Ethereum

Ethereum (ETH) is a decentralized, open-source platform for building applications, and ETH is the native asset that powers it. Where Bitcoin is mainly digital money, Ethereum is a programmable blockchain, effectively a shared global computer, on which developers deploy smart contracts. Ranked second overall, it anchors much of decentralized finance, NFTs and on-chain gaming.

What is Ethereum?

Ethereum lets anyone write self-executing programs called smart contracts that run exactly as coded, without banks or brokers in between. These contracts, written in languages such as Solidity, execute on the Ethereum Virtual Machine (EVM), a standard so influential that many other chains copy it for compatibility. The result is a permissionless base layer that hosts billions of dollars in DeFi protocols and hundreds of thousands of active users.

How does Ethereum work?

In September 2022 Ethereum completed 'the Merge,' switching from mining to Proof of Stake and cutting energy use by more than 99%. Validators lock up ETH as collateral to propose and confirm blocks, earning rewards for honest work and facing slashing penalties for misbehavior. Thousands of independent validators secure the network and process transactions on the EVM.

Ethereum tokenomics and supply

Ethereum, which launched in July 2015 after an $18 million crowdsale, has no hard supply cap; issuance is set by protocol rules that reward validators. The EIP-1559 upgrade added a base fee that is burned on every transaction, so during busy periods more ETH can be destroyed than created, making net supply mildly deflationary at times. Around 120.7 million ETH are currently in circulation.

• Circulating supply: roughly 120.7 million ETH
• No fixed maximum supply
• EIP-1559 burns part of each transaction fee
• All-time high near $4,946; all-time low around $0.43

What is Ethereum used for?

ETH is the fuel, or 'gas,' that pays for computation on the network, and it is staked to help secure it. Beyond that, it underpins lending markets, decentralized exchanges, stablecoins, NFT marketplaces and Layer 2 scaling networks that settle back to Ethereum. Its deep developer community makes it the default settlement layer for much of Web3.

Where to buy Ethereum

ETH is one of the most widely listed assets in crypto. Use our best crypto exchanges ranking to compare fees and liquidity, and our best crypto wallets guide to pick a wallet that supports staking and interaction with Ethereum applications.

Is Ethereum a good investment?

Ethereum offers a large ecosystem, active development and staking yield, but it competes with faster Layer 1s, faces execution risk on upgrades, and is highly volatile. Fees can spike during congestion, and prices can drop steeply. Nothing here is financial advice; research the technology and manage risk before allocating.