How Does Ethereum Work?
Bitcoin and Ethereum also store their transaction history in the block chains, but Ethereum's blockchain does more than that. In addition to the transaction date, each node in the Ethereum network must download the latest status or current information of each smart contract on the network, the residual of each user, and all smart contract code and stored parts.
The Ethereum blockchain can be defined as a process-based state machine. In computer science, a state machine is defined as a machine that can read a set of inputs and go to a new state based on those inputs. When the processes are executed, the machine goes into another state.
In Ethereum, which has millions of transactions in each case, transactions are grouped together into chained/linked blocks along with their past blocks. The process must go through a verification process called mining before being registered in the ledger.
Mining is that a group of nodes completes the proof of work as a mathematical puzzle with computing power. Miners are the backbone of the Ethereum network because they not only verify transactions and other transactions within the network, also produce new tokens (ETH).