What is Ethereum (ETH)?

Ethereum is a blockchain that can run programs, not only record payments. Its coin is called ether, or ETH. Many tokens and stablecoins, and most DeFi services, run on Ethereum or on networks built on it.

Where it came from

In November 2013, a programmer named Vitalik Buterin proposed a blockchain that could store and run code. Ethereum went live on 30 July 2015.

Nobody owns it. Changes are proposed in public and take effect only if the people running the software adopt them. A non-profit, the Ethereum Foundation, funds research but cannot dictate changes.

How it works

Programs on Ethereum are called smart contracts. Every node runs them the same way, so no single company can switch one off or change its result. Lesson 7 covers them.

Ethereum is secured by proof of stake. It switched from mining in September 2022, which cut its energy use by about 99.95%. Participants called validators lock up at least 32 ETH as collateral, take turns proposing blocks every 12 seconds and check each other's work. A validator that cheats loses part of its stake. Lessons 8 and 46 explain staking.

Supply

Ether has no maximum supply.

• New ETH is issued to validators.
• Part of every transaction fee is destroyed, or burned.
• The total can rise or fall depending on how busy the network is.

In October 2026 about 44 million ETH was staked, roughly 35% of the supply, and staking paid about 2.5% a year.

What people use it for

• Paying fees. Every action on Ethereum costs a fee in ETH, called gas. Lesson 32 explains it.
• Staking. Locking up ETH to help run the network and earn rewards.
• DeFi, stablecoins and NFTs. Level 3 of the course covers these.

Ethereum's main network can be slow and costly when busy. Layer 2 networks process transactions more cheaply and record their data back on Ethereum. Lesson 33 covers moving between networks.

Risks to know

• Price swings. Rewards and fees are in ETH, so their value moves with the price.
• Smart contract bugs. In 2016 an attacker drained more than 3.6 million ETH from a fund called The DAO. Running on Ethereum does not make an application safe.
• Approvals. Signing the wrong transaction can hand over your tokens. Lesson 37 covers this.
• Wrong-network mistakes. The same address works on many networks, and coins sent on the wrong one can be hard to recover.
• Concentration. Large pools and exchanges control a big share of staked ETH.

Learn more

Lesson 6 introduces Ethereum. Lessons 7 and 8 cover smart contracts and staking, and Lesson 9 explains the difference between a coin such as ETH and the tokens built on it.