Learn Ethereum Basics

New to Ethereum? Start here. This guide breaks down what Ethereum is, how it works, and why it matters—in plain English.

What is Ethereum?

Ethereum is a global, decentralized computer network that anyone can use to send money, store data, or run applications—without needing permission from a bank, company, or government.

Think of it like the internet, but for value and ownership. Just like you can send an email to anyone in the world without asking permission, Ethereum lets you send value (money, digital assets, contracts) to anyone, anywhere, instantly.

Unlike traditional systems controlled by single companies, Ethereum is maintained by thousands of independent computers worldwide, making it extremely difficult to shut down, censor, or manipulate.

How Does Ethereum Work?

Ethereum runs on a technology called blockchain—a digital ledger that records every transaction ever made. This ledger is stored on thousands of computers (called nodes) around the world.

When you make a transaction, it gets bundled with others into a "block" (think of it like a page in a book). Every ~12 seconds, a new block gets added to the chain, creating a permanent, unchangeable record.

ETH is Ethereum's native currency. You need small amounts of ETH to pay for transactions (called "gas fees")—think of it like buying a stamp to send mail.

Smart contracts are programs that automatically execute when conditions are met. For example: "If Person A sends money, automatically deliver the digital ticket to them." No middleman needed.

What Can You Do With Ethereum?

Send and Receive Money: Transfer value globally in seconds, without banks. Particularly useful for international payments or sending money to people without bank accounts.

Own Digital Assets: Buy, sell, and truly own digital items like art, music, event tickets, or in-game items through NFTs (non-fungible tokens).

Use Decentralized Finance (DeFi): Borrow, lend, save, or trade without traditional banks—just peer-to-peer applications.

Create Your Identity: Use Ethereum Name Service (ENS) to create a human-readable address like "yourname.eth" instead of a long string of numbers and letters.

Build Applications: Developers use Ethereum to create apps that can't be censored or shut down by any single authority.

Key Terms to Know

ETH: Ethereum's native cryptocurrency. Used to pay for transactions and power applications.

Wallet: A digital tool (app or device) that stores your ETH and lets you interact with Ethereum. You control it with a private key.

Gas: The fee you pay to make a transaction. Measured in Gwei. Fees go to validators who secure the network.

Smart Contract: Self-executing code that runs on Ethereum. Powers apps and enforces agreements automatically.

Block: A bundle of transactions added to Ethereum every ~12 seconds.

DeFi (Decentralized Finance): Financial services (lending, borrowing, trading) built on Ethereum without traditional banks.

NFT (Non-Fungible Token): A unique digital item you can own and prove ownership of on Ethereum.

Layer 2 (L2): Faster, cheaper versions of Ethereum built on top of the main network. Examples: Arbitrum, Base, Optimism.

Why Ethereum Matters

It's Open: Anyone with an internet connection can use Ethereum. No approvals needed, no discrimination, no borders.

It's Secure: Protected by billions of dollars in staked ETH and validated by thousands of independent computers worldwide.

It's Programmable: Unlike Bitcoin (which mainly does one thing: transfer value), Ethereum lets developers build complex applications—from games to global financial systems.

It's Proven: Running continuously since 2015, Ethereum has processed over 2.5 billion transactions and secured hundreds of billions of dollars. Major institutions like BlackRock, Visa, and Sony are building on it.

Ready to Get Started?

Take your first steps into Ethereum with our beginner-friendly guide.

Get Started →