What is Ethereum?
What Ethereum is, how it differs from Bitcoin, what smart contracts actually do, and what you can do with it in 2026.
Updated June 2026 ยท Reviewed by the PipeFlare team
Ethereum is a programmable blockchain that runs smart-contract apps without a company in the middle
It hosts most DeFi apps, NFTs, stablecoins, and Layer 2 networks you'll touch in crypto in 2026
Read the official source โCategory
Smart contract platform
Difficulty
Beginner
Where you'll see it
Wallets, DeFi apps, NFT marketplaces, USDC and stablecoin transfers, Layer 2s like Base and Arbitrum
First introduced
July 30, 2015 (Frontier release)
About what is ethereum
Ethereum is a public blockchain that runs apps, not just payments. People often call it a global computer because anyone can deploy code, called smart contracts, that runs the same way for everyone. It launched on July 30, 2015, and today it hosts most DeFi apps, NFTs, stablecoins, and Layer 2 networks in crypto. Its native coin is ETH, which pays the network's fees.
How it actually works
Every Ethereum transaction either moves ETH or runs a smart contract. Since The Merge on September 15, 2022, Ethereum runs on proof of stake. Validators lock 32 ETH each and take turns proposing a new block roughly every 12 seconds. Fees are measured in gas and priced in gwei (one-billionth of an ETH). A plain ETH transfer costs 21,000 gas units. Since the London upgrade in August 2021, the base part of each fee is burned, removing ETH from supply. Most everyday activity in 2026 happens on Layer 2 networks like Base, Arbitrum, and Optimism, which batch many transactions and post the data back to Ethereum for security.
Start here
- 1Install a self-custody wallet that supports Ethereum, like MetaMask or Rabby.
- 2Bridge or buy a small amount of ETH on a Layer 2 like Base or Arbitrum to keep fees low.
- 3Try a small swap on a known app like Uniswap to feel how a smart contract works.
- 4Read every wallet approval screen before signing โ that is where most scams happen.
Strengths
- Programmable โ supports swaps, lending, stablecoins, NFTs, and more on one network.
- Largest developer ecosystem in crypto, with mature tools, docs, and audits.
- Layer 2 networks make transactions cheap and fast for everyday use.
Common misunderstandings
- Mainnet gas can spike to several dollars during busy periods.
- Smart contract bugs, scam tokens, and phishing approvals can drain a wallet.
- Failed transactions still cost gas, so user mistakes have a real price.
Common questions
How is Ethereum different from Bitcoin?
Bitcoin is built to be digital money โ a simple, secure ledger of who owns how much. Ethereum is a general-purpose platform that can also run programs called smart contracts. That is why most DeFi apps, NFTs, and stablecoins live on Ethereum and not on Bitcoin.
What is a smart contract?
A smart contract is code that lives on Ethereum and runs automatically when someone calls it. Once deployed, no single person can stop it or change its rules. Apps like Uniswap and Aave are made of smart contracts that hold funds and follow public code.
What does proof of stake mean for Ethereum?
Ethereum switched to proof of stake on September 15, 2022, in an upgrade called The Merge. Validators put up 32 ETH as collateral and take turns proposing blocks every 12 seconds. The switch cut Ethereum's energy use by about 99.95% compared to mining.
Why do people use Layer 2 networks?
Layer 2 networks like Base, Arbitrum, and Optimism bundle many transactions off the main chain and post compressed proofs back to Ethereum. They are often 10 to 100 times cheaper than mainnet while still inheriting its security. By 2026, most everyday Ethereum activity happens on L2s.
Is Ethereum the same thing as ETH?
No. Ethereum is the network; ETH (ether) is the cryptocurrency you use to pay fees on it. When an exchange shows a price for 'Ethereum,' it is really showing the price of ETH.
Sources
Related guides
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