Stablecoins
Tokens designed to track a currency such as the US dollar. They can move quickly, but their safety depends on the issuer, reserves, code and network.
Learn — Ethereum
Ethereum is a shared computer
with public state.
It lets people deploy programs that many computers execute and verify. That creates useful building blocks—and a different set of costs, dependencies and risks from an ordinary app.
Useful anchors
2015Network launch
Ethereum was designed as a general-purpose programmable blockchain
ETHNative asset
Used for fees, staking and value transfer on the network
PoSConsensus
Validators have used proof of stake since September 2022
The core idea
Smart contracts are programs, not promises
A smart contract is code stored at an address on Ethereum. When someone sends it a valid transaction, the network executes the same instructions and records the result. This can coordinate assets without one company keeping the only copy of the ledger.
The word “contract” can mislead. Code does not understand intent, fairness or mistakes; it follows its instructions. Some contracts are immutable, while others can be upgraded, paused or controlled through administrator keys and governance votes.
Before using an application, ask what lives on-chain and what still depends on a website, company, price feed, bridge, signer or small group of decision makers. Decentralisation is a spectrum, not a label.
ETH pays for computation
Ether, or ETH, is Ethereum's native asset. Every operation uses computational resources, so the sender pays a fee called gas. More complex actions usually consume more gas, and prices rise when demand for block space is high.
Validators lock ETH as collateral to help order transactions and protect the network. Honest participation can earn rewards; serious rule-breaking can lead to penalties. Holding ETH by itself does not automatically mean it is staked.
Ethereum has no Bitcoin-style fixed maximum. New ETH is issued to validators, while part of each base transaction fee is burned. Supply can therefore grow or shrink over a period; neither outcome guarantees a price direction.
What people build
Useful ideas, with real dependencies
Decentralised finance
Smart contracts can enable trading, lending and borrowing. The code may reduce some intermediaries while introducing contract, liquidation and governance risk.
Digital ownership
NFTs and tokenised assets can record a unique token holder. That does not automatically transfer copyright, legal title or rights to an off-chain object.
Why layer 2 networks exist
Ethereum's main network has limited block space. Layer 2 networks, often called rollups, process many transactions away from the main chain and publish compressed data or proofs back to it. This can make activity faster and cheaper.
A lower fee does not remove risk. Each layer 2 can have its own bridge, upgrade keys, withdrawal process and technical maturity. Check which network you are using before sending funds; the same wallet address can appear on several networks while the assets remain separate.
For UK readers
One action can create several records
Buying ETH, swapping tokens, receiving staking rewards and paying gas are different events. Their UK tax treatment depends on the transaction and your circumstances; a wallet's profit figure is not a substitute for a complete transaction history.
Save dates, quantities, GBP values, fees, transaction hashes and wallet addresses. Good records are easier to create while the context is fresh than years later when an exchange or application has changed.
Next step
Learn how staking rewards work
Start with the job being performed, then examine the risks behind the headline rate.
Read the staking guide →