What is Ethereum?

What Is Ethereum?

Ethereum is a general-purpose blockchain platform that enables developers to deploy smart contracts—self-executing code that defines and enforces rules automatically. Users interact with decentralized applications (DApps) on Ethereum by initiating transactions from their wallets. ETH is the native asset of the network, used for paying transaction fees (Gas) and staking to help secure the protocol.

Smart contracts are on-chain programs that execute when predefined conditions are met. Decentralized applications (DApps) provide user-facing functionality built atop these contracts. Wallets are tools for managing private keys and signing transactions; the private key functions as your “asset password” and must be securely stored.

What Are the Current Price, Market Cap, and Circulating Supply of Ethereum (ETH)?

As of January 14, 2026, public data sources such as CoinMarketCap and CoinGecko consistently rank Ethereum among the top crypto assets, with high trading activity and a leading global market capitalization. ETH price fluctuates based on market sentiment, macro liquidity, and on-chain activity—short-term swings can be volatile, while long-term value is shaped by ecosystem growth and network upgrades.

Ethereum’s supply has no fixed cap. Since EIP-1559 introduced base fee burning, a portion of transaction fees are permanently destroyed; meanwhile, staking under Proof of Stake (PoS) generates validator rewards. Net issuance can approach zero or turn negative during periods of high network activity, depending on transaction volume and staking participation.

To view real-time ETH price, market cap, and circulating supply, visit Gate’s ETH trading page for live data, charts, volume, and on-chain metrics to assess current market conditions.

Who Created Ethereum (ETH) and When?

Ethereum was proposed by Vitalik Buterin and others in 2013, with its mainnet launching in 2015. The goal was to expand blockchain technology from simple transfers to a programmable computing platform.

Key milestones include: The Merge in 2022, which transitioned Ethereum from Proof of Work (PoW) to Proof of Stake (PoS); and EIP-4844 (Proto-Danksharding) in 2024, laying the foundation for future sharding and lower transaction fees. These upgrades have consistently improved Ethereum’s performance, energy efficiency, and scalability.

How Does Ethereum (ETH) Work?

Ethereum operates using a Proof of Stake (PoS) consensus mechanism. Validators stake ETH to propose and finalize blocks; honest behavior earns rewards while malicious actions are penalized through slashing.

Every transaction incurs a Gas fee, paid in ETH, which compensates for computational and storage resources. EIP-1559 split fees into a dynamically adjusted base fee (burned to reduce supply) and a priority tip for block proposers.

The Ethereum Virtual Machine (EVM) executes smart contract bytecode. Common token standards like ERC-20 (fungible tokens) and ERC-721 (NFTs) run on the EVM. Accounts are either externally owned accounts (EOAs—controlled by private keys) or contract accounts (managed by code). Recent account abstraction initiatives aim to make wallet experiences more user-friendly, supporting features like social recovery and flexible signing.

What Can You Do With Ethereum (ETH)?

In DeFi, users leverage ETH and tokens for trading, lending, yield strategies, and derivatives hedging. In the NFT sector, you can mint and trade digital collectibles and game assets. Enterprises and developers build solutions for payments, settlement, ticketing, and supply chain management—benefiting from transparency and programmability.

ETH can be used to pay transaction fees, participate in staking for network rewards, or engage in governance to propose changes to protocol parameters. For everyday users, common scenarios include interacting with DApps via wallets—for example: swapping tokens on decentralized exchanges, minting creative works for creators, or providing liquidity to projects.

What Wallets and Scaling Solutions Exist in the Ethereum Ecosystem?

Popular wallets include browser extensions and mobile apps for managing private keys, signing transactions, and connecting to DApps. Hardware wallets store private keys offline to improve security against attacks. Always record your recovery phrase securely offline—avoid taking photos or syncing to the cloud.

To reduce fees and boost throughput, Layer 2 scaling solutions settle transactions atop the Ethereum mainnet. Major types include optimistic rollups and zero-knowledge rollups; these process batches of transactions off-chain before posting data or proofs back to the mainnet for security. Users typically experience cheaper and faster transfers on Layer 2 networks.

What Are the Main Risks and Regulatory Considerations for Ethereum (ETH)?

Price Volatility: ETH’s price is influenced by macro factors and policy changes; short-term swings may be significant, so effective position management and stop-loss strategies are essential.

Contract & Application Risk: Smart contracts may have bugs or be vulnerable to attacks; exercise caution with DApp permissions such as token approvals—always verify contract addresses through official sources.

Private Key & Wallet Security: Loss or exposure of private keys results in irreversible asset loss. Use hardware wallets, enable two-factor authentication, set withdrawal whitelists, and beware of phishing links or fake sites.

Fees & Network Congestion: Gas prices rise during peak periods, causing delays or increased costs; MEV-related activities may affect transaction ordering and user experience.

Regulatory Uncertainty: Jurisdictions vary in their rules regarding tokens, staking, taxation, and KYC requirements. Always understand local regulations and platform policies before participating.

How Do I Buy and Safely Store Ethereum (ETH) on Gate?

Step 1: Register & Secure Your Account. Visit Gate’s official site to create an account. Enable two-factor authentication (2FA), set a strong password, and activate anti-phishing codes.

Step 2: Complete Identity Verification & Compliance. Fulfill KYC requirements as per local regulations and platform rules to unlock higher deposit, trading, and withdrawal limits.

Step 3: Deposit Funds. Choose between fiat deposits or transferring crypto assets like USDT/ETH—ensure network selection and tags are correct to avoid errors.

Step 4: Search & Place Trades. On Gate’s spot market, search for “ETH” and select either a market order (instant execution at current price) or limit order (placed at your chosen price). Review price, amount, and fees before confirming.

Step 5: Withdraw to Self-Custody Wallet (Optional). For long-term holding, transfer ETH to your own wallet. Test with a small amount first; enable withdrawal whitelists; confirm the network is “Ethereum”. Store your recovery phrase securely offline.

Step 6: Ongoing Security & Risk Management. Regularly review account security settings; monitor official updates; diversify investments; avoid unknown DApps or suspicious links.

How Does Ethereum (ETH) Differ From Bitcoin (BTC)?

Purpose: Bitcoin focuses on value storage and censorship-resistant money; Ethereum aims to be a programmable platform supporting diverse applications.

Supply Model: Bitcoin has a fixed cap of 21 million coins; Ethereum has no hard cap—net issuance depends on EIP-1559 burning and PoS rewards relative to on-chain activity.

Consensus & Energy: Bitcoin uses PoW secured by mining power; Ethereum utilizes PoS with staking for security—resulting in lower energy consumption.

Programmability & Applications: Ethereum’s EVM and contract standards enable thriving DeFi, NFT ecosystems; Bitcoin’s scripting is limited—application layers often rely on external protocols.

Fee Structure & Scalability: Ethereum features base fees plus tips and supports Layer 2 scaling for lower costs; Bitcoin’s fees depend on block space demand with different scaling approaches.

Summary of Ethereum (ETH)

Ethereum positions itself as a “programmable blockchain” combining PoS consensus with EVM-driven ecosystems—becoming foundational infrastructure for smart contracts and DApps. Its fee mechanisms and Layer 2 solutions continuously optimize user experience across finance, digital content, and enterprise use cases. Before participating, check live data and announcements on Gate, understand how gas fees and staking work, manage private keys diligently, and comply with local regulations. For long-term investors: track upcoming upgrades, ecosystem activity, fee trends—and apply diversification plus risk controls for portfolio resilience.

FAQ

How Should Beginners Start Learning And Using Ethereum?

Begin by understanding the core concepts of Ethereum. Gradually learn wallet management and trading operations—register an account on Gate for hands-on experience with small ETH purchases. Refer to official tutorials and community resources. Most importantly: safeguard your private key and recovery phrase—they are vital for protecting your assets.

Why Do Transactions on Ethereum Require Gas Fees?

Gas fees incentivize network validators to process transactions—ensuring security and stability across Ethereum. When network congestion increases, so do gas fees; when activity is low, fees decrease. You can save costs by transacting during off-peak hours or utilizing Layer 2 scaling solutions.

What’s The Difference Between An Ethereum Wallet, Exchange Wallet And Smart Contract Address?

An Ethereum wallet is personally controlled—you hold the private key and recovery phrase. An exchange wallet is managed by platforms like Gate—facilitating quick trades but relying on platform security. A smart contract address refers to program code deployed on-chain. For long-term holding use personal wallets; for frequent trading use exchange wallets.

What Is An ERC-20 Token And How Does It Relate To ETH?

ERC-20 is a standard protocol for tokens issued on Ethereum—many projects use it to launch their own tokens. ETH is the native currency used for paying gas fees and powering the ecosystem; ERC-20 tokens represent various application-specific assets built atop Ethereum. Both can be traded or held on exchanges like Gate.

What Does The Upgraded Proof Of Stake (PoS) Mechanism Mean For Regular Users?

PoS makes Ethereum more energy-efficient and secure while reducing transaction costs and wait times. Ordinary users can stake ETH to earn validation rewards or simply hold ETH to benefit from ecosystem growth opportunities—adding new ways holders can create value.

Glossary of Key Ethereum (ETH) Terms

• Smart Contract: Program code that executes automatically on Ethereum according to preset rules—without third-party intervention.
• Gas: The computational fee required to perform transactions or operations on Ethereum—paid in ETH.
• Virtual Machine (EVM): Ethereum’s computation engine responsible for executing smart contracts and maintaining blockchain state.
• Staking: Locking up ETH to participate in network validation—earning rewards while helping secure the protocol.
• DeFi: Decentralized finance applications built on Ethereum—including lending, trading, asset management services.
• Layer 2 (L2): Scaling solutions built atop Ethereum—improving transaction speed while reducing fees.

Further Reading & References

• Official Site / Whitepaper:

  • https://ethereum.org/zh/
  • https://ethereum.org/zh/whitepaper/

• Development / Documentation:

  • https://github.com/ethereum/go-ethereum
  • https://ethereum.org/zh/developers/docs/

• Media / Research:

  • https://blog.ethereum.org/
  • https://ethereum-foundation.medium.com/