What is Ethereum (ETH)?

Ethereum is the world's largest smart contract platform: not merely a value-transfer network but a programmable global computer on which applications run — decentralized finance (DeFi) protocols, NFT markets, stablecoins, games, and tokenized assets. It was designed in 2013 by Vitalik Buterin, developed with a founding team including Gavin Wood and Joseph Lubin, and went live on July 30, 2015. ETH is the network's native asset: transaction fees (gas) are paid in ETH, network security rests on validators staking ETH, and ETH — the sector's second-largest crypto asset — is DeFi's foundational collateral. Today the largest share of stablecoin supply, tokenized real-world assets, and DeFi locked value lives on Ethereum and its Layer-2 (L2) networks — Ethereum is the crypto economy's de facto settlement layer.

Important Note: With the historic "Merge" of September 2022, Ethereum moved from energy-intensive mining to Proof-of-Stake, cutting energy use by ~99.95%. Subsequent upgrades — Dencun (2024, blobs lowering L2 costs), Pectra (2025, account abstraction and staking improvements), and Fusaka (December 2025, data scaling) — advanced the L2-centric scaling roadmap. On the institutional side, US spot ETH ETFs arrived (July 2024), followed by staking-enabled products. On price, a harsh cycle played out: after seeing its all-time high of ~$4,950 in August 2025, ETH entered a deep correction; as of August 2026, when this guide was prepared, it was trading in the ~$1,850-1,920 band — roughly 61-62% below its peak.

History and Founders

• 2013-2015: Vitalik Buterin's whitepaper; the founding team's formation; the 2014 ICO at ~$0.31 and the July 30, 2015 mainnet launch.
• 2016: The DAO exploit and the historic hard fork (the Ethereum Classic split).
• 2017-2021: The ICO wave, DeFi Summer (2020), and the NFT boom (2021); the ~$4,870 cycle peak in November 2021; the start of fee burning via EIP-1559 (2021).
• September 2022: The Merge — the transition from PoW to PoS; ~99.95% lower energy use.
• 2023-2024: Shanghai (staking withdrawals) and Dencun (blobs, a major drop in L2 fees); US spot ETH ETFs in July 2024.
• 2025: The Pectra (account abstraction, validator improvements) and Fusaka (PeerDAS data scaling) upgrades; the ~$4,950 all-time high in August 2025; staking arriving in ETF products.
• 2026: A deep retracement with the broad market correction; continued growth of the L2 ecosystem and the tokenization narrative.

How Does It Work?

• Smart contracts and the EVM: Developers write programs running on the Ethereum Virtual Machine (EVM); the EVM has become the sector's de facto standard — hundreds of chains are EVM-compatible.
• Proof-of-Stake: Validators secure the network by staking 32 ETH (or pooling via liquid-staking protocols); misbehavior is punished by slashing.
• Gas and burning: Every transaction pays gas; with EIP-1559 the base portion of fees is burned — ETH has been net-deflationary in high-usage periods.
• L2-centric scaling: Layer-2 networks such as Arbitrum, Base, and Optimism execute transactions cheaply and settle security to Ethereum; blobs lower this model's data costs.

Use Cases

• DeFi's foundation: The main collateral and settlement asset for lending, DEXs, stablecoins, and derivatives.
• Staking yield: Participation in network security and protocol yield by staking ETH.
• The tokenization base: The primary venue for institutional RWA/tokenized-fund issuance (including BlackRock's tokenized fund).
• The gas asset: The fuel of all activity across Ethereum and the L2 ecosystem.
• Institutional products: Spot ETFs, staking-enabled products, and corporate treasury allocations.

Tokenomics

ETH has no fixed maximum supply; circulating supply is ~120.7 million ETH, and supply dynamics balance two forces: new issuance to validators (low under PoS) versus EIP-1559 fee burning. In high-usage periods burning has exceeded issuance and supply has contracted; in quiet periods mild inflation appears — the net result depends on usage and has historically ranged around ±0.5% annually. A significant share of supply is staked, a structural factor reducing effective circulating liquidity.

Why It Matters

Ethereum's position comes not from a single product but from the composite of network effects: the largest developer community, the deepest DeFi liquidity, the universality of the EVM standard, centrality in stablecoin and tokenization volume, and its place on the institutional product shelf (ETFs, staking products). The upgrade capability proven by the Merge — swapping the engine of a running trillion-dollar system mid-flight — demonstrates the protocol's capacity to evolve. The L2-centric roadmap externalizes scaling without compromising mainnet security. As the institutional tokenization wave grows, Ethereum's role as the settlement layer keeps it at that narrative's center.

Risks

• The deep correction: ETH has retraced ~61-62% from its August 2025 peak; 2026's macro shocks (recession fears, geopolitical tension) sustained the pressure, and there is no bottom confirmation.
• L1 competition: High-performance rival chains, led by Solana, take share in user activity and new asset issuance.
• The L2 value-capture debate: Activity moving to L2s can reduce mainnet fee revenue and burning — the "where does ETH value accrue" debate continues.
• Complexity: The continuous upgrade agenda carries technical risk; staking centralization (liquid staking and large custodians) is a monitored issue.
• The regulatory framework: Regulation of staking, DeFi, and tokenization is still evolving.
• Volatility: ETH can move with even higher beta than BTC; harsh cycles are structural.

Price and Market Status

ETH saw peaks of ~$4,870 in the 2021 cycle and — with the ETF and tokenization wave — ~$4,950 in August 2025. A deep correction followed with the broad market: to ~$3,000 by December 2025, then gradually below $2,000 within 2026.

As of early August 2026, when this guide was prepared, ETH was trading in the roughly $1,850-1,920 band — ~61-62% below its peak — and, with a ~$233 billion market cap, was the second-largest crypto asset after Bitcoin. Confirm the current price from live data before trading.

How to Buy Ethereum (ETH)

1. Create a Bitlo account: Sign up for Bitlo and complete email and phone verification.
2. Complete identity verification (KYC): As required by Turkish regulations, complete the identity verification steps.
3. Add funds: Transfer a balance to your account using Turkish Lira deposit methods.
4. Find the ETH trading pair: Select the ETH/TRY pair from the trading screen.
5. Place your order: Use a market order for an immediate purchase, or a limit order to buy at a specific price; fractional purchases are possible.
6. Choose how to store it: You can keep your ETH in your Bitlo account or withdraw it to your own wallet.

Before trading, it is helpful to check the current trading pairs and fees on Bitlo.

Frequently Asked Questions (FAQ)

What is Ethereum (ETH) and what is it used for?

Ethereum is the largest programmable blockchain running smart contracts and decentralized applications. ETH is the foundational asset for gas fees, staking, DeFi collateral, and institutional products.

What is the difference between Bitcoin and Ethereum?

Bitcoin is a fixed-supply digital money/store-of-value network; Ethereum is a programmable platform running applications. BTC is secured by PoW mining, ETH by PoS staking since September 2022.

What was the Merge?

Ethereum's September 2022 transition from mining to Proof-of-Stake; it cut energy use by ~99.95% and launched the staking economy — a historic engineering transition executed on a massive running system.

What is ETH's supply — is it unlimited?

There is no fixed cap; supply is ~120.7 million ETH. New issuance is low and balanced by EIP-1559 fee burning — supply can contract in heavy usage and rises slightly in quiet periods.

How can I buy ETH from Turkey?

You can buy ETH on Bitlo after creating an account, completing your identity verification, and depositing a Turkish Lira balance; fractional purchases are possible.

What is Ethereum's biggest risk?

The most prominent risks are the potential deepening of the ~61-62% correction, L1 competition led by Solana, the debate over L2 growth's effect on mainnet value capture, and the evolving regulatory framework.