What Is Ethereum (ETH)?
Also known as: ETH, Ether
In short
Ethereum is an open-source, programmable blockchain platform designed to run smart contracts and decentralized applications; its native cryptocurrency, Ether (ETH), is used to pay transaction fees and to secure the network through Proof of Stake.
Ethereum was proposed in a white paper published by Vitalik Buterin in 2013, and its mainnet launched in 2015. Unlike Bitcoin, it is designed not only for value transfer but for general-purpose programs that run on the Ethereum Virtual Machine (EVM). Developers can deploy smart contracts written in languages like Solidity to the network; each transaction pays a gas fee based on the amount of computation it uses. A significant part of DeFi protocols, stablecoins, NFTs, and DAOs has developed on Ethereum and on networks that use its technology.
With The Merge in September 2022, the network moved from Proof of Work to Proof of Stake, and its energy consumption fell by more than 99 percent. Becoming a validator requires staking at least 32 ETH. The Shapella upgrade in 2023 made it possible to withdraw staked ETH, while the Dencun upgrade in March 2024 reduced the costs of layer 2 networks with EIP-4844. ETH has no fixed supply cap, but part of the transaction fees is burned through EIP-1559.
Ethereum follows a roadmap that largely delegates scaling to rollup-based layer 2 networks such as Arbitrum and Optimism. High fees on the mainnet during busy periods, fragmentation of the ecosystem across layers, and smart contract bugs are among the network's known challenges.
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