WHAT IS ETHER?

Ether (ETH) is the native cryptocurrency of Ethereum. The purpose of ETH is to allow for a market for computation. Such a market provides an economic incentive for participants to verify and execute transaction requests and provide computational resources to the network.

Any participant who broadcasts a transaction request must also offer some amount of ETH to the network as a bounty. The network will award this bounty to whoever eventually does the work of verifying the transaction, executing it, committing it to the blockchain, and broadcasting it to the network.

The amount of ETH paid corresponds to the resources required to do the computation. These bounties also prevent malicious participants from intentionally clogging the network by requesting the execution of infinite computation or other resource-intensive scripts, as these participants must pay for computation resources.

ETH is also used to provide crypto-economic security to the network in three main ways: 1) it is used as a means to reward validators who propose blocks or call out dishonest behavior by other validators; 2) It is staked by validators, acting as collateral against dishonest behavior—if validators attempt to misbehave their ETH can be destroyed; 3) it is used to weigh 'votes' for newly proposed blocks, feeding into the fork-choice part of the consensus mechanism.