Ethereum (ETH) is the native cryptocurrency of Ethereum, a decentralized platform renowned for its smart contract capabilities. Launched in 2015, Ethereum functions as a global, open-source platform for decentralized applications (dApps). Unlike Bitcoin, which was primarily designed as digital money, Ethereum's goal is to be a programmable blockchain, allowing developers to build a wide range of applications, from DeFi protocols and NFTs to games and other utilities.
Ether (ETH) serves multiple purposes within the Ethereum ecosystem. Firstly, it is used to pay transaction fees, known as "gas," which are necessary to execute smart contracts and perform other actions on the network. Secondly, it acts as the base currency within the Ethereum ecosystem, facilitating trading and other financial activities within dApps. Finally, ETH is used for staking, where users can lock up their Ether to help secure the network and earn rewards.
Ethereum is currently undergoing several upgrades aimed at improving its scalability, security, and sustainability. The transition to a Proof-of-Stake (PoS) consensus mechanism with the Merge in 2022 was a significant step in this direction, reducing energy consumption and laying the groundwork for further scaling solutions like sharding and layer-2 technologies such as rollups. These advancements aim to increase transaction throughput and lower gas fees, making the network more accessible and efficient for a growing number of users and applications. As of April 26, 2025, Ethereum is the second-largest cryptocurrency by market capitalization and continues to be a foundational layer for the expanding Web3 ecosystem.