Introduction
If Bitcoin is digital gold, Ethereum is a platform: a decentralized world computer on which anyone can deploy programs (smart contracts) that run exactly as written, unstoppable and uncensorable. This module explains how it concretely works: the EVM, gas, proof of stake since "the Merge", staking, and why everything is moving today toward L2 rollups.
The world computer and smart contracts
Ethereum's great innovation is smart contracts: programs deployed on the blockchain that execute automatically by their rules, with no intermediary. A smart contract can run a loan, a token swap, an NFT collection or a whole organization. Once deployed, no one can modify it or stop it from running: it's public, verifiable, permanent code.
This enabled the explosion of DeFi (decentralized finance), NFTs and stablecoins. Ethereum isn't just a currency: it's the infrastructure on which thousands of apps run.
A programmable vending machine
A smart contract is like a vending machine: insert the right coin, get exactly what's intended, no salesperson. Except here everyone can read the internal mechanism, and no one can tamper with it once installed.
The EVM and gas: paying for compute
All these programs run in the EVM (Ethereum Virtual Machine), a virtual machine shared by the whole network. Each operation has a cost, paid in "gas" (settled in ETH). The more complex a transaction or the more congested the network, the higher the gas. This is what stops anyone from saturating the network for free.
Understanding gas explains why Ethereum fees vary: they aren't fixed, they track demand for block space. At peak times a transaction can be expensive; that's one of the reasons L2 solutions exist.
- The EVM runs smart contracts identically across the whole network.
- Gas (paid in ETH) pays for compute and limits abuse.
- Fees rise with congestion: they aren't fixed.
The Merge: from proof of work to proof of stake
In 2022, Ethereum completed "the Merge": it switched from proof of work (like Bitcoin) to proof of stake. Instead of miners spending electricity, "validators" now lock up (stake) ETH as collateral. Validate honestly and they earn a reward; cheat and part of their ETH is destroyed (slashing). Result: energy use cut by about 99.9%.
Staking lets ETH holders contribute to network security and receive a reward. But it's not "free money": it carries technical risks (slashing, locked funds) and the yield varies. No promise of gain here.
ETH staking is a guaranteed, risk-free yield.
Actually : No. The yield varies with network activity, funds can be locked, and a dishonest or misconfigured validator can be slashed. It's a reward for a service rendered, with real risks attached.
Scaling: L2 rollups
Ethereum (layer 1) prioritizes security and decentralization, at the cost of limited throughput and sometimes high fees. The adopted solution is layer-2 (L2) rollups like Arbitrum, Optimism or Base: they process thousands of transactions "off-chain", then publish a compact proof on Ethereum. You get very low fees while inheriting Ethereum's security.
This is the ecosystem's main direction today: use Ethereum as the security layer, and L2s for daily use. For a beginner, the key is to know that the same asset can live on several layers, and that you must choose the right network for a transfer.
- L2s (Arbitrum, Optimism, Base…) process transactions at low cost.
- They publish a proof on Ethereum and inherit its security.
- Always check the chosen network before a transfer so you don't lose funds.
What this changes for you
Understanding Ethereum means understanding the infrastructure behind the DeFi, stablecoins and NFTs you see everywhere. Gas explains your fees, proof of stake explains staking, and L2s explain why you're told about different "networks" for the same token.
As always: you don't need to master all this to use Deblock, but these basics make you autonomous and protect you from mistakes (wrong network, unexpected fees, false yield promises).
What you should remember
- 01Ethereum is a world computer: public, immutable, uncensorable smart contracts.
- 02The EVM runs the code; gas (in ETH) pays for compute and varies with congestion.
- 03The Merge moved Ethereum to proof of stake: -99.9% energy, staking by validators.
- 04Staking isn't risk-free or guaranteed (slashing, locked funds, variable yield).
- 05L2 rollups offer low fees while inheriting Ethereum's security: always check the network.
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