What is Ethereum?

A blockchain that runs programs, not just payments.

At a glance: Currency symbol ETH (called ether). Launched July 2015. Proposed by Vitalik Buterin and a group of co-founders. Uses proof of stake since September 2022. Home of smart contracts, many stablecoins and thousands of other tokens.

More than digital money

Bitcoin was designed mainly to move and store value. Ethereum was designed to be a general-purpose platform: a shared global computer that anyone can build on. Its blockchain doesn't only record who owns what. It can also run small programs called smart contracts, which carry out agreed rules automatically, without a company needed to enforce them.

What is a smart contract?

Think of a vending machine. You put in the right amount, and the machine hands over the item without needing a shopkeeper. A smart contract works similarly: "if this condition is met, then do that", and the network guarantees the result. Developers use them to create lending services, trading platforms, games, collectables and new tokens.

Ether and gas fees

Ethereum's own currency is ether (ETH). It is used to pay for activity on the network. Each action, such as sending a payment or using a smart contract, costs a fee known as gas, paid in ether. When the network is busy, fees rise. To keep costs down, many users now use "layer 2" networks, which handle activity more cheaply and then settle the results on the main Ethereum chain.

From mining to staking: the Merge

Ethereum originally used proof-of-work mining like Bitcoin. In September 2022, in an upgrade called the Merge, it switched to proof of stake. Instead of miners, validators lock up their own ether (32 ETH to run a validator directly) as a deposit and are chosen to confirm blocks. Those who cheat can lose some of their deposit. The change cut the network's energy use by more than 99%. Many people also stake smaller amounts through exchanges or staking services, which carry their own risks.

What is built on Ethereum?

Decentralised finance (DeFi): lending, borrowing and trading apps that run on smart contracts.
Stablecoins: many dollar-linked coins are issued on Ethereum.
Tokens: thousands of other coins and tokens use Ethereum's standards.
NFTs: unique digital items such as artwork, tickets and in-game assets.

How is it different from Bitcoin?

Bitcoin has a fixed supply of 21 million and focuses on being a simple, secure store of value. Ethereum has no fixed cap, changes more often through upgrades, and aims to be a flexible platform for applications. Neither is guaranteed to hold or grow in value.

Risks

Volatile prices: you could lose everything you put in.
Buggy or malicious contracts: a flaw in a smart contract can lead to stolen funds, and mistakes can't usually be reversed.
Scams: fake tokens and phishing links are common, so only connect your wallet to sites you trust.
Competition: other blockchains offer similar features and may attract developers.

Following Ethereum prices on your smartphone

You don't need to sit at a computer to keep an eye on the price. This site works on phones, so you can open the rates page in your phone's browser and switch between US dollars, pounds sterling and euros.

Add it to your home screen. On an iPhone, open the site in Safari, tap the Share button and choose "Add to Home Screen". On Android, open the browser menu in Chrome and choose "Add to Home screen" (the wording varies a little by phone).
Use an exchange or wallet app. Most major exchange apps show live prices and charts, and many let you set price alerts that send a notification when a coin passes a level you choose. Look in the app's settings.
Try a price-tracking app. Several free apps in the App Store and Google Play let you build a watchlist without buying anything.

A word of caution: checking prices constantly can tempt people into rash decisions. Many people find it healthier to check once a day, or to set alerts and then leave it alone.

Next, read how blockchain works or see our wallet guide.