What Is Ethereum?
An introduction to Ethereum, its programmable blockchain, ether, and network validation.
Jump to section
What to remember
- Ethereum is the network; ETH is the asset native to that network — the two terms aren't interchangeable.
- Smart contracts are programs deployed to Ethereum, executed by the network according to their own rules, not one company's private server.
- Ethereum uses proof of stake, where validators commit ETH as a condition of participating — staking carries real financial and technical risk, not a guaranteed return.
- Gas fees vary with demand for block space; Layer 2 networks can reduce this, but each has its own specific bridge and network to understand first.
Ethereum in plain language
Ethereum is a public blockchain designed to record transactions and run programs called smart contracts. These programs can create applications with rules that execute on the network rather than on one company's private server.
Ether and the Ethereum network
Ether, commonly called ETH, is Ethereum's native asset. It is used to pay for computation and data storage on the network and can also be transferred between addresses. Ethereum is the network; ETH is the asset native to that network.
"Ethereum" and "ETH" aren't interchangeable
Ethereum is the network — the set of rules, computers, and smart contracts that keep it running. ETH is just the asset native to that network, used to pay for computation. Getting this distinction right makes the rest of Ethereum's design (gas fees, staking, smart contracts) click into place faster.
Smart contracts and applications
Smart contracts are programs deployed to Ethereum. Users interact with them by submitting transactions, and the network executes the code according to its current state and the contract's rules. Applications built from these contracts can include exchanges, lending systems, games, and digital-asset registries.
Proof of stake
Ethereum uses proof of stake. Validators commit ETH as a condition of participating in block proposal and verification. The protocol can penalize certain dishonest or unavailable behavior, while other participants verify proposed blocks. Staking involves technical and financial risks and is not a guaranteed return.
Why fees vary
Every operation consumes network resources, measured in gas. When demand for block space rises, users may compete by offering higher fees. Layer 2 networks can process activity through related systems and later settle information to Ethereum, but users still need to understand the specific network and bridge they are using.
What to remember
- Ethereum is the network; ETH is the asset native to that network — the two terms aren't interchangeable.
- Smart contracts are programs deployed to Ethereum, executed by the network according to their own rules, not one company's private server.
- Ethereum uses proof of stake, where validators commit ETH as a condition of participating — staking carries real financial and technical risk, not a guaranteed return.
- Gas fees vary with demand for block space; Layer 2 networks can reduce this, but each has its own specific bridge and network to understand first.
Part of these learning paths
Related research and concepts
Gas Limit
Read the Gas Limit glossary definition
Ethereum
Read the Ethereum glossary definition
Proof of Stake
Read the Proof of Stake glossary definition
Smart Contract
Read the Smart Contract glossary definition
Ethereum
Read the Ethereum research page
Staking APY Calculator
Open the calculator
Layer 2
Read the Layer 2 glossary definition
Bitcoin vs. Ethereum: A Structural Comparison
Read the research article
Spot Crypto ETFs Explained
Read the research article