Understanding Ethereum

Lesson 1 of 3

The Ethereum network and ETH's role

Ethereum is a decentralized network designed to run programs — called smart contracts — rather than just record simple currency transfers. ETH, its native token, has two main roles: it's used to pay for computation on the network (often called "gas fees") and it functions as an asset in its own right that can be held or traded. This dual role — a currency and the "fuel" that powers network activity — is a key difference from Bitcoin's simpler, single-purpose design.

• •Ethereum is a network designed to run programs (smart contracts), not just transfer currency.
• •ETH is used to pay for computation ("gas fees") on the network.
• •ETH also functions as a tradable asset in its own right.