Ethereum is the foundation for a new era of the internet:
- An internet where money and payments are built in.
- An internet where users can own their data, and your apps don’t spy and steal from you.
- An internet where everyone has access to an open financial system.
- An internet built on neutral, open-access infrastructure, controlled by no company or person.
Ethereum is programmable, which means that it is open for developers to build new kinds of applications, known as "dapps". Dapps, short for "decentralized applications" leverage blockchain technology to ensure trustworthiness: once they are live on Ethereum, they will always run as programmed. They can manage custody of digital assets to create new kinds of financial applications. The decentralization implicit in their execution on the blockchain means that no single entity or person controls them.
The term transaction refers to the signed data package that stores a message transferred from one externally-owned account to another on the blockchain. Transactions can be categorised into two main categories:
- Value Transfer: A value (in Ether) is transferred one externally owned account to another.
- Contract execution: Here, a function/method call is made from an externally owned account to a contract account. These types of transactions can be further chained e.g., the contract account can make several internal transactions before calling another contract account or returning back. Any type of transaction execution on Ethereum costs money - or gas.
Gas refers to a special unit used in smart-contract-enabled blockchain networks. It is a proxy for how much complexity or work a smart contract requires for its execution. Every value transfer or contract execution on Ethereum is associated with a gas cost.