Ethereum is a public blockchain that also works as a shared computer. Its nodes keep and agree on the state of the Ethereum Virtual Machine (EVM), where apps and smart contracts run. ETH (ether) is the network’s native cryptocurrency. You pay transaction fees in ETH, and validators stake it to help secure the network. Ethereum’s main network, Mainnet, uses proof-of-stake. Separate “layer 2” networks handle some activity and report back to it.
The rest of this guide covers each of those pieces. Facts here come from ethereum.org’s documentation, dated 2026 where a date matters. The article gives no live price, supply figure or current fee, because those change constantly.
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What is Ethereum?
A blockchain is a public database shared across many computers. Blocks link to earlier blocks, and the network’s nodes agree on the state of the chain. Ethereum adds a computing layer to that idea. ethereum.org puts it this way: “Ethereum is a blockchain with a computer embedded in it.” That computer is the Ethereum Virtual Machine (EVM). The line is the site’s own editorial description, not a quote from a named person.
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What is ETH?
ETH is the native cryptocurrency of Ethereum. It has several jobs:
- Fees: you need it to pay for the computation your transactions use.
- Staking: validators put it up as collateral to take part in proof-of-stake.
- Collateral and unit of account: ethereum.org notes that ETH is important collateral in DeFi lending and a unit of account in NFT marketplaces.
New ETH is issued by protocol rules as validator rewards. The amount depends on how much ETH is staked and how well validators perform. The protocol also burns the base fee from transactions. Issuance and burning can offset each other depending on how busy the network is, so ETH should not be described as having a fixed supply cap.
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How are Ethereum and ETH different?
People often say “Ethereum” when they mean ETH, especially when talking about price. The usage is common but imprecise.
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|---|---|---|
| What it is | The blockchain network and computing platform | The network’s native cryptocurrency |
| What it does | Runs smart contracts and apps on the EVM | Pays fees, is staked by validators, and acts as collateral |
| “Price of Ethereum” | A network has no price | The thing that actually has a market price |
How does Ethereum work?
In short, you submit a transaction, nodes check and run it, and the shared state updates. Validators (below) bundle transactions into blocks. The network then agrees on those blocks.
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Timing is regular. Proof-of-stake time is divided into 12-second slots, and an epoch is 32 slots. Per ethereum.org, a validator may be selected to propose a block in a slot, and others attest to it.
Gas and transaction fees: what are they?
Gas measures the computational work an operation needs. Your fee is the gas used multiplied by the base fee, plus any priority fee.
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- Base fee: changes with network demand and is burned.
- Priority fee: a tip that makes your transaction more attractive to include. It can go to the validator.
A standard ETH transfer uses 21,000 gas units, according to ethereum.org. That is an amount of gas, not a fixed price. The ETH you pay still depends on the gas price at that moment. Complex contract interactions can use much more gas than a simple transfer. A failed transaction can still consume gas, because the computation was attempted.
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Ethereum switched from proof-of-work to proof-of-stake in September 2022. Instead of miners, validators secure the network.
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Running a validator directly
In the setup ethereum.org documents, you deposit 32 ETH into the deposit contract. You also run execution, consensus and validator software. Validators check blocks, attest to them, and may be chosen to propose them. Dishonest behavior, such as signing conflicting attestations, can cause part or all of the validator’s stake to be destroyed. That penalty is what makes the system economically secure.
Staking without running a validator
Holding or staking ETH does not automatically make you a validator. Some pooled staking services let people take part with less than 32 ETH, without running the software themselves. The arrangements differ from service to service. The risks depend on the method you choose and include custody, liquidity and smart-contract risk. Check the terms of any service before using it.
What is an Ethereum layer 2?
Layer 2s are companion networks that run on top of Ethereum. They process transactions separately and send a summary to Ethereum. For some activity this can mean lower fees.
- A layer 2 transaction is not the same as a Mainnet transaction. Its fees and security details vary by network.
- Costs change over time and by transaction type. A single “layer 2 fee” is not a meaningful number without naming the network and the date.
- Moving funds between networks uses a bridge. A bridge adds extra steps and its own risks.
Wallets and keys
Your ETH is recorded on Ethereum itself. A wallet is software or a device that gives you access to your account and signs transactions for you. Hardware wallets, which keep keys offline, are an option and not a requirement. Whatever you use, you are responsible for protecting your keys and recovery information. ethereum.org’s wallet guide was last updated February 24, 2026.
Common points of confusion
- Gas is not a subscription or flat price. It varies with the work done and with demand.
- 32 ETH is the direct-validator amount, not a universal minimum for earning staking rewards.
- Ethereum is not only for sending money. Much of its activity is programs executing on the EVM.
Sources and currency
This guide draws on ethereum.org’s introduction (updated April 22, 2026), its proof-of-stake documentation (updated August 31, 2026, with a site update shown on October 6, 2026), and its pages on ether, gas, networks and wallets. Fees, staking terms and layer 2 costs change with network activity. Check a live source before acting on any specific number.
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