Programmable settlement
Ethereum extends the ledger idea by allowing code — smart contracts — to run on the network. Contracts execute automatically when their conditions are met, without an intermediary.
Ether (ETH) is the asset used to pay for that computation, in fees commonly called gas.
What gets built on it
Lending protocols, exchanges, stablecoins, tokens and collectibles. This ecosystem has produced both genuine engineering and enormous amounts of fraud.
Extra risks
Smart contracts can contain bugs. Code that holds funds has been exploited many times, and there is often no recourse when it happens.
Why this matters
Understanding smart-contract risk explains why 'the code is audited' is not a guarantee.
Terms used in this lesson
- Ethereum
- A programmable blockchain on which applications run as smart contracts.
- Smart contract
- Code on a blockchain that executes automatically when its conditions are met.
- Gas
- The fee paid to execute a transaction or smart contract on Ethereum.
- Stablecoin
- A crypto token designed to hold a steady value, usually against a currency such as the U.S. dollar.
- Written by
- Suggested Investments Research Team
- Content type
- Educational article
- Published
- 2026-09-13
- Last reviewed
- 2026-09-13
Sources and methodology
- Intelligent Accumulation methodology — Suggested InvestmentsPrimary source
Educational content only. This lesson is not investment, tax or legal advice and does not recommend buying or selling any specific investment. All investing involves the risk of loss.