There are over 4,000 cryptocurrencies in circulation, with an ever-growing range of services. Bitcoin, in particular, has received a lot of attention recently.
In reality, “bitcoin” and “cryptocurrency” have come to represent the same thing, although cryptocurrency marketplaces are flooded with alternatives. Before you begin, as with any investment, it’s critical to know what you’re getting into.
This is especially true for a speculative asset like cryptocurrency.
However, deciding which ones to invest in can be challenging, which is why I’ve compiled a list of the top cryptocurrencies to consider.
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What exactly is a cryptocurrency?
Cryptocurrency is a type of online payment that can be used to buy and sell products and services.
Many businesses have created their currencies, known as tokens. These tokens can be exchanged for the industry’s goods or services.
Consider them to be like arcade tokens or casino chips. To use the good or service, you’ll need to convert actual money to cryptocurrency. Blockchain is the technology that enables cryptocurrency to function.
Blockchain is a decentralized technology that handles and records transactions across many computers. The security of this technology is part of its attractiveness.
Here are the top cryptocurrencies to keep an eye on right now.
With this information, you will learn what you need to know to make a possible investment. You can also be better equipped to spot chances in smaller coins if you understand the fundamental differences between the crypto assets.
Here are the top cryptocurrencies to keep an eye on right now.
With this information, you will learn what you need to know to make a possible investment. You can also be better equipped to spot chances in smaller coins if you understand the fundamental differences between the crypto assets.
Bitcoin Cash ($BCH)
This original cryptocurrency continues to be the most popular.
Bitcoin (BTC) is held in a decentralized network using a digital record known as the blockchain. Anyone can participate in this open-source cryptocurrency.
The digital asset is divisible up to 1/100,000,000th of a Bitcoin, commonly known as a “Satoshi,”. The hard cap is Bitcoin’s most significant feature.
By design, only 21 million Bitcoins can be mined. In a process known as halving, the pace at which new Bitcoin may be mined is cut by half every four years, with the most recent halving occurring in May 2020.
Previous halvings have also resulted in price hikes for Bitcoin. This is why Bitcoin proponents regard it as the ultimate store of value.
Bitcoin works as “digital gold” for securely transferring wealth in a world when almost anything digital can be duplicated and shared.
Bitcoin is already the largest cryptocurrency, with a market capitalization of more than twice the next largest coin.
Bitcoin was the first digital asset to reach a $1 trillion market cap.
Bitcoin is the leading now. However, its proportion of the entire market has begun to drop due to the emergence of rival projects.
Ethereum ($ETH)
While bitcoin is the most popular cryptocurrency among investors, it is far from being the most powerful.
That honor goes to Ethereum, and for a good reason. Its blockchain allows anyone to build on it.
If Bitcoin uses blockchain for money and payments, Ethereum’s blockchain might be used for a broader range of activities, including smart contracts and its native token Ether (ETH). Ethereum, the second most valuable cryptocurrency by market value and volume, has set a new high, boosted by increased institutional interest.
Ethereum is an excellent place to start investing if you’re new to the cryptocurrency sector.
The power of the $ETH token is proportional to the network’s size, implying that the token will only grow in value as more dApps and projects are introduced to the network.
USD Coin
The USD Coin (USDC) bills itself as “the world’s digital currency.” USDC was created by Circle, a worldwide financial corporation that has received funding from Goldman Sachs, Baidu, and IDG Capital, among others. USD Coin’s price is linked to the US dollar, making it far more stable than other cryptocurrencies. This stability makes it more suitable for digital payments. Other cryptocurrencies have a higher potential for growth as investments with more risk of losing value.
Zcash ($ZEC)
Zcash to be a zee privacy alternative to Bitcoin. Zcash claims it offers confidentiality to protect your privacy and financial history. They can confirm the transactions quickly with low transaction fees. It is an open currency that can be spent, sent, and received via mobile phone, computer, or digital wallet. It also provides equal access to everyone.
Zcash was first mined in 2016. Like Bitcoin, it has a limit of 21 million units.
Litecoin (LTC)
Charlie Lee founded Litecoin in 2011. LTC is peer-to-peer money, similar to Bitcoin. It also employs an entirely decentralized network with near-zero transaction fees. Litecoin is also one of the most valuable cryptocurrencies in terms of market capitalization. It varies from Bitcoin because it has faster transaction speeds and more efficient storage.
The more frequently blocks are generated, the more transactions are supported.
This enables a shorter time to confirm a transaction. As a digital currency, Litecoin has been demonstrated. LTC has an 84 million coin hard cap. The economic advantages and faster processing speed of this long-running cryptocurrency have allowed it to continue to rise.
Cardano is a cryptocurrency (ADA)
Cardano is a decentralized blockchain platform that enables secure peer-to-peer transactions by using a native coin.
It was founded in 2015 by Charles Hoskinson, who also co-founded Ethereum.
Cardano provides a “proof-of-stake” protocol, which does not reward excessive energy consumption and is becoming a more common approach for blockchains to validate transactions for security reasons.
With a market cap of $43 billion, Cardano is a transitive cryptocurrency.
What should you know about cryptocurrencies before you invest?
If you’ve recently been interested in cryptocurrency and are considering investing, here are some things you should know before making a purchase.
Don’t risk more than you can afford to lose by investing
Cryptocurrency is a riskier investment than many others. Except for volatility, nothing is certain. In most cases, it is uncontrolled.
There is no FDIC insurance or a buyer of last resort for this item. Cryptocurrency prices fluctuate drastically from minute to minute. The level of danger varies.
Bitcoin, the first cryptocurrency, has existed for more than a decade and is far less likely than most other coins to vanish. It is, however, not without risk. As a result, don’t stake your entire farm, or your entire life savings, on any coin.
Research Well Before you jump into the investment
Spend hours upon hours researching the technology to grasp the value proposition and the hazards before investing a sizeable amount of money in any digital currency. Read everything you can on the subject. Listen to podcasts to learn as much as you can.
Borrow books about digital currency and related disciplines, including cryptography, game theory, and economics, from the library.
Conclusion
Cryptocurrency isn’t just a new financial choice; it’s an entirely different world from traditional equities and bonds.
Even for seasoned traditional investors, mastering the basics takes time because of unfamiliar jargon, evolving technologies, and keeping up with memes and tweets. If your local ordinances are no longer enforcing COVID-19 lockdowns, attend local gatherings. Ask questions and get answers. If you don’t understand something, don’t hesitate to ask for clarification before making any decision