Ethereum
Last reviewed November 1, 2026
Bitcoin is mostly money. Ethereum is closer to a shared global computer that runs programs nobody can switch off on their own.
Vitalik Buterin described Ethereum in a 2013 white paper and the network went live in 2015. The idea was a blockchain that runs programs as well as recording payments. Those programs are called smart contracts.
Much of DeFi, most major stablecoins and many NFT projects run on Ethereum. Every action on the network is paid for in ETH.
Smart contracts
A smart contract is code stored on the blockchain that does exactly what it was written to do. An exchange like Uniswap is a set of such contracts. The upside: if the code doesn't allow changes, nobody can rewrite the rules. The downside: nobody can undo a bug either.
Gas and fees
Everything on Ethereum costs gas, priced in gwei, a billionth of an ether. Since the EIP-1559 upgrade in August 2021, part of every fee is burned and leaves circulation for good. When the network is busy, that base fee rises.
Our unit converter turns gwei into ETH.
The Merge
On 15 September 2022 Ethereum switched from proof of work to proof of stake. According to the Ethereum Foundation, the network's energy use fell by about 99.95%. Validators who post ETH as collateral have secured it since.
Layer 2
Block space on Ethereum is scarce and therefore pricey, so many apps moved to layer 2 networks such as Arbitrum, Optimism and Base. They batch many transactions and post a summary back to Ethereum. The Dencun upgrade in March 2024 made that much cheaper. More under blockchains.