Coin Guide

What Is Ethereum (ETH)?

2026-03-26 · 7 min read
A beginner-friendly explanation of Ethereum and ETH, covering smart contracts, DeFi ecosystem, and other key concepts.

After learning about Ethereum, register for Binance to buy ETH. Download the Binance APP to track ETH prices. Ethereum is much more than just a cryptocurrency. Our site explains what makes it unique.

Ethereum in One Sentence

Ethereum is a decentralized blockchain platform that enables smart contracts and decentralized applications (dApps), with ETH as its native cryptocurrency.

Key Facts

  • Creator: Vitalik Buterin
  • Launch: July 30, 2015
  • Market cap rank: #2 (after Bitcoin)
  • Consensus: Proof of Stake (PoS) since September 2022
  • Block time: ~12 seconds
  • Supply: No hard cap, but net issuance is low/negative post-merge

What Makes Ethereum Special?

Smart Contracts

Self-executing programs that run on the Ethereum blockchain. They enable agreements without intermediaries. Examples: automatic token swaps, lending protocols, insurance contracts.

Decentralized Applications (dApps)

Applications built on Ethereum that no single entity controls:

  • DeFi: Decentralized finance (lending, borrowing, trading)
  • NFTs: Non-fungible tokens for digital art, collectibles
  • DAOs: Decentralized autonomous organizations
  • Gaming: Blockchain-based games

ERC-20 Tokens

A standard for creating tokens on Ethereum. Many top cryptocurrencies (USDT, LINK, UNI) are ERC-20 tokens running on Ethereum.

ETH vs. BTC

Feature ETH BTC
Purpose Smart contract platform Digital gold
Rank #2 #1
Consensus Proof of Stake Proof of Work
Supply cap None (but deflationary) 21 million
Use cases DeFi, NFTs, dApps Store of value, payment
Block time ~12 seconds ~10 minutes

The Ethereum Ecosystem

Ethereum hosts the largest blockchain ecosystem:

  • Uniswap: Decentralized exchange
  • Aave/Compound: Lending protocols
  • OpenSea: NFT marketplace
  • MakerDAO: Stablecoin (DAI) creator
  • Layer 2s: Arbitrum, Optimism, zkSync (scaling solutions)

How to Buy ETH

  1. Register for Binance
  2. Buy USDT via C2C
  3. Trade -> Spot -> ETH/USDT -> Buy
  4. Or use Convert for instant swap

Staking ETH

Since Ethereum moved to Proof of Stake, you can stake ETH to earn ~3-5% APY. On Binance, stake ETH and receive WBETH tokens. WBETH can be traded anytime for liquidity.

FAQ

Is ETH a good investment?

Ethereum has strong fundamentals as the leading smart contract platform. However, all crypto investments carry risk.

What is gas?

Gas is the fee for transactions on Ethereum. It is paid in ETH. Gas costs vary with network congestion.

What was "The Merge"?

In September 2022, Ethereum switched from Proof of Work to Proof of Stake, reducing energy consumption by ~99.95%.

Are ERC-20 tokens the same as ETH?

No. ERC-20 tokens run on Ethereum but are different assets. ETH is the native currency used for gas.

Security Tips

  • Understand ETH basics before investing
  • Be careful with DeFi -- smart contract risks exist
  • Watch gas fees when transferring ETH on-chain
  • Diversify -- do not put everything into one asset
  • Use reputable platforms like Binance for trading

Register for Binance to buy, trade, and stake Ethereum on the world's largest exchange.

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