What Is Ethereum (ETH)?
Ethereum is a decentralized blockchain platform created by Vitalik Buterin, launched on July 30, 2015. Unlike Bitcoin, which was designed primarily as digital money, Ethereum introduced programmable smart contracts — self-executing code that runs on the blockchain without intermediaries.
The Smart Contract Platform
Ethereum's EVM (Ethereum Virtual Machine) enables developers to build decentralized applications spanning DeFi (decentralized finance), NFTs, DAOs, gaming, and more. The ecosystem has attracted the largest developer community in crypto, with thousands of projects building on the platform and its Layer 2 networks including Arbitrum, Optimism, Base, and zkSync.
The Merge and Proof of Stake
On September 15, 2022, Ethereum completed "The Merge" — transitioning from energy-intensive Proof of Work to Proof of Stake. This reduced Ethereum's energy consumption by over 99.95% and introduced staking, where validators lock up ETH to secure the network in exchange for yield (~3.5-4.5% APY). Combined with the EIP-1559 fee burn mechanism introduced in August 2021, Ethereum's supply can become deflationary during periods of high network activity.
Gas Fees
Ethereum transactions require "gas" — a fee paid in Gwei (a fraction of ETH) that compensates validators for processing transactions. Gas prices fluctuate based on network demand. Layer 2 rollups have dramatically reduced costs for everyday transactions, often to just a few cents.
How to Buy Ethereum
Ethereum is available on all major exchanges including Coinbase, Kraken, and Binance. You can buy any amount of ETH — even a few dollars worth. After purchasing, you can hold it on the exchange, stake it for ~4% APY to earn passive yield, or transfer it to a self-custody wallet. ETH is also required for interacting with DeFi protocols and Layer 2 networks like Arbitrum and Base.
For a direct comparison of Ethereum against Bitcoin, see our BTC vs ETH live comparison page.