What Is Ether (ETH)?
Ether, usually written as ETH, is the native cryptocurrency of the Ethereum blockchain, a decentralized network that runs programs called smart contracts. Ether is the unit used to pay for actions on the network, and it is also traded on cryptocurrency exchanges as a digital asset. Ethereum is the network, while ether is the currency that moves across it.
How Ether Is Used
Every transaction and computation on Ethereum requires a fee, known as a gas fee. Gas is priced in small units of ether called gwei, where one gwei equals one billionth of an ETH. Users pay these fees in ether, and the network's validators receive them as compensation for processing activity. Ether is also used as collateral and as a medium of exchange within decentralized finance (DeFi) applications, and many tokens built on Ethereum are priced against it.
Proof of Stake and Staking
Ethereum originally relied on proof of work mining. In September 2022 it switched to proof of stake, in an upgrade commonly called the Merge. Under proof of stake, validators lock up ether as a stake to take part in confirming blocks. Holders who stake their ether may receive rewards, but staked ether can also be penalized if a validator behaves dishonestly or goes offline, and access to staked funds depends on how the staking is arranged.
Risks for Investors
Ether's price is set by trading on open markets and can change sharply over short periods. Its value depends on demand for Ethereum's services, on developer activity, and on regulatory developments that differ across countries. Like other cryptocurrencies, ether is not backed by a government or central bank, and losses can be total. Investors often compare market capitalization and volatility when evaluating an asset, but neither measure guarantees future results.
Updated October 26, 2026. For general education only; not financial, tax or legal advice.