What Is Ethereum? The Blockchain That Runs Programs

Ethereum is a blockchain that does more than move money: it runs programs. Bitcoin's network keeps a list of who owns what. Ethereum keeps that list too, but it also stores small programs called smart contracts and runs them for anyone who pays the fee. That is why most of the crypto apps you have heard of, from Uniswap to Aave to nearly every NFT, were built on it.

What makes Ethereum different from Bitcoin?

If Bitcoin is a shared notebook that records payments, Ethereum is a shared computer. Thousands of machines run the same instructions and agree on the result, so a program published there keeps working whether or not the people who wrote it are still around. Ethereum launched in 2015, led by Vitalik Buterin and a small founding group, and traded Bitcoin's deliberate simplicity for flexibility.

What are ether and gas?

Ether, or ETH, is the network's own coin. You need a little of it to do anything, because every action costs gas: a fee paid to the people running the network, priced by how much work your action takes. Sending ETH is cheap, and a complicated swap costs more. Fees climb when the network is busy, which is why many people now use Layer 2 networks such as Arbitrum and Base, which bundle transactions together and settle them back on Ethereum for a fraction of the cost.

Who keeps Ethereum running?

Validators. Since a 2022 upgrade known as the Merge, Ethereum has used staking rather than mining: people lock up ETH as a deposit, take turns proposing blocks, and lose part of that deposit if they cheat. The change cut the network's energy use by more than 99 percent overnight.

The cheapest way to see any of this for yourself is to put a few dollars of ETH in MetaMask, move it to a Layer 2, and make one small transaction. Keep the amount tiny the first time, and treat the fee you pay as the price of the lesson.