What is Ethereum?

Ethereum is a decentralized computing platform. Where Bitcoin is optimized to be money, Ethereum is optimized to be a general-purpose settlement layer: it lets anyone deploy small programs — called smart contracts — that run exactly as written, enforced by a global network of nodes.

Smart contracts, not payments

A smart contract is just code stored on the blockchain. Once deployed, it lives at an address, holds its own balance, and anyone can call its functions by sending a transaction. Uniswap is a smart contract. MakerDAO is a collection of smart contracts. An NFT collection is a smart contract. The network does not care what the contract does; it just guarantees the code runs the same way for everyone.

This is what people mean by "programmable money." Instead of trusting a bank to execute a loan or an escrow agreement, you trust the code — and the code is open-source, auditable, and running on a network nobody controls.

Ether, gas, and the EVM

Ethereum's native asset is ether (ETH). You need ETH to pay for computation on the network; the fee is called gas, and it is denominated in a small unit called gwei. More complex operations cost more gas. When the network is busy, fees rise, and simple transfers can briefly cost several dollars.

The execution environment is called the Ethereum Virtual Machine (EVM). Dozens of other chains — BNB Chain, Polygon, Avalanche, Arbitrum, Base — run EVM-compatible software so that Solidity code can be redeployed across them with minimal changes. The EVM has become a de facto standard the way the x86 instruction set became one for PCs.

Proof-of-stake and the merge

Ethereum switched from proof-of-work to proof-of-stake in September 2022 in an upgrade known as The Merge. Instead of miners burning electricity, validators lock up 32 ETH as collateral and take turns proposing blocks. Misbehave and your stake gets "slashed." The change cut the network's energy consumption by roughly 99.95 percent.

Rollups and the future

Base-layer Ethereum is deliberately conservative — it prioritizes security and decentralization over raw throughput. Most user activity now happens on rollups: layer-2 networks like Arbitrum, Optimism, Base, and zkSync that batch thousands of transactions and post compressed proofs back to Ethereum. The rollup-centric roadmap is Ethereum's long-term scaling plan, and for everyday users it is already reality: you transact on L2 for pennies, and Ethereum itself becomes the settlement and data-availability layer underneath.