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Ethereum

Ethereum is a public blockchain network where developers can build apps. Ether, or ETH, is the network’s native cryptocurrency.

Last updated • 2 min read
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What is Ethereum?

A blockchain is a digital record of transactions that many computers check. Ethereum records not only payments, but also what happens in apps on the network.

Those apps often use smart contracts. These are programs that automatically carry out predefined rules. Ethereum uses Proof of Stake: validators lock up ETH as collateral and help check transactions.

If you send ETH or use a smart contract, you pay network fees in ETH. These fees can rise when many people want to use the network at the same time.

An example of Ethereum

Imagine you want to exchange ETH for a token in an app on Ethereum. Once you approve it, a smart contract carries out the exchange according to its predefined rules.

You also pay network fees in ETH for the exchange. The token you receive is a different asset from ETH, even though it runs on Ethereum.

Why is Ethereum important in crypto?

Ethereum is the foundation for applications such as decentralized finance services, stablecoins, and NFTs. That’s why crypto news often covers network fees, staking, changes to the protocol, and smart contract security.

News about faster or cheaper transactions often covers Layer 2 networks. They process transactions outside Ethereum’s base layer and use Ethereum for parts of their security or settlement.

A secure Ethereum network doesn’t automatically mean every app on it is secure. Smart contract bugs, incorrect permissions, or stolen access keys can lead to losses. Confirmed transactions usually can’t be reversed through a central customer support team.

Disclaimer: This content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. The information provided may be incomplete, inaccurate, or outdated and should not be relied upon as such. Nothing on this website should be considered a recommendation to buy, sell, or hold any cryptocurrency. Investing in crypto-assets involves risk of loss.