In a nutshell: What is Ethereum? It’s a global, open blockchain that runs apps and smart contracts, and ETH is the coin used to pay for everything on it. Since 2022 it has been secured by staking instead of mining. Recent upgrades (Dencun in 2024, Pectra and Fusaka in 2025) have focused on making transactions cheaper, especially on layer 2 networks, with the next upgrade, Glamsterdam, targeted for late 2026.
Last updated: September 28, 2026. Upgrade dates and statuses are as of this update.
What is Ethereum, and why does it matter? Bitcoin is often described as digital gold. Ethereum is different: it’s more like a shared global computer that anyone can build on. If you’ve wondered what Ethereum actually does, how staking and gas fees work, or what all those upgrade names mean, this beginner’s guide covers the essentials in plain English.
Table of contents
What Is Ethereum?
Ethereum is a decentralized blockchain network launched in 2015. Like Bitcoin, it keeps a public record of transactions that no single company controls. Unlike Bitcoin, it was designed to run programs, not just track payments.
Those programs are called smart contracts. They are pieces of code that run exactly as written once deployed, without a middleman. Developers use them to build apps for lending, trading, games, digital collectibles and more. Thousands of computers around the world run Ethereum software and agree on the results.
So when people ask “what is Ethereum?”, the short answer is: a platform for building apps that run on a blockchain instead of on a company’s servers.
What Is Ethereum vs ETH? The Difference
- Ethereum is the network.
- Ether (ETH) is its native cryptocurrency.
You need ETH to pay transaction fees on Ethereum, and ETH is what validators stake to secure the network. People also buy ETH as an investment. In the US, you can get exposure through spot Ether ETFs, which began trading on July 23, 2024. They work much like the funds described in our Bitcoin ETF guide.
What Is Ethereum Used For?
- Stablecoins: Many dollar-pegged tokens are issued on Ethereum and move between users around the clock.
- DeFi (decentralized finance): Lend, borrow or swap tokens through smart contracts instead of banks.
- NFTs: Unique digital items such as art, collectibles or tickets.
- Tokenization: Traditional assets, such as fund shares, represented as tokens on a blockchain.
- Layer 2 networks: Faster, cheaper networks that settle back to Ethereum (more below).
How Ethereum Staking Works
On September 15, 2022, Ethereum completed “The Merge,” switching from energy-intensive mining (proof of work) to proof of stake. The Ethereum Foundation says this cut the network’s energy use by about 99.95%.
Under proof of stake, validators lock up ETH as collateral. They propose and confirm new blocks and earn rewards in ETH for doing the job honestly. If they break the rules, part of their stake can be destroyed, a penalty called slashing.
Ways to stake ETH
- Solo staking: Run your own validator with at least 32 ETH. The most independent option, but also the most technical.
- Staking pools and liquid staking: Pool smaller amounts with others and often receive a token representing your staked ETH.
- Exchange staking: Let a centralized exchange stake for you. Easy, but you trust the exchange with your coins.
- Staking ETFs: In the US, some Ether ETFs now stake part of their holdings. For example, BlackRock launched its iShares Staked Ethereum Trust ETF (ETHB) in March 2026.
Staking rewards vary over time and are not guaranteed. In the US, they are generally taxed as income when you gain control of them. See our crypto taxes guide for details.
What Is Ethereum Gas? Fees Explained
Every action on Ethereum, from sending ETH to using an app, requires computing work. That work is measured in gas, and you pay for it in ETH.
- Base fee: Set automatically by the network depending on demand. This part is burned (permanently removed from supply), a rule introduced in 2021.
- Priority fee (tip): An optional extra paid to validators to get your transaction included faster.
- Gas limit: The maximum amount of gas your transaction is allowed to use.
Fees rise when the network is busy and fall when it’s quiet. Complex actions, like a DeFi trade, cost more gas than a simple transfer. Your wallet usually estimates the fee before you confirm.
Layer 2 Networks: Ethereum’s Scaling Plan
A big part of what Ethereum is today comes down to layer 2s. Ethereum’s main chain (layer 1) prioritizes security and decentralization, which limits how many transactions it can process. Layer 2 networks, often called rollups, process transactions off the main chain and post compressed data back to Ethereum. That makes them much cheaper and faster while still relying on Ethereum for security.
Several recent upgrades were designed specifically to make layer 2s cheaper, which is why fees on many rollups are now a small fraction of main-chain fees.
What Is Ethereum Upgrading? Recent Changes (2024–2026)
Ethereum improves through scheduled network upgrades, or “hard forks,” that every node updates to at once. Here are the most recent ones.
| Upgrade | Date | What it did |
|---|---|---|
| Dencun | March 13, 2024 | Introduced “blobs” (EIP-4844), a cheaper way for layer 2s to post data, sharply reducing rollup fees |
| Pectra | May 7, 2025 | Raised the maximum validator balance from 32 to 2,048 ETH, let regular wallets gain smart-account features (EIP-7702) and doubled blob capacity |
| Fusaka | December 3, 2025 | Added PeerDAS, which lets nodes verify data by sampling instead of downloading it all, making room for many more blobs |
| Glamsterdam | Targeted for Q4 2026 (not yet scheduled) | Plans enshrined proposer-builder separation (ePBS) and block-level access lists to prepare for parallel processing and higher capacity |
Dencun (2024)
Dencun’s headline feature, proto-danksharding, gave rollups a dedicated, temporary data space. It was the biggest single step toward cheap layer 2 transactions.
Pectra (2025)
Pectra was aimed at both stakers and everyday users. Large stakers can now consolidate validators, and EIP-7702 allows ordinary wallets to use features like batched transactions or having someone else sponsor their gas fees.
Fusaka (2025)
According to the Ethereum Foundation, Fusaka activated on mainnet on December 3, 2025. It was followed by two “blob parameter only” forks, in December 2025 and January 2026, that raised blob capacity step by step.
Glamsterdam (next)
As of September 28, 2026, ethereum.org lists Glamsterdam as expected on mainnet in Q4 2026, with no confirmed date. Its next milestone is a Sepolia testnet fork scheduled for October 6, 2026. Timelines can slip, so treat any date as tentative.
Scam warning: Upgrades never require you to “convert” or “upgrade” your ETH. Anyone asking you to do so is trying to steal your funds.
How to Buy ETH Safely
Once you understand what Ethereum is, buying ETH is fairly simple. Doing it safely takes a little more care:
- Choose a reputable, regulated platform available in your country, or buy a spot Ether ETF through a brokerage if you only want price exposure.
- Start small and send a test transaction before moving larger amounts.
- Check the network. ETH can live on Ethereum mainnet or on layer 2 networks. Sending to the wrong network is a common and costly mistake.
- Consider self-custody for long-term holdings, using a hardware wallet. Write down your recovery phrase offline and never share it.
- Keep records of every purchase, sale and reward for taxes.
Risks to Know Before Buying ETH
- Volatility: ETH’s price can swing sharply. It traded around $2,650–$2,700 in late September 2026, well below its record highs.
- Smart contract risk: Bugs or hacks in apps can cause losses.
- Competition: Other blockchains, such as Solana, compete for users and developers. See our Solana vs Ethereum comparison.
- Staking risks: Slashing, withdrawal delays and third-party risk if you stake through a provider.
- Regulation: Rules for crypto continue to evolve across countries.
Want a broader market view? Check our weekly crypto market this week recap, or learn how bitcoin’s supply works in our bitcoin halving guide.
Frequently Asked Questions
What is Ethereum used for?
Ethereum runs smart contracts and decentralized apps, including stablecoins, DeFi, NFTs and tokenized assets. ETH pays for transactions on the network.
What is Ethereum’s difference from Bitcoin?
No. Both are blockchains, but Bitcoin focuses mainly on being scarce digital money, while Ethereum is a programmable platform for apps. They also use different rules for supply and security.
What is Ethereum staking, and how much ETH do I need?
Staking means locking up ETH to help secure the network in exchange for rewards. You need 32 ETH to run your own validator. With pools, exchanges or staking ETFs, you can participate with much smaller amounts, though each option has its own fees and risks.
Why are Ethereum gas fees sometimes high?
Fees rise when many people want to use the network at once. Using a layer 2 network is often a cheaper option for everyday transactions.
Is there a limit to how much ETH exists?
Unlike bitcoin, ETH has no fixed maximum supply. New ETH is issued to validators, while part of every transaction fee is burned, so total supply can rise or fall depending on network activity.
Sources
- ethereum.org: What is Ethereum?
- ethereum.org: Prague-Electra (Pectra)
- ethereum.org: Glamsterdam (accessed Sept. 28, 2026)
- Ethereum Foundation Blog: Fusaka mainnet announcement (Nov. 6, 2025)
- ethereum.org: The Merge
- ethereum.org: Gas and fees
- BlackRock: iShares Staked Ethereum Trust ETF press release (March 12, 2026)
Disclaimer: This article is for educational purposes only and is not financial or investment advice. Crypto assets are highly volatile and you can lose money. Do your own research and consider speaking with a licensed financial professional before investing.
