What is Ethereum? How It Works & Where to Use It

How it works

A world computer, explained simply.

Ethereum keeps one shared record that thousands of independent computers agree on, and lets anyone deploy programs that run on it exactly as written. Here are the four ideas that make that possible.

The shared ledger

Every balance and transaction lives in one public database copied across thousands of nodes worldwide. No company owns it; anyone can verify it.

Smart contracts

Programs that hold funds and run automatically when conditions are met, no middleman, no “trust me.” They power swaps, loans, stablecoins and NFTs.

Gas & fees

Every action costs a small fee in ETH, “gas”, that pays validators and stops spam. Busier network, higher gas; L2s make it cents.

Proof of Stake

Validators lock up ETH to take turns checking blocks. Honest work earns yield; cheating burns the stake, security backed by money at risk.

How Proof of Stake secures the chain

1

Stake

A validator locks 32 ETH as a bond. That deposit is collateral, it can be partly destroyed (“slashed”) for dishonest behavior.

2

Propose & attest

Every 12 seconds one validator is chosen to propose the next block; a committee of others checks and votes (“attests”) that it's valid.

3

Reward or slash

Honest validators earn ~3% yearly yield. Attempts to cheat or double-sign cost part of the stake, making attacks expensive and irrational.

The two layers under the hood

Execution

The EVM, Ethereum Virtual Machine

Runs the smart-contract code and updates balances. The same bytecode runs on every EVM chain and L2.

Consensus

The Beacon Chain, Proof of Stake

Coordinates 1M+ validators to agree on the order of blocks and finalise them roughly every 13 minutes.

Layer 2

Rollups, Arbitrum, Optimism, Base

Process transactions off-chain, then post compressed proofs back to Ethereum, inheriting its security at 10, 50× lower cost.

What you can build

ERC-20, fungible tokens & stablecoins
ERC-721, unique NFTs
ERC-1155, multi-token collections
Written in Solidity or Vyper

Because these standards are shared, a token created today works in every wallet, exchange and app, including Zypto, on day one.

Adoption & usage

The most-used smart-contract chain.

Live, on-chain numbers that show how much real activity Ethereum settles, usage, security and reliability, not price.

View on Etherscan

Network activity

Total transactions2.61BAll-time

Daily transactions1.18MLast 24h

Block height21,940,118~12s per block

Avg gas fee$0.925.1 gwei · base layer

Daily transactions · last 12 months+6.4%

Steady growth. Base-layer demand has held above one million transactions a day, with most consumer activity now flowing through L2 rollups.

Daily active addresses462K

Unique addresses transacting each day, 7-day average, a proxy for real users and apps.

Security · Proof of Stake

Validators1,068,400Active set

Total staked35.2M ETH

29.1% of supply

Staking yield~3.1%Annual · net estimate

Cost to attack$40B+⅓ of staked ETH

Reliability

100% block-production uptime since the Merge (Sept 2022)

Ethereum has produced blocks continuously since switching to Proof of Stake. Multiple independent client implementations keep any single software bug from halting the chain, a property called client diversity.

May 2023A short finality delay (≈25 min) from a consensus-client edge case. Blocks kept being produced; finality resumed without intervention and no funds were affected.

Ecosystem

What people actually build on it.

Ethereum holds the deepest liquidity in crypto and the widest range of applications. Here's the landscape, and where most of the value sits.

DefiLlama

DeFi

Lending, borrowing, trading and yield, Aave, Uniswap, Sky. $61B in total value locked.

NFTs & digital goods

Art, memberships, gaming items and identity, the standards that started here power most of the market.

Stablecoins

Most USD-backed stablecoins live here, ~$98B on-chain. The backbone of crypto payments and savings.

Layer 2s

Dozens of rollups scale Ethereum cheaply while settling back to it. Arbitrum, Optimism, Base lead.

Top protocols by value locked

1LLidoLiquid staking$22.8B

2EEigenLayerRestaking$11.2B

3AAaveLending$9.4B

4SSky (Maker)CDP · stablecoin$6.1B

5UUniswapDEX$5.3B

The Ethereum L2 family

Most everyday activity now runs on Layer 2 rollups that settle to Ethereum and use ETH for gas. Explore Arbitrum, Optimism and Base.

Ecosystem at a glance

Total value locked$61.4B#1 of all chains

Stablecoin supply$98BOn-chain

In the Zypto App

Hold, swap and spend Ethereum assets.

Ethereum is fully integrated. Self-custody ETH and thousands of ERC-20s, swap cross-chain with no separate bridge, and spend a subset through Zypto Pay.

Available in the Zypto App · 5,000+ ERC-20s · top holdings shown

EthereumETH$4,218+1.0%

TetherUSDT$1.00+0.0%

USD CoinUSDC$1.00+0.0%

ChainlinkLINK$24.18+2.1%

UniswapUNI$13.07+1.4%

AaveAAVE$312.40−0.7%

Wrapped BTCWBTC$104,190+2.3%

PepePEPE$0.0000182+5.1%

Live prices link to full price pages. Any ERC-20 in the Zypto App is held in self-custody, your keys, your coins.

Get these in Zypto App

Be the reason Ethereum ships next.

Ethereum isn't in the Zypto App yet. Post the request to your followers and ask them to add their voice, we prioritize the chains with the most demand. Everything above stays fully live either way.

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Pay bills, top-ups and 24,000+ products with these assets through Zypto Pay. Request any app-available asset to be added as payment.

Swap & cross-chain

CChangeNow LLetsExchange SSwapKit ZIn-app DEX

Chainlink CCIP supported Send tokens cross-chain to any CCIP network in one transaction, Ethereum, BNB Chain, Arbitrum, Optimism, Avalanche, Polygon and Base.

Zypto routes the best swap path automatically across these providers and the in-app DEX, including cross-chain moves with no separate bridge.

History & FAQ

Ten years, plainly told.

Key milestones

2013

The whitepaper

Vitalik Buterin proposes a blockchain that runs arbitrary programs, not just payments.

2015

Mainnet launch (“Frontier”)

Ethereum goes live on 30 July 2015 as a Proof of Work chain.

2021

EIP-1559, fee burn

The London upgrade reworks fees and starts burning a portion of every gas payment.

2022

The Merge, Proof of Stake

Ethereum switches from mining to staking, cutting energy use by ~99.9%.

2024

Dencun, cheaper L2s

“Blob” storage slashes Layer 2 fees, accelerating the rollup ecosystem.

Key facts

Launched30 Jul 2015

ConsensusProof of Stake

LayerLayer 1 · EVM

Block time12 seconds

Native tokenETH

Token standardsERC-20 / 721 / 1155

Finality~13 min (2 epochs)

CCIPSupported

Smart contractsDeFiLayer 1EVMStaking

What is Ethereum in one sentence?

Ethereum is a public, programmable blockchain, a shared global computer where anyone can run apps (smart contracts) that handle money and data without a central operator.

How is Ethereum different from Bitcoin?

Bitcoin is mainly digital money secured by Proof of Work mining. Ethereum is a general-purpose platform secured by Proof of Stake, designed to run programs, so it hosts stablecoins, DeFi, NFTs and thousands of other tokens.

Why does Ethereum charge gas fees?

Every transaction uses computing power across the network. Gas is a small fee in ETH that compensates validators and prevents spam. When the base layer is busy, fees rise, which is why most everyday activity moves to cheaper Layer 2 rollups.

Is Ethereum decentralized and secure?

Over a million validators run by independent operators secure the chain, with several competing software clients so no single bug can halt it. Attacking it would require staking and risking tens of billions of dollars in ETH.

Is Ethereum available in the Zypto App?

Yes. You can hold, swap and self-custody ETH and thousands of ERC-20 tokens in the Zypto App, and spend a subset (ETH, USDT, USDC) through Zypto Pay. For live prices and charts, see the ETH price page.

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