In basic terms; ETH is digital, global money. It’s the currency of Ethereum apps and ecosystems.
ETH is a cryptocurrency. It is scarce digital money that you can use on the internet – similar to Bitcoin. If you’re new to crypto, here’s how ETH is different from traditional money.
Benefits and Attributes of Ether Gas
It’s really yours
ETH lets you be your own bank. You can control your own funds with your wallet as proof of ownership – no third parties necessary.
Secured by cryptography
Internet money may be new but it’s secured by proven cryptography. This protects your wallet, your ETH, and your transactions.
You can send your ETH without any intermediary service like a bank. It’s like handing cash over in-person, but you can do it securely with anyone, anywhere, anytime.
No centralized control
Open to anyone
You only need an internet connection and a wallet to accept ETH. You don’t need access to a bank account to accept payments.
Available in flexible amounts
ETH is divisible up to 18 decimal places so you don’t have to buy 1 whole ETH. You can buy fractions at a time – as little as 0.000000000000000001 ETH if you want.
What’s unique about ETH?
There are many cryptocurrencies and lots of other tokens on Ethereum, but there are some things that only ETH can do.
ETH fuels and secures Ethereum
ETH is the lifeblood of Ethereum. When you send ETH or use an Ethereum application, you’ll pay a small fee in ETH to use the Ethereum network. This fee is an incentive for a miner to process and verify what you’re trying to do.
Miners are like the record-keepers of Ethereum – they check and prove that no one is cheating. Miners who do this work are also rewarded with small amounts of newly-issued ETH.
The work miners do keeps Ethereum secure and free of centralized control. In other words, ETH powers Ethereum. More on Mining
ETH will become even more important with staking. When you stake your ETH you’ll be able to help secure Ethereum and earn rewards. In this system, the threat of losing your ETH disincentivises attacks.
ETH underpins the Ethereum financial system
Not satisfied with payments, the Ethereum community is building a whole financial system that’s peer-to-peer and accessible to everyone.
You can use ETH as collateral to generate entirely different cryptocurrency tokens on Ethereum. Plus you can borrow, lend and earn interest on ETH and other ETH-backed tokens.
Why does ETH have Value?
ETH’s valuable in different ways to different people.
For users of Ethereum, ETH is valuable because it lets you pay transaction fees.
Others see it as a digital store of value because the creation of new ETH slows down over time.
More recently, ETH has become valuable to users of financial apps on Ethereum. That’s because you can use ETH as collateral for crypto loans, or as a payment system.
Of course many also see it as an investment, similar to Bitcoin or other cryptocurrencies.
ETH isn’t the only crypto on Ethereum
Anyone can create new kinds of assets and trade them on Ethereum. These are known as ‘tokens’. People have tokenised traditional currencies, their real estate, their art, and even themselves!
Ethereum is home to thousands of tokens – some more useful and valuable than others. Developers are constantly building new tokens that unlock new possibilities and open new markets.
Popular types of token
Tokens that mirror the value of traditional currency like dollars. This solves the volatility problem with many cryptocurrencies.
Tokens that represent voting power in decentralized organisations.
Because making new tokens is easy, anyone can do it – even people with bad or misguided intentions. Always do your research before using them!
Tokens that represent a collectible game item, piece of digital art, or other unique assets. Commonly known as non-fungible tokens (NFTs).