Should You (Or Anyone) Buy Ethereum?

Last Updated April 27th 2022
6 Min Read

Find Out Here Why Ethereum Is A top Cryptocurrency That Can Make You Rich. 

Over the past four years, there have been concerns about the environmental sustainability of Proof-of-Work cryptocurrencies such as Bitcoin. This has led to increased uptake of Proof-of-Stake cryptocurrencies. Ethereum is one of those getting all the spotlight at the moment. Ethereum is the second-largest cryptocurrency by market cap, and its native token, Ether, is currently trading at $2958.38. 

While there is a lot of hype around Ethereum’s transition to Proof-of-Stake, the consensus algorithm is only one facet of Ethereum.

Ethereum holds most of the Dapps market and dominates in everything from DeFi to NFTs. When Vitalik Buterin envisioned Ethereum, he wanted it to be a programmable computer, one through which, anyone could cut the middleman out of the process through smart contracts. Ethereum has achieved this role, and despite challenges, is changing the world.  

That said, Ethereum is as volatile as any other cryptocurrency. Besides, Ethereum now has a lot of competitors that are all positioning themselves to dethrone it. This can lead an investor to wonder, is Ethereum a good cryptocurrency to buy today? 

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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

What Exactly Is Ethereum?

Ethereum is a decentralized computer where anyone can build anything without the fear of being censored. The idea is to be a platform for creating reliable automated contracts that can take the middleman out of any process, including banking. 

For context, banks give loans on interest. They do this using depositor’s money and give the depositor a small reward. While the process works, it has many weaknesses. For instance, banks can deny loans and are also known for freezing customer deposits. With Ethereum, the bank is taken out of the equation using a smart contract. This means anyone can borrow, and no one can ever censor those lending with interest. 

So, how exactly does Ethereum work? Ethereum was created in 2015 and used a Proof-of-Work consensus algorithm, just like Bitcoin. However, since 2020, Ethereum has been in the process of transitioning to Proof-of-Stake. Unlike in Bitcoin, where one has to invest in mining equipment, with Ethereum, you buy 32 Ethereum, stake them, and are eligible to validate transactions. 

While most Proof-of-Stake cryptocurrencies tend to become centralized over time, Ethereum is an exception. Ethereum nodes run in the hundreds of thousands and are spread out globally. This makes Ethereum one of the safest cryptocurrencies to buy now due to its low risk of centralized control. 

How Ethereum Is Transforming Value In The Digital Economy

The Ethereum protocol is designed to create and manage value in the digital economy. Through Ethereum smart contracts, it is possible to disrupt any process and turn it into smart contracts.

For instance, Ethereum DeFi projects now dominate the decentralized lending and borrowing market. Today, the Ethereum DeFi ecosystem is the largest in the cryptocurrency market, with a Total Value Locked of $125.7 billion. 

Ethereum is also the dominant blockchain in the NFTs market. NFTs have become a go-to method for creators to monetize their creations, and many are making millions of dollars off it. While Ethereum has higher fees than other platform blockchains, it is still highly preferred for its security and decentralization. 

At the moment, DeFi and NFTs are among the fastest-growing aspects of blockchain technology. Since Ethereum leads in both, it is a safe cryptocurrency to buy and hold long-term

How Ethereum Is Taking Over The Metaverse Space

Even with all its high fees, and scaling issues, Ethereum is still the most dominant blockchain in the fast-growing Metaverse space. Today, all top Metaverse cryptocurrencies, such as Decentraland, Axie Infinity, and Sandbox, run on the Ethereum blockchain. 

Like in DeFi, Ethereum dominates the Metaverse space due to its censorship resistance and decentralization. The Metaverse is projected to be a trillion-dollar market by 2030, and if Ethereum continues to dominate in it, there could be a positive impact on the value of ETH long-term. 

Don't Miss: Ethereum (ETH) Price Prediction

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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Ethereum Pros And Cons

Pros Cons
Strong community High transaction costs
Decentralization Ethereum is highly volatile
No downtime Transactions are slow
Deflationary tokenomics.  

 

Ethereum has one of the strongest communities in the cryptocurrency market. This is a big deal as it plays a role in creating the buzz around Ethereum. Since the cryptocurrency market is still in the growth phase, the Ethereum community is likely to draw in more investors. This is likely to keep Ethereum among the hottest cryptocurrencies to buy, not just in 2022 but for years to come. 

Another of Ethereum’s strengths likely to keep it hot in 2022 is decentralization. Ethereum has no single point of failure, and this is a big deal for two reasons. First, it inspires confidence in Ethereum Dapps because no one can shut them down for partisan reasons. Second, it makes Ethereum a low-risk cryptocurrency in terms of regulatory scrutiny.  

However, the biggest boost to Ethereum as an investment going into the future is its tokenomics. Since the London fork in August 2021, part of the Ether tokens generated as fees are burned. As Ethereum is adopted, the value of ETH stands to go up over time. Given that cryptocurrency adoption is on an exponential growth path, there is no doubt that Ethereum is the next big cryptocurrency to buy and hold long term

That said, Ethereum has its flaws. For instance, Ethereum transaction fees are among the highest in the crypto market. Ethereum also has a much lower throughput compared to most of its competitors. However, Ethereum is in the process of dealing with these issues by transitioning to Proof-of-Stake.

Whether the transition to Proof-of-Stake will help Ethereum slow down the adoption of the competition is a matter of speculation. 

Is Ethereum A Good Buy Today?

Ethereum is a cryptocurrency, and all cryptocurrencies are volatile investments. Price swings of 50% or more in weeks are not uncommon. That said, Ethereum is one of the most adopted and technically advanced platform blockchains in the market today. Even with all the risks, Ethereum is a top cryptocurrency that can gain value long term.

That said, investing is a personal choice. What you choose to invest in should be determined by your risk tolerance and where you are financially. The baseline is that you should only invest money you can afford to lose. It would help if you also aimed to spread your portfolio in Ethereum and other cryptocurrencies.  

Aside from the risks associated with the individual cryptocurrency, where you choose to buy can present an additional layer of risk. It is best only to buy Ethereum at top cryptocurrency exchanges to be on the safe side. 

buy eth

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

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Open an account with eToro, deposit some funds with USD, and finally – buy Ethereum from just $10.

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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

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