Library · Crypto, word by word · The basics
What is Ethereum?
Ethereum is a decentralized blockchain network that can run programs called smart contracts, powered by its native cryptocurrency, ether (ETH). Many other tokens and applications are built on it. Since 2022 it has used proof of stake instead of mining.
What it means for you
Transactions on Ethereum, including sending a token or using an app, pay their fee in ETH, so a wallet that holds tokens but no ETH cannot move them. A token built on Ethereum is not ETH, even when its name or ticker looks similar.
How it works
Ethereum keeps one shared state, the balances, code and storage of every account, which the Ethereum Virtual Machine updates and every node agrees on. Accounts are either externally owned, controlled by a private key, or contracts, controlled by their code; only key-controlled accounts can start a transaction. Each step of computation costs gas, paid in ETH. Since 2022, validators who deposit 32 ETH take turns proposing blocks, one chosen at random for each 12-second slot, while committees of other validators vote on whether each block is valid.
The founding paper
Ethereum: A Next-Generation Smart Contract and Decentralized Application Platform Whitepaper · 2014 · Vitalik Buterin
Ethereum: A Secure Decentralised Generalised Transaction Ledger Yellow paper · 2025 · Gavin Wood
Sources: ethereum.org: What is Ethereum?, ethereum.org: Intro to Ethereum, ethereum.org: Ethereum accounts, ethereum.org: Proof-of-stake · checked 4 October 2026
On Cryptominium
Related words
Educational content, not financial advice. Written by hand and checked against the source named above. Something wrong? Tell us and we reply within two business days.