Ethereum is a public blockchain that runs programs called smart contracts, and ether (ETH) is its native cryptocurrency. ETH pays the network's transaction fees, called gas. Launched in July 2015, Ethereum has used proof of stake since September 2022, so validators rather than miners add new blocks in 12-second slots, as of September 2026.
Ethereum is a public blockchain that anyone can use to send money and run apps. It is kept running by thousands of independent computers around the world, not by one company, and it has no CEO. Its native currency is ether, or ETH, which pays for everything done on the network.
Bitcoin was built mainly as digital money. Ethereum was built to run programs called smart contracts, which power stablecoins, lending and trading apps, digital collectibles and more. This guide explains what Ethereum is, who created it, how it works today and what the risks are. Facts about the network are as of September 2026.
When people talk about buying Ethereum, they mean buying ETH. To check what ETH costs today, see the Ethereum price and payment options.
What is Ethereum, in simple terms?
Ethereum is a shared computer that no single person or company owns. Thousands of computers, called nodes, each keep a copy of the same blockchain and follow the same rules, so they all agree on who owns what and what each program has done.
Think of a spreadsheet copied onto thousands of machines. Every 12 seconds or so, a new batch of edits is added. Each machine checks the edits with the same formulas, so every copy stays the same. Nobody can quietly change an old entry, because everyone else would reject it. That shared record is the blockchain.
Unlike a simple ledger, this spreadsheet can also hold programs, called smart contracts, which anyone can use by sending a transaction. No app store sits in the middle, and no company can switch them off.
Changes to Ethereum itself are proposed in public as Ethereum Improvement Proposals (EIPs). According to ethereum.org, they are adopted only if the wider community supports them. The Ethereum Foundation, a non-profit organization, still helps fund research and development, but it does not control or lead the network.
How is Ethereum different from Bitcoin?
Bitcoin was designed as digital money. Ethereum was designed as a platform for programs, with its own currency to pay for them. Both are public blockchains that no company controls, but they differ in supply, security model and timing.
| Feature | Bitcoin (BTC) | Ethereum (ETH) |
|---|---|---|
| Launched | 2009 | 30 July 2015 |
| Main purpose | Digital money | A platform for smart contracts and apps, with ETH as its currency |
| Supply | Fixed at 21 million coins | No fixed cap: new ETH goes to validators, and part of every fee is burned |
| Who adds blocks | Miners (proof of work) | Validators (proof of stake since 15 September 2022) |
| Block timing | About every 10 minutes on average | 12-second slots |
One way to picture it: Bitcoin is like a calculator that does one job, money, very well. Ethereum is more like a smartphone that can run many apps, and money is one of them. For a deeper side-by-side look, read Bitcoin vs Ethereum: how they differ, or start with what Bitcoin is.
Who created Ethereum?
Ethereum was proposed by Vitalik Buterin, who published its whitepaper on 27 November 2013. In 2014, co-founders including Gavin Wood and Joseph Lubin joined the project, according to ethereum.org. Wood wrote the Yellow Paper, the technical definition of the protocol, released in April 2014.
The project raised its early funding through one of the first crypto crowdfunding campaigns. The ether sale opened on 22 July 2014, ran for 42 days and accepted bitcoin as payment. The money went into building the software.
The network went live on 30 July 2015 with a first release called Frontier, aimed at developers. Today, ethereum.org stresses, Ethereum has no CEO, board or central authority: developers, node operators, validators and users run and shape it together.
One early event still matters today. In July 2016, after an attack on a project called The DAO drained 3.6 million ETH, most votes backed a change to the network that returned the funds. Some miners refused, and their version of the chain carried on as Ethereum Classic, a separate coin.
What is Ethereum used for?
Ethereum is used to send value and to run apps that do not need a company in the middle. All of these apps are smart contracts, and every transaction pays its fee in ETH. Five common uses described on ethereum.org:
- Stablecoins: tokens designed to hold a steady value, often one US dollar, so people can move dollar-like money across the network. See what a stablecoin is.
- Decentralized finance (DeFi): apps for lending, borrowing and trading tokens that anyone with an internet connection can use. See what DeFi is and what a decentralized exchange (DEX) is.
- NFTs: tokens that are each unique, used for digital art, collectibles and game items. See what an NFT is.
- DAOs: organizations that members own together and run with shared rules written in smart contracts, often voting with tokens.
- Layer 2 apps: the same kinds of apps running on networks built on top of Ethereum, at a lower cost per transaction (see the layer 2 section below).
Many of these apps use tokens. A token is a smart contract that keeps track of who owns how much of something. A common standard for interchangeable tokens is called ERC-20. ETH itself is not an ERC-20 token: it is older than the standard and is the network’s native currency.
ETH also has jobs of its own. It pays every fee, it is the deposit validators put up to secure the network, and many people simply hold it or send it to others. To see what an amount of ETH is worth in your currency today, use the Ethereum calculator.
What are smart contracts and gas?
A smart contract is a program stored at its own address on the Ethereum blockchain, and gas is the unit that measures how much computing work each action takes. Contracts run exactly as written whenever someone sends them a transaction, and the sender pays for the gas in ETH.
Ethereum.org compares a smart contract to a vending machine. You put in the right money, choose a snack and get it, with no cashier involved. A smart contract works the same way: the rules are in the code, and the code carries them out. Anyone can deploy one by paying a fee. By default a contract cannot be deleted, and interactions with it cannot be reversed. For more, read what a smart contract is.
Every action on Ethereum uses gas. A simple ETH transfer uses 21,000 gas, and using an app uses more. The fee has two parts: a base fee, set by the network according to demand, and a tip, called a priority fee, for the validator who includes the transaction. Since the London upgrade in August 2021, the base fee is burned, which means it is permanently removed from circulation.
Fees are usually quoted in gwei, which is one billionth of an ETH. They rise when the network is busy and fall when it is quiet. You pay even if a transaction fails, because the network still did the work. Charging for every action also stops people from flooding the network with spam. For a worked example of the fee maths, see how Ethereum works.
How does Ethereum reach consensus?
Ethereum reaches agreement through proof of stake. Since the Merge on 15 September 2022, validators who lock up ETH as a deposit propose and check new blocks, and miners no longer play any role. According to ethereum.org, as of September 2026:
- Each validator must deposit at least 32 ETH into a deposit contract.
- Time is split into 12-second slots. In each slot, one validator is chosen at random to propose a block.
- Committees of other validators vote on whether that block is valid.
- A block becomes final once votes representing at least two-thirds of all deposited ETH back it. Undoing it after that would cost an attacker a huge amount of ETH.
- Validators that cheat can be “slashed”: part of their deposit is destroyed and they are removed.
Before the Merge, Ethereum used proof of work, the mining system Bitcoin still uses. The switch cut Ethereum’s energy use by about 99.95%, according to ethereum.org. It was never meant to lower fees, and it did not. ETH holders did not need to do anything with their funds or wallets. To learn more, read what proof of stake is.
What are layer 2 networks?
Layer 2 networks are separate blockchains built on top of Ethereum. They process transactions more cheaply, then post the transaction data back to Ethereum, which is called layer 1.
The most common type is a rollup. It bundles hundreds of transactions into one transaction on Ethereum, so everyone in the bundle shares the layer 1 fee. Optimistic rollups assume transactions are valid unless someone challenges them. Zero-knowledge rollups post a mathematical proof that they are valid.
Ethereum now relies on rollups to grow. The old plan to split Ethereum into many “shard chains” was dropped from the roadmap, because rollups developed faster than expected. Recent upgrades instead made it cheaper for rollups to post data. Dencun (March 2024) added “blobs”, a cheaper and temporary space for rollup data. Pectra (May 2025) raised the target number of blobs per block from 3 to 6. Fusaka (December 2025) made room for more blob data without every node having to store all of it.
Layer 2 networks have trade-offs. Ethereum.org notes that many are still young and somewhat experimental, and that none is as battle-tested as Ethereum itself. Many use the same style of address as Ethereum, so it is easy to send funds on the wrong network. Always check which network a wallet or service expects before you send.
How has Ethereum changed since 2015?
Ethereum changes through planned network upgrades that every node adopts at the same time. These are the main milestones as of September 2026:
| Date | Upgrade | What changed |
|---|---|---|
| 30 July 2015 | Frontier | The network went live, first for developers |
| 20 July 2016 | DAO fork | Funds taken in The DAO attack were returned; the unchanged chain became Ethereum Classic |
| 1 December 2020 | Beacon Chain | The proof-of-stake chain started running alongside the main network |
| 5 August 2021 | London | New fee system (EIP-1559): a base fee that is burned, plus a tip |
| 15 September 2022 | The Merge | Ethereum switched from proof of work to proof of stake |
| 12 April 2023 | Shapella | Validators could withdraw the ETH they had locked up |
| 13 March 2024 | Dencun | Blobs made data for layer 2 networks much cheaper |
| 7 May 2025 | Pectra | Accounts that can act like smart contracts (EIP-7702), a higher balance limit per validator and more blob space |
| 3 December 2025 | Fusaka | PeerDAS, which lets nodes check blob data without storing all of it |
You may still see the name “Ethereum 2.0” or “Eth2”. It was an old label for the upgrades that led to proof of stake, and ethereum.org no longer uses it. There was never a separate ETH2 coin, and ethereum.org warns that anyone telling you to swap old ETH for new ETH is likely a scammer.
The next upgrade, called Glamsterdam, was still in development as of September 2026. Outside the network itself, in May 2024 the US Securities and Exchange Commission approved rule changes that allowed US stock exchanges to list exchange-traded products holding ether.
What are the risks?
ETH is a volatile asset, and Ethereum’s openness brings risks of its own. The main ones are:
- Price swings: ETH’s price can rise or fall sharply in a short time. Nothing in this guide is a price prediction.
- Smart-contract bugs: an app’s code runs exactly as written, mistakes included. Ethereum.org notes that Ethereum products, like any software, can suffer from bugs and exploits.
- Scams: fake websites, fake support agents, fake “ETH2” swaps and requests for your seed phrase are common. Learn how to spot phishing attacks.
- Mistakes you cannot undo: confirmed transactions cannot be reversed, so a wrong address or the wrong network can mean lost funds.
- Layer 2 and bridge risk: moving ETH between networks adds extra software, and extra things that can go wrong.
For a fuller look at these risks and how to reduce them, read is Ethereum safe to buy?
How do you buy ETH?
You buy ETH through a crypto exchange and have it sent to a wallet whose keys you control. The step-by-step guide to buying Ethereum walks through the whole process.
Set up your wallet first. How to open an Ethereum wallet explains the options, and are Ethereum addresses case-sensitive? explains why some addresses mix capital and small letters. Never share your seed phrase with anyone.
You do not need to buy a whole ETH. Ether can be split into tiny units: the smallest, called wei, is 0.000000000000000001 ETH. Minimum purchase amounts are a separate matter, so check the account limits and payment methods that apply to you. When you are ready, see the Ethereum price and payment options.
Frequently asked questions
Sources
- ethereum.org: What is Ethereum? (checked September 2026)
- ethereum.org: Timeline of all Ethereum forks (checked September 2026)
- Ethereum Foundation blog: Launching the ether sale (22 July 2014) (checked September 2026)
- Ethereum Foundation blog: Ethereum launches (30 July 2015) (checked September 2026)
- ethereum.org: What is ether (ETH)? (checked September 2026)
- ethereum.org: Intro to ether (checked September 2026)
- ethereum.org: Introduction to smart contracts (checked September 2026)
- ethereum.org: Gas and fees (checked September 2026)
- ethereum.org: Proof-of-stake (PoS) (checked September 2026)
- ethereum.org: The Merge (checked September 2026)
- ethereum.org: What is layer 2? (checked September 2026)
- ethereum.org: Ethereum roadmap (checked September 2026)
- ethereum.org: Dencun (checked September 2026)
- ethereum.org: Pectra (checked September 2026)
- ethereum.org: Fusaka (checked September 2026)
- ethereum.org: Stablecoins (checked September 2026)
- ethereum.org: Decentralized finance (DeFi) (checked September 2026)
- ethereum.org: Non-fungible tokens (NFTs) (checked September 2026)
- ethereum.org: Decentralized autonomous organizations (DAOs) (checked September 2026)
- ethereum.org: ERC-20 token standard and ethereum.org: Wrapped ether (checked September 2026)
- bitcoin.org: Frequently asked questions (checked September 2026)
- ethereumclassic.org: Proof of work (checked September 2026)
- US SEC: Order approving the listing of ether-based exchange-traded products (Release No. 34-100224, 23 May 2024) (checked September 2026)
