What is Ethereum?

Ethereum (ETH) is a decentralized, open-source blockchain that extends the basic concept of Bitcoin with smart contracts — programs that run exactly as written on a shared, tamper-proof virtual machine. Launched in 2015 by Vitalik Buterin and a team of co-founders, Ethereum is the foundation for most of the decentralized finance (DeFi), NFT, and token ecosystems that exist today.

Ether (ETH)

The native cryptocurrency of Ethereum is called ether (ETH). It is used to pay for computation on the network — every transaction, every smart contract call, every token transfer — must be paid for in ETH. This is similar to how you pay a small fee to send a Bitcoin transaction.

Why it matters for payments

Ethereum is the second-most widely accepted cryptocurrency by merchants, behind only Bitcoin. Stablecoins like USDC and USDT (the most popular dollar-pegged tokens) are predominantly issued on Ethereum, which means many merchants that “accept stablecoin payments” are technically receiving them on Ethereum or an Ethereum-compatible network.

The Ethereum network has undergone several major upgrades. The 2022 shift to proof-of-stake (“The Merge”) reduced Ethereum’s energy consumption by roughly 99.95%. The 2024 introduction of proto-danksharding (EIP-4844) reduced Layer 2 rollup fees, making small stablecoin payments far more practical.

Where to spend Ethereum

You can spend ETH directly at merchants that accept it, send USDC/USDT that live on Ethereum, or use a crypto debit card that converts ETH to fiat at the point of sale.