Ethereum is the second biggest cryptocurrency and the crypto that pioneered the broader use of blockchain as a technology.
Created in 2015 by 19-year-old prodigy Vitalik Buterin, Ethereum inverted the Bitcoin model, emphasising the blockchain over the currency itself. If blockchains could verify monetary transactions, then why not shipping manifests, airline bookings, website code or home ownership?
Ethereum’s biggest innovation in this respect was what Buterin termed ‘smart contracts’ – programmable and unalterable contracts that would auto-execute when certain conditions were met. This simple idea meant Ethereum could become the first true blockchain platform: a blockchain upon which decentralised apps and blockchains could be built.
Participants pay so-called “gas” fees to use the network, which are denominated in Ethereum’s native cryptocurrency, Ether (ETH). The more demand there is, the higher the gas fees.
While there’s no hardcoded upper limit on the amount of ETH to be created like there is with Bitcoin, Ethereum has introduced a mechanism that means a certain amount of ETH is burnt in every transaction, helping to reduce inflationary pressures. It’s predicted that over time this will lead to more ETH being destroyed than created.
The network is powered by a Proof-of-Stake consensus model that requires 99.95% less energy than Proof-of-Work models like Bitcoin. This means that people who hold a certain amount of ETH can stake it to help verify transactions, receiving newly issued ETH in the process.
Many of the biggest and most exciting projects in the crypto space are built on Ethereum. The platform’s ERC-20 standard is the architecture that powers more than 20 of the coins on CoinJar – including all the major DeFi projects – while NFTs (non-fungible tokens) came into being thanks to ERC-721.
While it’s still rare to find retailers that accept Ethereum as payment, with CoinJar Card you can use the Ethereum in your CoinJar account (or any of the other 50+ cryptos we offer) to make purchases anywhere that Mastercard is accepted.
The safest way to Buy Ethereum is through a trusted exchange with a proven track record. CoinJar is Australia’s longest-running crypto exchange and has been operating since 2013 with no unplanned downtime, security breaches or loss of customer funds. We are registered with AUSTRAC and the FCA UK (for AML purposes) and work with some of the world’s largest payment providers, including Mastercard, Visa, Apple Pay and Google Pay.
The price of ETH in AUD is determined by the international Ethereum market – basically, the price to be found on cryptocurrency exchanges in Australia and all around the world. These prices tend to be the same (or very close) because any differences are smoothed out by arbitrage traders that buy at one exchange and sell at another.
Smart contracts are Ethereum’s key innovation over Bitcoin. In essence, smart contracts let you create agreements between parties or layers of code that are automatically executed when certain conditions are met. By using smart contracts, developers have built the vast and growing ecosystem of decentralised apps (dApps) increasingly being referred to as web3.
Ether (ETH) is the native currency of the Ethereum network. When people want to use the system or add information to the blockchain – for instance, by transferring funds, making a purchase or executing a smart contract – they have to pay a transaction cost in Ether.
Gas fees refer to the amount of ETH you need to pay in order to perform a transaction or execute a smart contract on the Ethereum network. Gas fees are set in ‘gwei’ (short for gigawei, with wei being the smallest possible denomination of Ether) and are determined by the demand for transaction space. The more demand, the higher the gas fees. During periods of high demand, gas fees can reach US$50 per transaction, but are more commonly around 50c.
CoinJar’s digital currency exchange services are operated by CoinJar Australia Pty Ltd ACN 648 570 807, a registered digital currency exchange provider with AUSTRAC.
CoinJar Card is a prepaid Mastercard® issued by EML Payment Solutions Limited ABN 30 131 436 532 AFSL 404131 pursuant to license by Mastercard Asia/Pacific Pte. Ltd. CoinJar Australia Pty Ltd is an authorised representative of EML Payment Solutions Limited (AR No 1290193). We recommend you consider the Product Disclosure Statement and Target Market Determination before making any decision to acquire the product. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated.
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