If Bitcoin is digital gold, Ethereum is often described as a global computer. It is the second-largest cryptocurrency and the foundation for much of the crypto ecosystem. Here is what beginners need to know.
What is Ethereum?
Ethereum is a decentralized platform that lets developers build applications on top of it. Its native currency is called Ether (ETH). Launched in 2015, Ethereum’s big innovation was the smart contract — code that runs automatically when conditions are met, without a middleman.
Why smart contracts matter
Smart contracts power decentralized finance (DeFi), NFTs, and thousands of apps. They let people lend, borrow, trade, and create digital assets in a trustless way — the rules are enforced by code on the blockchain rather than by a company.
ETH and gas fees
Every action on Ethereum requires a small fee called “gas,” paid in ETH, to compensate the network. Gas fees rise when the network is busy. Layer-2 networks like Arbitrum and Base now make transactions much cheaper.
How Ethereum secures itself
Ethereum uses “proof of stake,” where validators lock up ETH to help secure the network and earn rewards — a far more energy-efficient system than Bitcoin’s mining.
Getting started
You can buy ETH on any major exchange. To explore DeFi and NFTs, you will also want a Web3 wallet like MetaMask — ideally paired with a hardware wallet for security.
For informational purposes only; not financial advice. Always do your own research. See our Affiliate Disclosure.
