Ethereum (ETH) is the second-largest cryptocurrency after Bitcoin and, at the same time, a platform for applications. Launched in 2015, it added smart contracts to the blockchain idea — programs that execute automatically under set conditions. That’s why Ethereum is often called the “world computer”: thousands of applications, tokens, and entire fields like DeFi and NFTs run on it. ETH is the network’s native currency, used to pay for all operations.
What is Ethereum in simple terms
If Bitcoin is primarily digital money, Ethereum is a platform on which you can build programs without intermediaries. Developers create applications on it, and users interact with them directly through a wallet.
Put simply: Ethereum is not just a coin but an “operating systеm” for crypto applications. And ETH is the fuel that powers this systеm.
How Ethereum works: smart contracts and gas
A smart contract is code that executes the terms of a deal by itself — for example, “transfer funds when such-and-such condition is met.” No bank or intermediary is needed for this.
Every operation on the network requires computation, and a fee called gas is paid for it. The gas amount depends on network congestion: at peak times, transfers and actions become more expensive. In 2022, Ethereum switched from mining to a Proof-of-Stake mechanism — the network is now secured not by miners but by validators who “lock up” their ETH (staking), which made it far more energy-efficient.
ERC20: why it matters for USDT and other tokens
Tokens are issued on Ethereum under the ERC20 standard. USDT and USDC on the Ethereum network, for example, work this way, along with thousands of other tokens. That’s exactly why a transfer of USDT may offer an “ERC20 network” option — it means the token travels over Ethereum and the fee is paid in ETH. More on choosing a network in the guide “USDT (Tether): what it is and how it works”.
Why Ethereum has value
- The #1 platform for applications. Most DeFi services, NFTs, and tokens run on Ethereum.
- Demand for ETH. Fees for all operations are paid in ETH — creating constant demand for the coin.
- Staking. After the move to Proof-of-Stake, holders can help secure the network and earn rewards.
- Liquidity. ETH trades on all major exchanges and is accepted by exchangers.
About networks and fees
ETH is sent over the Ethereum network. The fee (gas) can be high when the network is busy — worth keeping in mind for smaller transfers. To reduce costs, there are Layer-2 networks such as Arbitrum and Optimism that run on top of Ethereum and make operations cheaper. When exchanging, always confirm which network a transfer uses.
Risks worth knowing
- Volatility. The ETH price can swing sharply — it is not a stablecoin.
- High gas. During network congestion, fees rise and small transfers become uneconomical.
- Responsibility for keys. Losing your seed phrase means irreversibly losing access to funds.
- “Dirty” coins. ETH may have passed through risky addresses, so an AML check is performed before an exchange.
How to store Ethereum safely
ETH and ERC20 tokens are stored in crypto wallets — “hot” ones (such as apps and extensions) for everyday use and “cold” ones (hardware devices) for large amounts. The main rule: never share your seed phrase and never enter it on suspicious sites. About common scams, see “Cryptocurrency fraud”.
Where to buy or sell Ethereum for cash
Ethereum can be bought or sold on exchanges, via P2P, at online exchangers, and at offline exchangers with cash payout. The last option is convenient when you need physical cash in hand or want to deposit cash and receive ETH without relying on bank cards.
HASchange exchanges Ethereum for cash rubles, dollars, and euros at offices in Moscow, Saint Petersburg, Yekaterinburg, and other cities. The final rate is set at the moment of the deal at the current market rate, and an AML check is performed beforehand. Minimum amount — from 200,000 RUB or equivalent.
Before an exchange, the cryptocurrency is screened — more on the AML policy. For the leading cryptocurrency, see the guide “Bitcoin (BTC): what it is and how it works”.
Frequently asked questions
How is Ethereum different from Bitcoin?
Bitcoin is primarily digital money and a store of value, while Ethereum is a platform for smart contracts and applications. ETH is used as fuel for operations on the network.
What is gas?
It’s the fee for executing operations on the Ethereum network. Its size depends on network congestion and is paid in ETH.
Why is USDT sometimes “on the ERC20 network”?
Because USDT can be issued as an ERC20 token on Ethereum. When transferring such USDT, the fee is paid in ETH.
Is Ethereum still mined?
No. In 2022 the network moved to Proof-of-Stake, and instead of miners it is now secured by validators through staking.
Can I exchange Ethereum for cash rubles?
Yes. At HASchange offices you can sell ETH for cash rubles, dollars, or euros, or buy ETH for cash.
Why is the ETH transfer fee sometimes high?
During periods of high network load, gas becomes more expensive. To save, people use Layer-2 networks or other token networks.
This material is for informational purposes only and is not investment advice.
Материал носит информационный характер и не является инвестиционной рекомендацией.
