Ethereum (ETH) News & Data

Ethereum is a decentralised computing platform and the second-largest cryptocurrency by market value. Where Bitcoin is designed mainly as digital money, Ethereum is a programmable network: it lets developers deploy “smart contracts” — self-executing code that powers applications from DeFi to stablecoins and digital collectibles. Its native asset, ether (ETH), pays for the computation. This page covers what Ethereum is, how it works, and how to follow it.

Smart contracts and the EVM

A smart contract is a program stored on the blockchain that runs exactly as written, without anyone able to alter it mid-execution. These contracts run on the Ethereum Virtual Machine (EVM), a shared runtime replicated across every node. Because contracts can call one another, developers compose them like building blocks — a property often called “money legos” that underpins much of DeFi.

Ether, gas and fees

Every action on Ethereum — sending ETH, swapping tokens, minting an asset — consumes “gas”, a measure of computational effort. Users pay gas fees in ETH, and those fees rise when the network is busy. Understanding gas is essential before interacting with any on-chain application; our glossary explains the key terms.

Proof of stake and The Merge

In 2022, in an upgrade known as The Merge, Ethereum switched from proof of work to proof of stake. Instead of miners, validators now secure the network by “staking” ETH as collateral; they earn rewards for proposing and confirming blocks and can be penalised for misbehaviour. The change cut Ethereum’s energy use dramatically and introduced staking yield as a feature of holding ETH.

Layer 2s and scaling

To handle more activity at lower cost, much of Ethereum’s usage has moved to “layer 2” networks that process transactions off the main chain and settle back to it. These are a major category of altcoins and a key reason the ecosystem can scale without changing Ethereum’s base layer.

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Tokens and standards

Much of Ethereum’s usefulness comes from token standards — shared technical rules that let different applications interoperate. The ERC-20 standard defines fungible tokens, where every unit is identical and interchangeable; most of the project tokens and many stablecoins you see in the market are ERC-20 tokens living on Ethereum. The ERC-721 standard defines non-fungible tokens (NFTs), where each token is unique. Because these standards are open, a wallet or exchange that supports one ERC-20 token can usually support them all.

Staking and validators

Since moving to proof of stake, Ethereum is secured by validators rather than miners. To run a validator independently you lock up 32 ETH as a deposit, and the protocol rewards honest participation while penalising misbehaviour by reducing the stake — a mechanism known as “slashing”. Users who do not want to run their own node can take part through staking services or pooled arrangements, which lower the entry barrier but add their own counterparty and smart-contract considerations.

How Ethereum differs from Bitcoin

Bitcoin was designed first and foremost as sound, scarce money. Ethereum was designed as a general-purpose platform for programs — its supply is not fixed at a hard cap, and its issuance schedule is governed differently. Bitcoin tracks balances using unspent transaction outputs, while Ethereum uses an account model closer to a bank ledger. The practical upshot: Bitcoin optimises for stability and predictability, while Ethereum optimises for flexibility, letting developers build applications that hold and move value automatically.

What Ethereum is used for

Ethereum is less a single product than a platform other things are built on, which is why it underpins so much of the wider crypto economy. Decentralised finance (DeFi) applications for lending, borrowing and trading run as smart contracts on Ethereum and networks compatible with it. Most stablecoins circulate as tokens on these networks. Non-fungible tokens, used to represent digital ownership of art, collectibles and in-game items, were popularised on Ethereum. So were “DAOs” — organisations whose rules and treasuries are managed on-chain by token holders.

This breadth is Ethereum’s defining feature and the source of much of its risk. Because anyone can deploy code, the ecosystem contains both carefully audited, long-running applications and hastily written or outright fraudulent ones. The network itself does not vouch for what is built on it. As with everything in crypto, the responsibility to evaluate a specific application — who built it, how long it has run, whether its code has been reviewed — falls on the user. The platform provides the rails; it does not certify the trains.

Frequently asked questions