What is Ethereum?

Ethereum is a programmable blockchain that introduced smart contracts — self-executing code deployed on-chain and accessible to anyone — enabling decentralized applications (dApps), DeFi protocols, and NFT standards without relying on a central operator. Unlike Bitcoin, Ethereum transitioned from proof-of-work to proof-of-stake consensus in September 2022 ('The Merge'), eliminating the energy-intensive mining process. Its native asset, Ether (ETH), is used to pay for computation on the network and is partially burned with each transaction under the EIP-1559 fee mechanism.

Ethereum's execution model runs on the Ethereum Virtual Machine (EVM), a sandboxed runtime that executes bytecode compiled from high-level languages like Solidity. The EVM standard has been replicated by dozens of chains — Polygon, Avalanche's C-Chain, BNB Chain — making Ethereum the de facto base layer for the broader smart-contract ecosystem. Finality under the current proof-of-stake system takes roughly 12–15 minutes (two checkpoint epochs), though transactions appear confirmed within seconds in practice. Gas fees, denominated in Gwei (billionths of ETH), fluctuate with network demand and can spike sharply during high-activity periods, which is why Ethereum's roadmap prioritizes layer-2 rollups (Optimism, Arbitrum, ZK-based chains) to scale throughput.

The main technical criticism of Ethereum is complexity risk: the codebase and consensus rules are substantially more intricate than Bitcoin's, creating a larger attack surface. Smart contract bugs — from the 2016 DAO hack to more recent bridge exploits — have drained billions in user funds. Ethereum's roadmap (the 'Surge', 'Scourge', 'Verge', 'Purge', 'Splurge') involves years of additional protocol changes, meaning execution risk is non-trivial. The shift to proof-of-stake also introduced a new concern: validator concentration, with a handful of liquid staking protocols controlling a large share of staked ETH.

Reviewed by the 2Bitcoins Editorial Team · Updated June 2026. Not financial advice.