How Ethereum REALLY Works in 2026

0:00- What Is Ethereum? Full 2026 Beginner’s Guide2:25- How Ethereum Became A Layered Crypto Ecosystem4:50- Ethereum Gas Fees Explained Simply7:15- Why Ethereum Still Leads Smart Contract Blockchains9:40- Ethereum Scalability Problem And Rollups Explained12:05- Ethereum Layer 2s: Optimistic Rollups vs ZK Rollups14:30- Ethereum Upgrades: The Merge, Pectra And Better UX16:55- Fusaka Upgrade And Ethereum’s Scaling Breakthrough19:20- Ethereum Bull Case: DeFi, Stablecoins And RWAs21:45- Ethereum Risks: Layer 2 Centralization And Competition

Ethereum was created by Vitalik Buterin as one of eight co-founders, founded in 2013, and launched in 2015. Its purpose was to enable a global decentralized computer for decentralized applications that are not possible on Bitcoin. It began as a proof-of-work blockchain with miners earning ETH, then transitioned to proof-of-stake in 2022. Validators secure the network by staking ETH, earning yield and transaction fees. ETH also pays gas fees, runs smart contract functions, and transfers value between users, while a portion of ETH is burned each transaction, reducing supply over time. Scalability limits on the main chain led to layer 2 networks built on top of Ethereum to improve speed and cost as usage grows.

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