Ethereum (ETH)

Ethereum (ETH), also called ether, is the native cryptocurrency of the Ethereum network. It pays the fees for every transaction and smart contract run on the network, it is the asset validators lock up to secure the chain, and it is widely held as an investment. For most of its history it has been the second-largest cryptocurrency by market value, after Bitcoin.

ETH is the coin, and this entry covers its supply, fees, uses and regulation. The software platform it runs on is described separately in Ethereum Blockchain. Many other tokens, including stablecoins such as USDC, live on Ethereum, but they are separate assets: only ETH can pay the network's fees.

If Bitcoin is like digital cash, Ethereum is closer to a shared computer that anyone in the world can use but nobody owns. People write small programs for it, called smart contracts, that run exactly as written. A program can work like a vending machine: it holds money and releases it automatically once certain conditions are met, with no company in the middle.

Using that computer costs something, the way a taxi meter charges for distance. ETH is the fare. The more work a program asks the network to do, and the busier the network is at that moment, the more ETH it costs. Instead of miners, people called validators keep the shared computer honest by locking up their own ETH as a deposit, which they can lose if they cheat.

Ethereum was proposed in late 2013 by the programmer Vitalik Buterin and funded through a public token sale in mid-2014 that raised about 31,000 bitcoins. The network launched on 30 July 2015. Development has since been carried out by many independent teams, with the non-profit Ethereum Foundation in Switzerland funding research rather than controlling the protocol. In 2016 a large investment fund built on it, The DAO, was drained through a software flaw. Most of the community changed the chain's history to return the funds, while a minority kept the original record, which continues as Ethereum Classic (ETC).

Later upgrades changed how ETH works as money. The London upgrade of August 2021 began burning part of every fee. The Merge on 15 September 2022 replaced mining with proof of stake, cutting the network's energy use by more than 99 percent. Withdrawals of staked ETH were enabled in April 2023, and the Dencun (March 2024), Pectra (May 2025) and Fusaka (December 2025) upgrades lowered costs for layer-2 networks and changed staking limits.

ETH has no fixed maximum supply. New ETH is issued to validators as a reward, while part of every fee is destroyed through burning, so the total supply can rise or fall depending on how busy the network is. Fees are measured in "gas", the unit of computing work, and priced in gwei, one billionth of an ETH. Under the fee model introduced in 2021:

• $\text{Gas used}$ is the amount of work the transaction needs; a simple ETH transfer uses 21,000 gas.
• $\text{Base fee}$ is set by the network according to demand and is burned.
• $\text{Priority fee}$ is an optional tip paid to the validator.

For example, a simple transfer at a base fee of 20 gwei and a tip of 2 gwei costs $21{,}000 \times 22 = 462{,}000$ gwei, or 0.000462 ETH. Of that, 420,000 gwei is burned and 42,000 gwei goes to the validator. See gas fee for why these prices change from minute to minute.

• Network fees. Every action on Ethereum, from sending a token to trading on a decentralized exchange, is paid for in ETH.
• Staking. Running a validator requires 32 ETH; smaller holders use staking pools or liquid staking to earn a share of the rewards.
• Collateral. ETH is a major form of collateral in decentralized finance, backing loans and crypto-backed stablecoins.
• Investment. Spot ether exchange-traded funds began trading in the United States on 23 July 2024.
• Payments. ETH can be sent directly between wallets worldwide, though for everyday payments most users prefer stablecoins, whose value does not swing with the crypto market.

Whether ETH is a security has been argued since the 2014 token sale. In the United States it is generally treated as a commodity: ether futures trade on regulated exchanges overseen by the Commodity Futures Trading Commission, and in June 2024 the Securities and Exchange Commission closed an investigation into the network without bringing charges. Businesses that hold or transfer ETH for customers must meet licensing and anti-money-laundering rules, including the FATF Travel Rule and, in the European Union, MiCA.

ETH's price is volatile, and its value depends on continued demand for the network. Critics argue that staking concentrates influence in a few large providers, that high fees during busy periods have pushed users to layer 2 networks that capture value elsewhere, and that a supply with no cap makes ETH a weaker store of value than Bitcoin. Smart-contract bugs, bridge hacks and lost private keys are further risks for holders.

• Ethereum.org
• Ethereum white paper
• Ask Mint: Why does the gas fee in crypto fluctuate while fiat fees stay fixed?