# Ether and Ethereum: the asset, the network and the units Ethereum is the network; ether, abbreviated ETH, is its native asset. One ETH equals one billion gwei or one billion billion wei. Ethereum transaction fees are ultimately paid in ETH, even when an application lets a sponsor pay or presents the cost in another token. Evidence: [Introduction to ether](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/intro-to-ether/index.md); [Gas and fees](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/gas/index.md); [ERC-4337: Account Abstraction Using Alt Mempool](https://raw.githubusercontent.com/ethereum/ERCs/583335b7912e51b1ea515bb662532dd29b27e786/ERCS/erc-4337.md) Canonical: https://degreesofsatoshi.com/encyclopedia/ether-and-ethereum/ Published: 2026-10-02 Substantively modified: 2026-10-02 Independently verified by an automated reviewer: 2026-10-02T15:10:23.134Z AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied. ## Key facts - **Smallest unit:** One wei equals 10^-18 ETH ([Introduction to ether](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/intro-to-ether/index.md)) - **Fee quotation:** One gwei equals 10^-9 ETH ([Gas and fees](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/gas/index.md)) - **Token distinction:** An ERC-20 balance is contract state, separate from native ETH ([ERC-20: Token Standard](https://raw.githubusercontent.com/ethereum/ERCs/583335b7912e51b1ea515bb662532dd29b27e786/ERCS/erc-20.md); [Ethereum accounts](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/accounts/index.md)) ## ETH is built into the protocol’s accounts and fees An Ethereum account has a native ETH balance. Sending ETH changes that balance under the protocol rules. A different token usually maintains balances inside its own contract, using the network to execute those changes. This distinction explains a common surprise: someone can have a positive token balance but insufficient ETH for an ordinary transaction. Having the thing being transferred does not necessarily pay for the computation that transfers it. Evidence: [Introduction to ether](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/intro-to-ether/index.md); [Ethereum accounts](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/accounts/index.md) ## Example: convert a fee without a market-price assumption Suppose an illustrative operation uses 50,000 gas at an effective price of 4 gwei per gas. Its execution fee is 200,000 gwei, which is 0.0002 ETH. These are example inputs, not a current network quote. The conversion is exact because the units are fixed. A dollar estimate is different: it requires an ETH exchange rate and a timestamp. Changing the dollar price does not change the number of wei already charged. Evidence: [Introduction to ether](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/intro-to-ether/index.md); [Gas and fees](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/gas/index.md) ## A sponsored transaction still has a payer Account-abstraction systems can let a paymaster cover network gas. A service might charge the user in a token, subsidize onboarding or apply its own conditions. Ethereum’s underlying gas settlement remains in ETH. A screen that says no ETH required describes a user-facing arrangement. It does not mean the network has stopped charging or that every wallet supports the same sponsorship terms. Evidence: [ERC-4337: Account Abstraction Using Alt Mempool](https://raw.githubusercontent.com/ethereum/ERCs/583335b7912e51b1ea515bb662532dd29b27e786/ERCS/erc-4337.md); [Gas and fees](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/gas/index.md) ## Units, supply and value answer different questions Ethereum issues ETH through consensus rewards and removes ETH through mechanisms including base-fee burning. The balance between issuance and burning can vary; a burn mechanism alone does not establish permanent supply decline. Neither the denomination nor a supply calculation establishes a fair market price. This entry explains the asset’s protocol role and unit arithmetic, not a forecast or a reason to acquire it. Evidence: [How ETH supply changed after the Merge](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/roadmap/merge/issuance/index.md); [EIP-1559: Fee market change](https://raw.githubusercontent.com/ethereum/EIPs/ac912ca6a9685590345dd8e5736cda75976d0131/EIPS/eip-1559.md) ## Questions ### Is gwei a separate cryptocurrency? No. Gwei is a unit of ether, like a smaller denomination of the same asset. One billion gwei is exactly one ETH. Evidence: [Introduction to ether](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/intro-to-ether/index.md) ### Does every Ethereum token pay its own network fee? No. Token balances and native ETH balances are separate. A sponsor can provide an alternative payment experience, but the network gas bill is settled in ETH. Evidence: [ERC-20: Token Standard](https://raw.githubusercontent.com/ethereum/ERCs/583335b7912e51b1ea515bb662532dd29b27e786/ERCS/erc-20.md); [ERC-4337: Account Abstraction Using Alt Mempool](https://raw.githubusercontent.com/ethereum/ERCs/583335b7912e51b1ea515bb662532dd29b27e786/ERCS/erc-4337.md) ### Did the Merge create a new ETH token? No. Ethereum preserved its balances and history through the Merge. Holders did not need to exchange old ETH for a new protocol token. Evidence: [The Merge](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/roadmap/merge/index.md) ## Claims and scope ### ether-and-ethereum-quick-answer Ethereum is the network; ether, abbreviated ETH, is its native asset. One ETH equals one billion gwei or one billion billion wei. Ethereum transaction fees are ultimately paid in ETH, even when an application lets a sponsor pay or presents the cost in another token. Scope: {"collection":"ethereum","dataAsOf":null,"blockHeight":null} ### ether-and-ethereum-fact-smallest-unit Smallest unit: One wei equals 10^-18 ETH Scope: {"collection":"ethereum","dataAsOf":null,"blockHeight":null} ### ether-and-ethereum-fact-fee-quotation Fee quotation: One gwei equals 10^-9 ETH Scope: {"collection":"ethereum","dataAsOf":null,"blockHeight":null} ### ether-and-ethereum-fact-token-distinction Token distinction: An ERC-20 balance is contract state, separate from native ETH Scope: {"collection":"ethereum","dataAsOf":null,"blockHeight":null} ## Sources - [Introduction to ether](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/intro-to-ether/index.md) — ethereum.org contributors. Defines ETH, wei and gwei, the transaction value field and the role of ETH in fees and staking. Locator: What is ether; denominations; transferring ether. Retrieved: 2026-10-02T14:42:49.460408+00:00. - [Gas and fees](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/gas/index.md) — ethereum.org contributors. Supports gas units, ETH/gwei units, base/priority fees, resource limits and charges for executed failed transactions. Locator: How are gas fees calculated; base fee; gas limit. Retrieved: 2026-10-02T14:35:40.393022+00:00. - [ERC-4337: Account Abstraction Using Alt Mempool](https://raw.githubusercontent.com/ethereum/ERCs/583335b7912e51b1ea515bb662532dd29b27e786/ERCS/erc-4337.md) — Ethereum Request for Comments. Defines user operations, bundlers, programmable validation and sponsored gas settlement. Locator: Abstract; definitions; UserOperation; EntryPoint; paymasters. Retrieved: 2026-10-02T14:35:55.049363+00:00. - [ERC-20: Token Standard](https://raw.githubusercontent.com/ethereum/ERCs/583335b7912e51b1ea515bb662532dd29b27e786/ERCS/erc-20.md) — Ethereum Request for Comments. Defines fungible token balances, optional display metadata and spending allowance behavior. Locator: Methods: decimals, balanceOf, transfer, approve, transferFrom, allowance. Retrieved: 2026-10-02T14:35:55.037727+00:00. - [Ethereum accounts](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/accounts/index.md) — ethereum.org contributors. Supports accounts versus wallet software and account state fields. The older empty-code EOA description is qualified using EIP-7702. Locator: Account types; an account examined; a note on wallets. Retrieved: 2026-10-02T14:35:40.369782+00:00. - [How ETH supply changed after the Merge](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/roadmap/merge/issuance/index.md) — ethereum.org contributors. Supports consensus issuance versus fee burning; historical issuance estimates are not used as current rates. Locator: Post-merge issuance; the burn. Retrieved: 2026-10-02T14:35:44.215542+00:00. - [EIP-1559: Fee market change](https://raw.githubusercontent.com/ethereum/EIPs/ac912ca6a9685590345dd8e5736cda75976d0131/EIPS/eip-1559.md) — Ethereum Improvement Proposals. Defines the base-fee burn, tip, maximum fee and effective gas price calculation. Locator: Abstract; specification; reference implementation. Retrieved: 2026-10-02T14:35:51.249311+00:00. - [The Merge](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/roadmap/merge/index.md) — ethereum.org contributors. Supports the 2022 consensus transition, preservation of history and ETH balances, and separation from fee scaling and withdrawals. Locator: What was the Merge; users and holders; misconceptions; relationship between upgrades. Retrieved: 2026-10-02T14:35:43.712420+00:00. ## Revision history - 2026-10-02: First publication after primary-source research and independent automated verification. ## Cite this entry Degrees of Satoshi editorial project. “Ether and Ethereum: the asset, the network and the units.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/ether-and-ethereum/