Ethereum (ETH): Why do Investors Buy Ether?

There are many different reasons why investors buy Ethereum. Here are some reasons why investors do (and don’t) buy ETH.

Buying ETH because of the developers behind it

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 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.

How is the price of Ethereum determined?

The price of ETH in EUR is determined by the international Ethereum market. Basically, the price to be found on cryptocurrency exchanges all around the world.

What is a Smart Contract?

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.

What is Ether?

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.

What are gas fees?

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.

Can I buy ETH using bank transfers?

Yes, you can buy ETH using bank transfers on CoinJar. You can deposit EUR using bank transfer. There are no deposit fees.

Once you have EUR in your CoinJar account, you can buy ETH as described above.

How do I buy Ethereum?

To buy ETH, you need to create an account on CoinJar and verify your who you are. Then, deposit EUR using bank transfer. After that, you can select ETH.

Choose how much ETH you want to buy and confirm the order. The ETH will appear in your CoinJar wallet once the transaction is finished.

Can I buy €20 worth of Ethereum?

Yes, you can buy €20 worth of ETH on CoinJar.

You can deposit Euro using bank transfer.

The payment method can be different on different exchanges. At CoinJar, the minimum deposit amount is €20, and the minimum trade amount is €10.

CoinJar charges small fees for buying and selling crypto.

Conclusion: Why do investors buy Ethereum?

Ethereum, envisioned by Vitalik Buterin, stands as a pioneering blockchain-based platform. Unlike Bitcoin's Proof-of-Work consensus, Ethereum transitioned to a Proof-of-Stake (PoS) consensus mechanism.

Moving from Proof-of-Work (POW) to Proof-of-Stake consensus enhanced energy efficiency and protection. Ether, its native cryptocurrency, fuels the execution of smart contracts on the Ethereum blockchain.

This blockchain technology empowers developers to build applications and deploy digital assets in a protected, peer-to-peer network devoid of any central authority.

Users control their assets with private keys. The Ethereum blockchain functions as a distributed ledger, providing transparency and immutability.

Looking ahead, future versions of Ethereum promise further advancements. This innovative platform offers a robust programming language to create a wide array of decentralised applications.