Ethereum is a public blockchain that can run programs, called smart contracts, as well as move money. This article explains who built it, how blocks and fees work, why mainnet can be expensive, and how to watch it live.
New to the topic? Start with what is a blockchain.
What Ethereum is and who built it
Ethereum was proposed in 2013 by Vitalik Buterin and launched in 2015 by a group of early contributors. It is not owned by a company. The software is open source and developed by several independent client teams, while a non-profit, the Ethereum Foundation, funds research and grants. Thousands of nodes and many validators run the network.
Bitcoin proved that a ledger could work without a bank. Ethereum asked a bigger question: what if the ledger could also run code? A smart contract is a small program stored on the chain that runs exactly as written when someone calls it. This is the basis for tokens, decentralized exchanges, lending protocols and NFTs.
Today Ethereum is the main base layer for decentralized finance and for most layer 2 networks such as Arbitrum, Base and Optimism.
How it works: proof of stake
Ethereum moved from proof of work to proof of stake in 2022. Instead of miners burning electricity, validators lock up ETH as a deposit (a stake). The protocol picks validators to propose and vote on blocks. A validator that cheats can lose part of its stake, and one that is offline earns less.
Time is divided into slots of 12 seconds. In each slot, one validator is chosen to propose a block. If that validator is offline, the slot stays empty, so a gap longer than 12 seconds can occur. 32 slots make an epoch, about 6.4 minutes.
Finality
A transaction is included once it is in a block. It is finalized after about two epochs, roughly 13 minutes, when validators holding more than two thirds of the staked ETH have voted for it. A finalized block is practically impossible to reverse without destroying a large amount of stake. Exchanges and bridges often wait for finality for large amounts. See finality and confirmations.
The EVM and smart contracts
The Ethereum Virtual Machine (EVM) is the engine that runs smart contracts. Its design became a standard. Many other chains copy it, which is why Arbitrum, Base, Optimism and Polygon are called EVM chains. A developer can write a contract once and deploy it on all of them, and wallets such as MetaMask work on all of them.
ETH, gwei and fees
ETH is the native coin. It pays for every transaction. Fees are measured in gas, a unit of computation. A simple ETH transfer uses 21,000 gas. A token swap or an NFT mint uses much more.
Prices are quoted in gwei, one billionth of an ETH. A fee is gas used times the gas price. For example, a transfer at 20 gwei costs 21,000 times 20 = 420,000 gwei, which is 0.00042 ETH.
Since EIP-1559, each block has a base fee that adjusts automatically. When a block is more than half full the base fee rises, and when it is emptier it falls. The base fee is burnt, meaning removed from supply. On top, a sender can add a priority tip that goes to the validator and moves the transaction up the queue.
Why mainnet is expensive at busy times
Block space is limited, so when demand spikes, such as a popular mint or a market crash, senders compete and the base fee climbs. After a full block the base fee rises by up to 12.5 percent, and after an empty one it falls by up to 12.5 percent. Quiet periods are far cheaper. Check the gas tracker for the current price, and read gas and fees.
Blobs and the rollup-centric roadmap
Ethereum chooses not to scale by making its own blocks huge. Instead the plan is for layer 2 rollups to run transactions off mainnet and post compressed data back to Ethereum. See layer 1, layer 2 and layer 3 and rollups.
EIP-4844 added blobs, a cheaper kind of temporary data space meant for rollups. Because blobs have their own fee market, rollups pay less to post data, and users see lower layer 2 fees. Ethereum remains the settlement layer where final state is anchored.
Addresses and tokens
Ethereum addresses start with 0x followed by 40 hexadecimal characters. The same address works on every EVM chain, because it is derived from the same key. Your address on Ethereum is also your address on Base, Arbitrum, Optimism and Polygon. Your balance on each chain is separate, though.
Tokens follow standards. ERC-20 is the standard for fungible tokens such as stablecoins. A token is not stored in your wallet. It is a record in the token contract that says your address holds a certain balance. Sending a token needs ETH for gas, even if you are sending USDC. See stablecoins.
How Ethereum compares
| Ethereum | Base | Polygon | Solana | |
|---|---|---|---|---|
| Type | Layer 1 | Layer 2 rollup | Own PoS chain | Layer 1 |
| Block time | 12 seconds | 2 seconds | Around 2 seconds | About 0.4 seconds |
| Gas token | ETH | ETH | POL | SOL |
| Typical fee | Highest | Low | Low | Very low |
Mainnet gives the strongest security and the deepest ecosystem. Other chains give lower fees. See why fees differ between chains.
What to watch out for
- Wrong network. The same 0x address exists on many chains. Funds sent on the wrong network land at your address there, and are usually recoverable, but not if the receiver is an exchange that does not support that network. Check the network name before you confirm.
- Token approvals. Many apps ask you to approve a contract to spend your tokens. Approve only what you trust, and revoke old approvals.
- Fake tokens and phishing. Anyone can create a token with any name. Verify contract addresses from an official source.
- Failed transactions still cost gas. If a contract call reverts, the fee is still charged.
- Contract bugs. Smart contracts can have flaws, and transactions cannot be undone.
Follow Ethereum live on ChainMonitor
- Live blocks: each tile is a block, drawn by how full it is, with the fees paid by its transactions.
- Recent blocks list and the header search for any block, transaction or address.
- Gas tracker: the cost of a send, a token transfer and a swap on Ethereum and the other six chains.
- RPC health for Ethereum: public endpoints ranked by latency and lag, with one-click add to wallet.
Frequently asked questions
Why is Ethereum so expensive?
Block space is limited and many people want it. When demand is high the base fee rises automatically. Layer 2 networks like Base and Arbitrum move most activity off mainnet, which is why they are much cheaper.
What is gas on Ethereum?
Gas measures the computation a transaction needs. You pay gas used times the gas price, in ETH. A basic transfer uses 21,000 gas, a swap uses more.
Is ETH the same as Ethereum?
Ethereum is the network. ETH is its native coin, used to pay fees and as the stake for validators.
How long does an Ethereum transaction take?
It is usually in a block within one or two 12-second slots. It is final after about 13 minutes.
What is the difference between Ethereum and Bitcoin?
Bitcoin is a payment ledger with limited scripting. Ethereum runs full smart contracts. They use different consensus, address formats and fee units. See the Bitcoin guide.
Can I use my Ethereum address on Base or Arbitrum?
Yes. The same address works on all EVM chains, but each chain keeps its own balance. You must move funds, for example by a bridge, between them. See bridges and their risks.