What Is Ethereum? How It Works and How It Differs From Bitcoin

Quick Read

• Ethereum runs smart contracts on a proof-of-stake network where over a third of circulating ETH is staked, earning low single-digit yields.

• Over five years, Bitcoin gained 58% while Ethereum lost 30%, exposing a stark performance gap despite Ethereum's expanding platform usage.

• Spot Ethereum ETFs exclude staking yield, and IRS tax uncertainty on staking rewards continues to limit institutional capital from participating.

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Ethereum (CRYPTO:ETH) is a blockchain built to run programs, which is why people point to it when they say crypto can do more than move money. Developers deploy code to it, users call that code, and the network's native token, ETH, pays for the computing power behind every transaction.

As of September 17, 2026, Ethereum trades near $2,431 while Bitcoin (CRYPTO:BTC) trades near $76,378, though both prices shift throughout the day. So what actually runs on Ethereum, and how does it differ from Bitcoin?

What Ethereum Is and What Runs On It

Bitcoin functions as a ledger for money, while Ethereum works more like a computer that anyone can run a program on. The network went live in July 2015, created by Vitalik Buterin alongside a handful of co-founders, and it was designed from the start to do more than simply record who owns what.