via platforms like Ethercasts.
Ethereum Clients & Tools
These are software used to interact with the Ethereum network:
Geth
Written in Go
Most popular Ethereum client
Used to run nodes and interact with blockchain
Eth
Developed in C++
Pyethapp
Python-based implementation
Parity
Fast and efficient
Developed by Ethcore
Light Clients (SPV)
Also called Simple Payment Verification (SPV) clients
Download only part of the blockchain
Suitable for:
Mobile phones
Tablets
Low-resource devices
Example wallet: Jaxx

Mist Browser
Mist
Not just a wallet
Used for:
Browsing DApps
Managing accounts
Handling smart contracts
It runs Geth in the background and syncs with Ethereum network.
Ethereum ecosystem includes DApps, clients (like Geth & Parity), wallets, and tools
used to interact with and manage the blockchain.