What is Ethereum?
Ethereum is a network that runs programs. ETH is the coin that pays for it.
Ethereum is a blockchain that can run programs called smart contracts, which power tokens, stablecoins, trading apps and more. ETH (ether) is its native coin, used to pay transaction fees (gas) and staked by validators to secure the network.
Ethereum vs. ETH
Ethereum is the network: a shared computer made of thousands of nodes. ETH, or ether, is the coin that lives on it. People say "Ethereum" for both, but the difference matters when you're reading fees or prices.
Smart contracts
A smart contract is a program stored on the blockchain that runs exactly as written when someone interacts with it. Nobody can quietly change its rules or stop it from running. A simple example: "if this address sends 1 ETH, send back 2,000 of these tokens."
Smart contracts are what make possible:
- Tokens: most crypto tokens, including big stablecoins, are smart contracts (see coin vs. token).
- Decentralized finance (DeFi): lending, borrowing and trading without a company in the middle.
- NFTs: unique tokens that represent ownership of a digital item.
"Runs exactly as written" includes the mistakes. Bugs in smart contracts have led to large losses, and a bad contract you approve in your wallet can drain your tokens.
Gas: paying for computation
Every action on Ethereum costs gas, paid in ETH. Simple transfers use little gas; complex app actions use more. Gas prices are quoted in gwei, a billionth of an ETH. See transaction fees or work one out with the network fee calculator.
How Ethereum is secured
Ethereum originally used mining like Bitcoin. In September 2022, an upgrade called the Merge switched it to proof of stake: validators lock up 32 ETH each to take part, and can lose some of it if they break the rules. The switch cut Ethereum's energy use by about 99.95%.
A block is added every 12 seconds. To handle more activity cheaply, much of it now happens on layer 2 networks that settle back to Ethereum.
Supply
Unlike Bitcoin, ETH has no fixed maximum supply. New ETH is issued to validators, and part of every transaction fee is permanently destroyed ("burned"). Whether the total grows or shrinks depends on how busy the network is.
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Frequently asked questions
Who created Ethereum?
It was proposed by Vitalik Buterin in 2013 and launched in July 2015 with a group of co-founders.
What is gwei?
A tiny unit of ETH: one billionth (0.000000001) of an ETH. Gas prices are quoted in gwei because they're small numbers in ETH terms.
What is the symbol for ETH?
Ether's symbol is Ξ (the Greek capital letter Xi). Its ticker on exchanges is ETH.
How many ETH are there?
Roughly 120 million, and there's no fixed maximum. The total rises or falls slightly depending on how much is issued to validators versus burned in fees; sites such as ultrasound.money track it live.
Is Ethereum better than Bitcoin?
They do different things. Bitcoin focuses on being scarce, secure digital money. Ethereum is a platform for programs and tokens. Many people hold both for different reasons.
Where to next
Sources
- What is Ethereum? (ethereum.org)
- Gas and fees (ethereum.org)
- The Merge (ethereum.org)
- Proof of stake (ethereum.org)
Written for beginners and checked against the sources listed. Last reviewed October 26, 2026. This page is educational and is not financial, tax or legal advice. How we write and check pages.