What is ETH?
What Is Ethereum?
Ethereum is a programmable blockchain platform that enables developers to deploy and run smart contracts—self-executing code that operates according to predefined conditions. ETH is the native asset of Ethereum, used to pay transaction fees (known as Gas) and serves as a settlement medium and incentive for network security.
Smart contracts facilitate decentralized applications (DApps), which allow users to access services like lending, trading, gaming, or governance without centralized intermediaries. When users transfer funds or interact with applications on Ethereum, they pay Gas in ETH to compensate for computational and storage resources.
Current Price, Market Cap, and Circulating Supply of Ethereum (ETH)
As of January 21, 2026, ETH is priced at approximately $2,991.14 with a circulating supply of about 120,694,539.602005 ETH. The total supply matches the circulating amount, with a market capitalization of roughly $361,014,265,185.14 and a fully diluted market cap of the same value, representing around 11.36% of the total crypto market cap. Over the past hour, ETH has risen by approximately 0.27%; in the last 24 hours, it has dropped by 4.65%; over seven days, it is down 10.19%; and over 30 days, it fell by 1.23%. The 24-hour trading volume stands at $772,939,322.58 (Source: provided data, date: 2026-01-21).
Click to view Latest ETH Price Data
The maximum supply is recorded as ∞, meaning Ethereum does not have a hard cap. Since the EIP-1559 fee burn mechanism was introduced, a portion of transaction fees are destroyed. Combined with Proof-of-Stake issuance, net supply can fluctuate between inflation and deflation over time. Market cap dominance indicates ETH's share of the total crypto market cap and helps assess its relative size and market attention.
Who Created Ethereum (ETH) and When?
Ethereum was conceptualized by Vitalik Buterin in 2013 and developed by a team of global co-founders including Gavin Wood and Joseph Lubin. According to public records and project history, Ethereum was launched on July 23, 2014, followed by mainnet release in 2015 and continuous upgrades since.
Key milestones:
- EIP-1559 went live in 2021, introducing fee burning.
- The “Merge” in 2022 transitioned consensus from Proof-of-Work to Proof-of-Stake.
- The Shanghai/Capella upgrade in 2023 enabled validator staking withdrawals.
- The Dencun upgrade in 2024 introduced “blob” data formats to significantly reduce Layer 2 data costs and improve scalability.
How Does Ethereum (ETH) Work?
Ethereum operates through the Ethereum Virtual Machine (EVM), a standardized environment for executing contracts and applications. The EVM ensures that the same smart contract yields consistent results across all nodes. Its account model records balances and contract states; transactions update these states.
Each transaction requires a Gas fee. Gas measures the computational and storage resources consumed, with fees depending on execution complexity and current network congestion. The standard unit for gas pricing is Gwei (one-billionth of an ETH).
Consensus is maintained through Proof-of-Stake (PoS). In PoS, validators stake ETH to propose and verify blocks, replacing the energy-intensive Proof-of-Work. Validators earn rewards for securing the network but are penalized for malicious behavior.
To scale throughput, Ethereum supports Layer 2 networks. These are scaling solutions built atop the main chain that batch multiple transactions off-chain or on sidechains before posting data back to Ethereum for security inheritance. The Dencun upgrade's “blob” feature reduces Layer 2 data publishing costs, enhancing usability and lowering fees.
What Can You Do with Ethereum (ETH)?
- Payments & Settlement: Use ETH for transfers or as collateral/settlement asset within applications.
- DeFi: Decentralized finance protocols offer lending, derivatives, yield management, and more—users interact directly with protocols via smart contracts, eliminating traditional intermediaries.
- Trading & Swaps: Decentralized exchanges (DEXs) allow users to swap tokens self-custodially on-chain; prices are set by liquidity pools and algorithms.
- NFTs & Content Rights: Non-fungible tokens (NFTs) represent unique ownership of digital assets like art, membership passes, or game items.
- Organizational Governance: Decentralized Autonomous Organizations (DAOs) coordinate funding and decisions via token-based voting for transparency and participation.
For example, users can deposit stablecoins (tokens pegged to fiat value) into a lending protocol, mint or buy NFTs, swap tokens on a DEX using ETH as liquidity, all while paying gas fees in ETH throughout these processes.
Main Risks and Regulatory Considerations of Ethereum (ETH)
Market Volatility: Crypto asset prices are highly volatile; leveraging positions or chasing market swings can amplify losses.
Click to view ETH Fear & Greed Index
Technical & Contract Risk: Smart contracts may contain vulnerabilities or be subject to attacks; complex elements like cross-chain bridges introduce additional risk surfaces. Before interacting with new protocols, review audits, start with small test amounts, and set limits.
Fees & Congestion: Gas costs spike during periods of high activity; transaction confirmations may be delayed or experience slippage. Consider transacting during off-peak hours or using Layer 2 networks to optimize costs.
Custody & Key Management Risk: Exchange accounts are subject to platform risk controls and withdrawal rules; self-custody requires careful management of private keys and recovery phrases—loss may mean assets cannot be retrieved. Enable two-factor authentication, whitelist withdrawal addresses, and diversify storage.
Regulatory Uncertainty: Jurisdictions differ in their approach to token classification and tax treatment; some activities may require compliance licensing. Always understand and adhere to local regulations before operating or filing taxes.
How to Buy and Securely Store Ethereum (ETH) on Gate
Step One: Register an account and complete identity verification. Activate two-factor authentication (2FA), set a strong password and anti-phishing code to enhance account security.
Step Two: Deposit funds or buy crypto with fiat. You can transfer stablecoins like USDT or use fiat channels to purchase ETH directly on the platform—pay attention to fees and settlement methods.
Step Three: Place an order to buy ETH. In the spot trading section, select an ETH/USDT pair; choose either market order (for instant execution) or limit order (custom price). Once filled, confirm your position on the assets page.
Step Four: Withdraw to a self-custody wallet (optional). If you prefer self-custody, create a wallet and securely back up your recovery phrase. When withdrawing, select Ethereum mainnet, double-check the recipient address and withdrawal fee; start with a small test before transferring larger amounts.
Step Five: Secure storage & risk management. For long-term holding, consider separating hot/cold storage or using hardware wallets; enable withdrawal whitelists and address books; remain vigilant against suspicious links or airdrops; regularly review permissions and revoke unnecessary contract approvals.
How Does Ethereum (ETH) Differ from Bitcoin?
Purpose & Vision: Bitcoin focuses on scarcity and value preservation—often called "digital gold." Ethereum aims to be a decentralized general-purpose computing platform with strong programmability and an expansive application ecosystem.
Supply Mechanism: Bitcoin has a hard cap of 21 million coins; Ethereum has no fixed upper limit. EIP-1559 burns part of transaction fees so net inflation or deflation varies by period.
Consensus Mechanism: Bitcoin uses Proof-of-Work (PoW), securing the network through computational power; Ethereum uses Proof-of-Stake (PoS), relying on staking and penalty incentives.
Programmability & Ecosystem: Ethereum is Turing-complete and supports robust smart contracts powering DeFi, NFTs, and DAOs. Bitcoin’s scripting language is simpler—its ecosystem is primarily focused on value storage and payments but does explore extensions and Layer 2 solutions.
Scaling Pathways: Ethereum prioritizes Layer 2 rollups and upgrades like Dencun to lower data costs; Bitcoin also explores Layer 2s and protocol extensions but with different emphases. Both platforms make distinct trade-offs between security and decentralization.
Summary of Ethereum (ETH)
Ethereum excels in programmability and ecosystem scale—ETH plays multiple roles as gas currency, settlement asset, and security incentive. With PoS consensus and EIP-1559 fee burning, its supply remains dynamically balanced over time. Layer 2 scaling and fee optimizations drive broader adoption. However, market volatility, smart contract risks, fee spikes, and regulatory uncertainties deserve careful attention. If you plan to buy ETH on Gate, secure your account first, clarify your investment purpose and holding period, split orders into smaller batches for risk control; long-term holders should combine self-custody with security tools. Stay updated on network upgrades, Layer 2 adoption rates, and fee trends to better assess user experience and potential value.
FAQ
What Are the Differences Between ETH and BTC?
ETH and BTC serve different purposes in crypto. BTC is considered digital gold—a store of value—while ETH is a smart contract platform enabling developers to build applications. BTC’s total supply is fixed at 21 million coins; ETH has no supply cap. Mining difficulty and mechanisms also differ.
How Can Beginners Buy Their First ETH?
Buying ETH is straightforward: Register a Gate account → complete identity verification → link payment method (bank card/Alipay) → search for ETH on the trading page → choose quantity to buy. Beginners are advised to start with small amounts to get familiar with the process before increasing investment.
What’s the Difference Between an ETH Wallet and an Exchange Account?
Exchange accounts (such as Gate) are used for trading where assets are held by the platform; self-custody wallets (like MetaMask) give you sole control via private keys. For long-term holding, transferring assets into a self-custody wallet ensures security—but you must safely back up your private keys.
Why Is ETH’s Price So Volatile?
ETH’s price is influenced by market supply-demand dynamics, regulatory news, technical upgrades, among other factors. As a relatively new asset class with rapidly changing participant sentiment, prices can swing sharply. Investors should be fully aware of this volatility risk when planning positions.
What Can Ordinary People Do With ETH?
The main uses for ETH include: trading for profit on exchanges; earning interest through DeFi lending; participating in NFT trades; paying gas fees for blockchain operations. For most people, trading/investing or engaging in platform activities like those offered by Gate are the most common uses.
Glossary of Key Ethereum (ETH) Terms
- Smart Contract: Self-executing code running on Ethereum—enabling transactions without intermediaries.
- Gas: The computational fee required for Ethereum transactions and smart contract execution—paid in ETH.
- EVM (Ethereum Virtual Machine): The core execution environment responsible for running smart contract code.
- Staking: The process of locking ETH to participate in network validation in exchange for rewards.
- DeFi (Decentralized Finance): A financial application ecosystem built on Ethereum—including lending, trading, derivatives.
- Layer 2 Solutions: Scaling solutions built atop Ethereum that increase transaction speed while reducing fees.
Recommended Reading & Resources on Ethereum (ETH)
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Official Website / Whitepaper:
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Development / Documentation:
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Authoritative Media / Research:
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