Definition
A decentralized, open-source blockchain with smart contract functionality. It is the foundation for thousands of decentralized applications (dApps).
In depth
Ethereum was proposed by Vitalik Buterin in 2013 and launched in July 2015. While Bitcoin functions primarily as digital currency, Ethereum is a programmable blockchain — a global computing platform where developers deploy code that runs without any possibility of downtime, censorship, or interference from any third party. These programs are called smart contracts, and they form the technical foundation of the entire DeFi (decentralized finance), NFT, and DAO ecosystem.
In September 2022, Ethereum completed "The Merge," transitioning from energy-intensive Proof of Work mining to Proof of Stake consensus — reducing the network's energy consumption by approximately 99.95%. Validators now secure the network by staking (locking up) ETH as collateral rather than running specialized mining hardware, and they earn staking rewards in return.
Ethereum's native currency, Ether (ETH), is used to pay for all computational operations (called "gas fees") on the network. The ERC-20 token standard, built on Ethereum, powers the vast majority of tokens, stablecoins, and DeFi protocols. The ERC-721 and ERC-1155 standards underpin NFTs and gaming assets.
Layer 2 networks — including Arbitrum, Optimism, and Base — have been built on top of Ethereum to offer faster transactions at dramatically lower cost, addressing the high gas fees that historically limited Ethereum's accessibility for everyday users.
Frequently asked questions
What is the difference between Bitcoin and Ethereum?
Bitcoin is primarily a decentralized digital currency and store of value with a fixed 21M supply. Ethereum is a programmable blockchain platform — its currency (Ether) powers smart contracts, DeFi applications, NFTs, and DAOs rather than serving primarily as a monetary asset.
What is gas in Ethereum?
Gas is the fee paid to validators for the computational resources required to process a transaction or execute a smart contract. Gas prices fluctuate with network demand and are denominated in gwei (1 gwei = 0.000000001 ETH). Layer 2 networks like Arbitrum typically reduce gas costs by 10–100x compared to Ethereum mainnet.
Can I earn yield on Ethereum?
Yes. You can stake ETH directly by running a validator node (requires 32 ETH minimum) or through liquid staking providers like Lido or Rocket Pool, which accept any amount and issue a transferable staking receipt token. Annual staking yields typically range from 3–5%, paid in newly issued ETH.
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