Ethereum explained: ETH, contracts and gas

THE SHORT ANSWER

Ethereum is a programmable blockchain that executes smart contracts. ETH is used to pay transaction fees and help secure the network through proof of stake. Ethereum is the network; ETH is its native asset.

Ethereum’s origins

Vitalik Buterin introduced the project in 2013 with the idea of a blockchain that could execute programs.The network launched in 2015. Its applications may combine smart contracts with interfaces and services hosted elsewhere.

Programs on the blockchain

Smart contracts execute their code when called by a transaction. They may contain errors or administrative permissions.

Rules executed by the network

The result depends on code, data and incoming calls. Automation does not guarantee the absence of bugs.

Decentralized Applications (dApps)

A dApp uses smart contracts for part of its operation. Some components may depend on an operator.

ETH and transaction fees

Ether, or ETH, is Ethereum’s native asset. It is used for transaction fees and staking.

Gas measures computational work

Gas measures resources needed for an operation. On Ethereum, fees depend on gas used and its price, paid in ETH. A transaction that executes and then reverts can still incur a fee.

An evolving network

Shared software and rules

Different teams develop client software and applications. Running a node to verify the chain does not require a 32 ETH deposit: that deposit is needed to activate a validator.

Proof of stake and layer 2

Ethereum has used proof of stake since September 2022. Rollups execute operations on layer 2 and publish data or proofs to Ethereum. Their fees, withdrawal times and risks differ; they are not interchangeable.

Key takeaway

Distinguish the Ethereum network, its ETH asset and the applications that use it. Each has different characteristics and risks.

Sources and further reading

Page updated on 16 September 2026
Documentation checked on 16 September 2026 · WhyTheBlockchain · Editorial approach