What Is Ethereum (ETH)? Smart Contracts, Gas and Staking

If Bitcoin is digital gold, Ethereum is a world computer. Proposed by Vitalik Buterin in 2013 and launched in 2015, Ethereum lets anyone deploy programs — smart contracts — that run exactly as written, with no operator who can switch them off.

Ether vs. Ethereum

Ethereum is the network; ether (ETH) is its native asset. ETH pays for computation ("gas"), secures the network through staking, and serves as the base money of the Ethereum economy.

What are smart contracts?

A smart contract is code stored on the blockchain that executes when called. Most tokens you have heard of are smart contracts following standards like ERC-20 (fungible tokens) or ERC-721 (NFTs). Entire financial systems — exchanges, lending markets, stablecoins — run as contracts on the Ethereum Virtual Machine (EVM).

• ERC-20: interchangeable tokens (stablecoins, governance tokens).
• ERC-721 / ERC-1155: unique or semi-unique tokens (NFTs, game items).
• DeFi: protocols like Uniswap, Aave and MakerDAO are just contracts, not companies.

Proof of Stake

Since "The Merge" in September 2022, Ethereum no longer uses mining. Validators lock up 32 ETH to propose and attest to blocks; honest behavior earns rewards, dishonest behavior gets slashed. Read our staking explainer for how rewards and risks work.

Why gas fees matter

Every operation on Ethereum costs gas, paid in ETH. When the network is busy, fees can exceed the value of a small trade. Check live gas prices and estimate transaction costs with our gas tracker before you transact.