For those new to Crypto, the biggest name you will have heard of is likely going to be the powerhouse that is Bitcoin. The main reason behind BTC becoming such a household name is due to the incredible gains it has had in recent years.
These Bitcoin gains have netted many people who invested in the cryptocurrency a huge return on their investment. However, those who decided to buy Ethereum have had an equally phenomenal year.
In this article, we’re going to dive into ten reasons why you should strongly consider buying Ethereum. We’ll also explain why you should consider holding onto it for the next five years.
And if you decide to invest in the innovative technology Ethereum after these ten reasons? Then we will tell you just how to buy Ethereum. But first, for those of you who don’t know, let’s look at just what Ethereum is.
What is Ethereum?
Ethereum was masterminded by the innovative entrepreneur Vitalik Buterin and released in 2015. It’s an open-source public blockchain that gives people the ability to build on the blockchain. It can also be used as a digital currency which brings up the question: what’s the difference between Ethereum and Ether?
There’s Ethereum and then there is Ether, these are two different things and it’s important to distinguish the difference between the two. Not dissimilar to Bitcoin, Ether is a form of Cryptocurrency and, after Bitcoin, is the second-largest by market capitalization. Ethereum, on the other hand, is the Blockchain technology behind it and is the most actively used blockchain.
Bitcoin and Ether have many similar characteristics. They’re both digital currencies that can be used to make transactions and both can be invested in by buying coins. When it comes to price, Ether is a lot cheaper than BTC although not pocket change either. Now, let’s dive into the ten reasons why you should buy Ethereum and hold onto it for the next five years.
10Those who chose to buy Ethereum in the last twelve months saw greater returns than BTC
Whilst Ethereum is similar to Bitcoin, there is one significant difference: the blockchain of Ehtereum is programmable. Whilst the most well-known use of Ether is for monetary transfer, it also has a range of other digital asset applications, including applications, games, financial services, and NFTs.
The statistics don’t lie, Ethereum has done extremely well recently. Since the start of 2021, the price of Ethereum has skyrocketed by 1,700% over the past twelve months. To put that in comparison with Bitcoin, the price of the latter has increased 518% over the past 12 months. You don’t need to be an expert to see that Ethereum has netted investors a greater return than BTC.
9Ethereum is decentralized
When it comes to the most decentralized cryptocurrency in the world, Ethereum is second only to Bitcoin. Of course, whilst Ethereum is heavily influenced by some people and organizations such as Vitalik Buterin and ConsenSys, there is no centralized authority that has ultimate control over Ethereum. But what does this mean?
Well, take for example some other smart contract platforms such as NEO. Unlike Ethereum, platforms like NEO are controlled by a centralized organization. With these types of platforms, accounts can be frozen, transactions can be reversed at the decision of said centralized organization.
8Ethereum is second only to Bitcoin when it comes to Market Cap
Market cap put simply is a metric that measures the relative size of a digital currency. It works by multiplying the current market price of a coin or token with the total number of coins in circulation. For the past few years, Ethereum has been second only to Bitcoin when it comes to market cap.
“With that said, if you were to be a long-term investor in Ethereum, you have to focus on the long-term timeline, with short-term volatility being a necessary even to find traction within the market, and for value to solidify.”– Jeff Reed, Investing in Ethereum: The Essential Guide to Profiting from Cryptocurrencies
Whilst it might be second to BTC, the volume of Ethereum is currently rising quicker than Bitcoin. This shows us that traders are trading Ethereum more relative to Bitcoin. Overall, this is a good proxy of interest. It demonstrates that there’s a potential to see bigger gains investing in Ethereum than investing in Bitcoin.
7The number of significant investors who have chosen to buy Ethereum is growing rapidly
Bitcoin grabbed headlines with a growing range of investors like Galaxy Digital Holdings and Tesla. But Ethereum also has no shortage of big businesses investing in it. As with any cryptocurrency, it grows bigger in accordance with the increasing number of big names who invest in it.
For example, one of the biggest investors into Ethereum last year was Grayscale Investments who bought a whopping 756,540 ETH. Additionally, other research has uncovered wallets associated with major players such as JPMorgan Chase, IBM, Microsoft, Amazon, and Walmart. Guess what? All of them are stashing Ethereum!
6Ethereum has the ability to become a world computer
One of the main reasons behind the rapidly growing popularity of Ethereum is its impressive ability to run smart contracts. According to Wikipedia, a smart contract can be defined as a computer program or a transaction protocol intended to automatically execute, control, or document legally relevant events and actions according to the terms of a contract or an agreement.
But how does this work in practice? Well, picture your dream asset. Whether it’s a new home next to the sea, a classic car, or something else. You could purchase these assets via Ethereum’s smart contracts.
Whatever your nationality or wherever you are in the world, the bureaucracy of foreign nations’ systems will be a thing of the past when you’re using a smart contract built on Ethereum and paying with Ethereum too.
In the same way that the internet allows the world to become more interconnected, Ethereum has the potential to improve interconnection between people and businesses all over the globe. If you’re looking for more information on Ethereum and Smart Contracts, we have got you covered with our article covering just how smart contracts work in practice.
5Those who buy Ethereum can fight censorship
Online and offline, censorship is an alarmingly common issue in the world we live in. It can be oppressive countries restricting what their citizens are allowed to see. Or it can be social media networks wiping, modifying, or hiding content that doesn’t fit their views. Whichever type of censorship, another positive aspect of Ethereum is its ability to fight it.
Due to its characteristic decentralized nature, Ethereum has the ability to play a role in keeping the world informed and free of censorship.
This is because governments, agencies, or powerful companies are unable to close down the information stored on the Ethereum blockchain (data, smart contracts, dApps). With Ethereum, the information will stay alive and uncensored for as long as Ethereum stays alive, which is believed to be for a very long time.
4Ethereum 2.0 and Proof-of-Stake
Whether it’s an Apple phone or a Tesla car, all technology needs an upgrade to stay with the times. Ethereum is no exception and will soon undergo a significant change through something called proof of stake. Like all changes and upgrades, this can be risky. But the overwhelming attitude is that this change is much needed to make what is seen as much-needed improvements to Ethereum technology.
Firstly, it’s predicted to enhance transaction production which is vital to create an entirely new industry of other cryptocurrencies that will be built on Ethereum. For example, the current Defi protocols. In addition, this will bring positive results for those who are participating in the staking mechanism.
When Ethereum 2.0 comes along, those who have invested in ETH early enough will be seen as long-term bets on the decentralized web and finance, as well as the viability, scalability, and security of proof-of-stake blockchains to the same degree as proof-of-work blockchains.
When the Ethereum network undergoes updates and changes, it’s possible that some of the Ether coins in the supply could be destroyed. For investors, this would be good news. A more limited supply of Ether will increase the value of each coin and potentially see a significant return for those who invested early enough.
3Ethereum can be much more energy-efficient than Bitcoin
One of the main criticisms of Bitcoin is the amount of energy it consumes during the mining process. “Mining” for Bitcoin is a power-hungry process that involves heavy computer calculations to verify transactions. Research carried out by the Visual Capitalist into BTC mining has revealed that it consumes 1,708% more electricity than Google.
Another study, carried out by Cambridge University, revealed that Bitcoin annually consumes more electricity than the entire country of Argentina. Ethereum, however, is much more energy-efficient.
One of the primary aims of the developers behind Ethereum is for the technology to become more energy-efficient and environmentally friendly. By doing so, this has the ability to create a tremendous appeal to environmentally conscious Crypto investors, possibly giving Ethereum a significant advantage over Bitcoin.
2Ethereum has the ability to create decentralized apps
Another positive aspect of Ethereum is its ability to create decentralized. Basically, the hashes on the Ethereum blockchain are not static. So you can build apps on them that can be used for just about any application that you can think of. From banking apps to storage, there are very few limits to what can be created on the blockchain.
1Ethereum can deal with conflicts and issues of governance more efficiently than Bitcoin
In 2009, a person named Satoshi Nakamoto created the powerhouse cryptocurrency of Bitcoin. Since then, his true identity has remained a well-guarded secret. Personal privacy, protection, and peace, maintaining the anonymity of Nakamoto is likely a no-brainer for the inventor of Bitcoin. It does, however, also create a number of issues.
The anonymity of Nakamoto has been an issue. Especially when it comes to overall policy and consensus regarding the direction Bitcoin should take. This lack of cohesion was one of the main reasons behind the forking of cryptocurrency. In contrast to Bitcoin, the creator behind Ethereum creator has always been public, out in the open, and transparent.
Although he’s now a citizen of Canada, Vitalik Buterin was originally born in the Russian Federation. He published his Ethereum model in 2013 and began to construct it over the following two years. As a visible figurehead behind Ethereum, Buterin’s transparency massively assists Ethereum when it comes to handling conflicts and issues of governance. Much more so than Bitcoin.
So, how do you buy Ethereum?
From a better return on investment than Bitcoin to having the potential to become an environmentally efficient crypto technology, Ethereum is a Crypto asset that you should certainly consider buying into and holding onto for the next five years. However, you should not disregard Bitcoin by any means.
“For investors, BOTH Bitcoin and Ethereum need to be in your portfolio right now. Bitcoin has a chance of remaining the leading crypto asset in the world, while Ethereum has a chance of remaining the leading distributed software development platform in the world.”– Matthew Le Merle, Chairman f Blockchain Coinvestors
If you aim to invest in this promising cryptocurrency after reading our ten reasons to buy and hold Ethereum, you might be wondering just how to do that. Well, there is an abundance of places to buy Ethereum online. But they are all far from equal. Naturally, there is also an abundance of places to sell Ethereum which we covered in our article: How to Sell Ethereum.
In our opinion, one of the best places to buy Ethereum is eToro. This platform offers the ability to invest in stocks, CFDs, forex pairs, and ETFs. Overall, it’s a safe and regulated stockbroker is a simple, easy-to-use trading platform. eToro offers the ability to invest in stocks, CFDs, forex pairs, and ETFs.
Disclaimer – This content is for informational purposes only and is not investment advice. The trading of Bitcoins, alternative cryptocurrencies has potential rewards, and it also has potential risks involved. Trading may not be suitable for all people. Anyone wishing to invest should seek his or her own independent financial or professional advice.