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Ethereum is a public blockchain network that lets computers maintain shared data and run programs called smart contracts. ETH, also called ether, is Ethereum’s native asset: it pays for network computation and can be staked by validators who help secure the network. You do not need to own ETH or run a validator to understand how Ethereum works.
Ethereum and ETH are not the same thing
Ethereum is the network and the rules its computers follow. It keeps a shared record of transactions and application data, with network nodes checking the chain. ETH is the asset used within that network. A simple analogy is that Ethereum is the payment and application infrastructure, while ETH is the native value used to pay for some of its services; unlike a conventional payment system, however, Ethereum also supports programs that can update shared data.
ETH is not a share in a company, and owning it does not by itself confer ownership of Ethereum or a claim on its revenue. Its network uses include paying transaction fees and staking by validators. Its market price can change, and none of those functions makes it a guaranteed investment or a stable store of value.
What happens when you use Ethereum?
People commonly interact with Ethereum using a wallet. A wallet manages keys and lets its owner sign transactions, which communicate an instruction to the network—for example, sending ETH or asking a smart contract to perform an operation. The wallet is an authorization tool; it is not the Ethereum network itself.
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Nodes check transactions and maintain the blockchain, a sequence of blocks that refer to earlier blocks. Ethereum’s proof-of-stake consensus process lets validators participate in proposing and checking blocks and attesting to the chain. Ethereum.org documents slots spaced 12 seconds apart and epochs made up of 32 slots; these are protocol descriptions, not a promise that every transaction completes within one slot.
What are smart contracts?
Smart contracts are programs deployed on Ethereum’s execution environment, the Ethereum Virtual Machine (EVM). A user can call a contract’s functions by sending a transaction. Contracts can hold and update on-chain data, enabling applications such as marketplaces and financial services to operate according to programmed rules.
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“Smart” does not mean the program can judge whether an outcome is fair or safe. A contract will generally follow its code, and a confirmed on-chain interaction is usually difficult or impossible to reverse. Review what a transaction is authorizing and be cautious with unfamiliar applications. A wallet can help you sign an instruction; it cannot guarantee that a contract or transaction is safe.
What is gas, and why do Ethereum fees change?
Gas measures the computation required to process an Ethereum transaction. The network charges fees for that work in ETH, commonly using gwei to express small amounts; one gwei is 10-9 ETH. A more complex operation generally uses more gas, while the amount paid per unit of gas varies with demand and network conditions. Gas is therefore a fee mechanism, not one fixed charge for every transaction.
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Ethereum.org’s block documentation describes a 30 million gas target per block and a 60 million gas maximum. These are documented network parameters, not a user’s transaction fee or a permanent guarantee; protocol values can change. Proof-of-stake is a consensus method, not a promise of low fees. For a specific transaction, the fee estimate shown by a wallet or application is more relevant than a general figure.
How does Ethereum proof-of-stake work?
Ethereum uses proof-of-stake, not proof-of-work. Validators commit ETH and run client software to participate in checking and proposing blocks. Ethereum.org’s proof-of-stake overview describes a 32 ETH deposit for a solo validator, which also requires running execution, consensus, and validator software. That figure concerns solo validation; it is not a minimum balance for using Ethereum or holding ETH in a wallet.
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Ethereum.org says the network switched on proof-of-stake in 2022, describing it as more secure, less energy-intensive, and better suited to implementing new scaling solutions than the previous proof-of-work architecture. That is the documentation’s explanation of the change, not an independent guarantee of security or future performance.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Do you need a wallet or hardware device?
You can learn about Ethereum without owning ETH, and you do not need a physical device just to understand the network. To use applications or authorize transactions, people commonly use a wallet that signs with their keys. A hardware wallet is an optional physical approach to managing keys; Ethereum itself does not require one, and no particular device is endorsed here.
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What Ethereum’s basics do—and do not—tell you
- They tell you what ETH is used for: network computation fees and validator staking are two core uses.
- They do not tell you what ETH will be worth: protocol function does not predict market price or make an investment suitable for a particular person.
- They explain why transactions need care: contract calls can change on-chain state and generally cannot simply be undone.
- They do not mean all blockchains work alike: consensus, fees, and application design vary by network.
Official Ethereum documentation
- Technical intro to Ethereum
- Technical intro to ether
- Introduction to smart contracts
- Proof-of-stake
- Blocks
- Ethereum development documentation
- Interacting with smart contracts
- Proof-of-stake FAQ
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