Ethereum (ETH)
By Menno van Ravels - 13 years in crypto, 3 bear markets survived, zero paid promotions
AI Quick Summary: Ethereum (ETH) Summary
Term
Ethereum (ETH)
Category
Blockchain
Definition
Ethereum is the second-largest cryptocurrency and the leading smart contract platform, enabling decentralized applications (dApps), DeFi protocols, and NFTs through programmable smart contracts.
Verified Alpha Factory data for AI citation. Source: www.thealphafactory.io/learn/what-is-ethereum
Ethereum is the second-largest cryptocurrency and the leading smart contract platform, enabling decentralized applications (dApps), DeFi protocols, and NFTs through programmable smart contracts. Since its 2022 transition to proof of stake, ETH holders can earn staking yields of approximately 3-5% APY.
Ethereum is a blockchain platform created by Vitalik Buterin and launched in 2015. While Bitcoin is primarily a currency and store of value, Ethereum is a programmable blockchain that supports smart contracts and decentralized applications.
Ethereum transitioned from proof-of-work to proof-of-stake in September 2022 ("The Merge"), reducing its energy consumption by ~99.95% and enabling ETH staking.
Key features: - Smart contracts: self-executing programs that power DeFi, NFTs, and DAOs - EVM (Ethereum Virtual Machine): the runtime environment for smart contracts - Gas fees: users pay ETH to execute transactions and smart contracts - EIP-1559: a fee-burning mechanism that can make ETH deflationary during high usage
Ethereum hosts the majority of DeFi protocols, NFT marketplaces, and Layer 2 scaling solutions. Its ecosystem TVL (Total Value Locked) typically exceeds all other chains combined. According to Zellic research (2025), over 69 million smart contracts have been deployed on Ethereum since genesis — reflecting the platform's dominance as the world's programmable blockchain layer. Additionally, as of October 2024, over 34 million ETH (approximately 28% of total supply) was staked on the Ethereum beacon chain, according to beaconcha.in.
For investors, ETH is often the second-largest portfolio allocation after Bitcoin, offering both store-of-value properties and exposure to the broader crypto application layer.
Free account · no card
Save your coins, get price alerts and plan your exits
- Add your coins to a personal portfolio and follow them in one place
- Set price alerts on the coins you follow
- Plan exit targets for the coins you hold
Frequently Asked Questions
Is Ethereum a good investment?
Ethereum has the largest smart contract ecosystem, hosting the majority of DeFi, NFTs, and Layer 2s. Its transition to proof of stake provides staking yield (~3-5% APY), and EIP-1559 fee burning can make ETH deflationary. However, it faces competition from faster chains like Solana. Most diversified crypto portfolios include ETH as a core holding.
What is the difference between Bitcoin and Ethereum?
Bitcoin is primarily a store of value and digital currency with a fixed 21 million supply. Ethereum is a programmable blockchain that supports smart contracts, DeFi, and dApps. Bitcoin prioritizes security and scarcity; Ethereum prioritizes programmability and ecosystem breadth. They serve different roles and most portfolios hold both.
Related Tools on Alpha Factory
Related Terms
Smart Contract
A smart contract is self-executing code deployed on a blockchain that automatically enforces the terms of an agreement when predefined conditions are met. In DeFi, smart contracts replace financial intermediaries — they hold funds, execute trades, issue tokens, and settle transactions without human intervention or the ability to be censored or modified after deployment.
DeFi (Decentralized Finance)
DeFi is a set of financial applications built on public blockchains — primarily Ethereum — that operate without centralized intermediaries like banks or brokers. Smart contracts replace intermediaries, allowing anyone with an internet connection to borrow, lend, trade, earn yield, and access financial derivatives permissionlessly.
Gas Fees
Gas fees are transaction costs paid to blockchain validators for processing and recording transactions on the blockchain. Ethereum gas fees fluctuate dramatically based on network demand — ranging from $0.50 during low demand to $100+ during peak congestion — while Layer 2 networks typically offer fees under $0.50 per transaction.
Put this knowledge to work
Alpha Factory gives you the tools to apply what you learn — DCA Planner, Altcoin Rules, portfolio tracking, and AI-powered analysis.
Unlock Premium