January 17, 2021

Cryptheory

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Cryptocurrencies to Invest In

8 min read

Netizens in the departing decade have certainly been acquainted with the term “cryptocurrency” many times. Ever since a pseudo-user, Satoshi Nakamoto, came up with the new horizon-altering idea of moving finance beyond markets and borders in 2009, these digital currencies have only evolved and gotten better. The dice rolled pretty fast, and by 2010, many of the first transactions started taking place.

The first one Satoshi Nakamoto unveiled to the world went by the name Bitcoin or BTC; however, alternatives soon started to show up. Cryptocurrency made it clear that the future of financial institutions will have a very different approach to making financial exchanges and transactions work. Cryptocurrencies are digital currencies that do not fall under any of the existing financial institutions in existence today. They are entirely based on the internet, they work cross-border, and they’re beyond government supervision as of yet, all around the world.

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Data shows how Bitcoin is getting better every moment; hundreds of other coins under development as you read through this article. As an internet user investing in a cryptocurrency might have crossed your mind already. Now would be a very suitable time to rearrange your personal finance and move towards cryptocurrencies, but do we solicit you to empty your existing bank accounts and put every dime into investing in cryptocurrencies? Most certainly not!

Crypto is not very investor-friendly yet – data says. Traditional trade market entities and service providers around the world are not accepting cryptocurrencies yet. Those who do are only a small part. We suggest you keep money in your pocket or trusted financial institutions for now. In the meantime, assess your options in publishing family-like capital.com or exchanges like Binance for investing in cryptocurrencies, or the popular cryptocurrencies in existence today, maybe even purchase “satoshis” to get going.

What is the “Bitcoin” bandwagon?

It all started with bitcoin and eventually moved on to today’s Ethereum, Litecoin, or Binance Coin – the market is full of potentially best cryptocurrencies. When the movement started a decade ago, the goal was to take financial transactions to a whole cashless mode. The money would remain on the internet. The transactions and exchanges are verified through digital equipment and methods – this was the initial hype the internet bandwagon had jumped onto.

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No central bank was involved in the process, and the whole process was supposed to make money work cross-border without the hassle of currency exchanges in-between. Blockchain technology was invented to manage all the information, and a widespread blockchain network came into play across the world.

Much like the concept of mining the earth’s resources and trading them for money, cryptocurrencies are either created or mined on computing equipment like personal computers or even something as simple as a powerful graphics card. Bitcoin cash started the hype back in 2009 and eventually dug the pathway for the open-source peer to peer financial system. As the official bitcoin website states, “a new kind of money.”

Background and overview

In January 2009, Nakamoto initiated the starting block of bitcoin. Fun fact: the name Satoshi Nakamoto is a pseudo-name, and a group of developers work behind this shield. Even to date, their identity remains unknown. The market capitalization or market cap of bitcoins started when a black market company called the Silk Road chose bitcoins as the exclusive payment method. Starting at $0.30 per BTC in 2011, the value quickly rose to $5.27/BTC at year-end.

Through a series of ups and downs, fast forward to December 2020, bitcoins are currently trading ATH $27,000 per bitcoin. Acceptance for bitcoin or cryptocurrencies as a whole had risen to a greater extent. Many businesses, including Microsoft, Wikimedia Foundations, Starbucks, etc., now accept bitcoins as a payment system for some of their services. In contrast, YouTube banned videos based on blockchain, cryptocurrencies, or anything that encouraged the use of cryptocurrency in December 2019.

After ‘careful consideration,’ they admitted to having jumped onto the wrong bandwagon. Despite all these events, cryptocurrency stood strong, and the topic cryptocurrencies to invest in held the top tier of Google search results. As the market cap started to get higher and higher, new cryptocurrencies like ETH, BTC, LTC, XRP, TRN, BNB, etc., were introduced to the list of popular cryptocurrencies. According to many independent surveys, Bitcoin remains the best cryptocurrency in terms of the number of users, total market size, reliability compared to other services, the users’ primary choices, etc. Even companies like JP Morgan are creating their own cryptocurrency. More on that later.

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Blockchain Technology

Before you actually settle on one of the best cryptocurrencies to invest in, a short introduction to blockchain technology should be learned. Vaguely, it is an online ledger for validation of the transactions for cryptocurrencies. It essentially records every transaction and actually makes bitcoin (or some other cryptocurrency) worth something – quite a big amount if we compare it against US dollars.

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Blockchain technology consists of a decentralized database spread across the whole internet, titled the Decentralized Ledger Technology or DLT. There’s no central device; it’s peer-to-peer, much like torrents. Unlike torrents, though, the technologies behind the cryptocurrency transactions are actually very safe. Blockchain technology can be used for storing any database. Due to their nature of encryption and the potential of being equivalent to the worth of actual financial systems, they are most certainly used for cryptocurrencies.

Exchanges vs. over the counter instruments

If you are slightly more finance-savvy than the average users, then you might probably be wondering about the money market and capital market options. The usage of the popular cryptocurrencies for conventional stock exchanges is somewhat non-existent or at least very limited. For traditional currencies, a stock exchange acts as a medium or ‘desk’ for a joint-stock company (or companies) who are willing to raise capital by selling shares to the retail investor accounts or institutional investors; whereas in OTC, there’s no medium but the two parties (buyer and seller) only.

Market news (e.g., rise or fall of stock value) and all transaction events are public. However, in OTC, a buyer and seller act as the ‘desk,’ and the other makes the purchase or sale. In general, cryptocurrency still relies on an OTC model. For a more comprehensive guide to trade cryptocurrencies, you can learn from here as we will be your best friend.

Remember, until the cryptocurrencies are recognized as a legit asset class, things in crypto coins will not be the same as the existing financial system just yet.

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Cryptocurrencies worth considering

As a cryptocurrency beginner, thoroughly research all available options in the market that exist now. Consider the following options –

  • Bitcoin (BTC): Bitcoin is the oldest with the greatest portfolio to consider. In terms of market capitalization, BTC holds the highest value. They are superior by technology, assets, users, more investors, account holders, fast adoption – all metrics you can consider are there. BTC overall has a better long-term user experience rating; capital (.) com says. However, bitcoin protocols are said to leave cookies that might compromise user data and security.
  • Ethereum (ETH): Ethereum was launched in 2015 but ever since, they hold the honor of holding the second-largest position in terms of market capitalization in the market. For ‘generic’ use, ethereum is slightly better.
  • Litecoin (LTC): Made by Charlie Lee in 2011, Litecoin LTC has seen a steady growth curve – close to 8000% in the past year! Fun information – despite not having the largest market cap, Litecoin is more like Bitcoin than Ethereum.
  • Bitcoin Cash (BCH): This cryptocurrency addresses the scalability issue that investors had raised earlier. Being launched in 2017, BCH has grown steadily upwards. User adoption rate seems pretty good for those who had scalability issues with BTC. As a service provider, Bitcoin moved in the right direction. The practical use case of BCH stacks up well against Ethereum and Ripple.
  • Tron (TRX): Justin Sun unveiled Tron in 2017 for digital entertainment content makers mostly. This crypto platform was initially based on Ethereum ETH; however, they moved onto an independent blockchain technology of their own sooner afterward. Tron is a network of content creators on its own, much like the stock video, trending articles, stock photos in Getty images, etc.
  • Ripple (XRP): Ripple or XRP was designed to be a real-time settlement system. Bitcoin and Ripple have a fundamental difference – BTC was designed to hold a monetary value that could be exchanged for money, and Ripple is designed to be more of an exchange medium to make transactions for assets.
  • Cardano (ADA): Cardano is a very new competitor to the market with bigger visions for the years to come. The market capital is low now, so is the exchange value. That actually makes it useful for investing in ADA. If you’re on a tight budget and planning for an experimental move in the cryptocurrency market, consider partnering with ADA through capital (.) com – the risk is very low!
  • Tezos (XTZ): Another slow yet steadily-growing with great potential for 2021 and onwards. If you are considering taking a risk, you should probably keep XTZ as an option.
  • IOTA (MIOTA): Among those with low value yet a considerably high market capital, IOTA is worth considering especially if you think transactions between IoT devices will become progressively popular.
  • ZCash (ZEC): This could be a low-risk low-gain option for investors that have been in the cryptocurrency market for quite a while now. Considering partners, growth curve, market cap, and all, ZEC is not the best option for newbies in the market, but they’re worth considering.
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How do you get started?

Assuming you have never had anything to do with a cryptocurrency before, you can buy cryptocurrency from an exchange. For ETH, smart contracts get you started, and setting up an account does not take long. Typically investors either buy from exchanges or brokers. Be it Bitcoin, Litecoin, Ripple, or Ethereum; you will need an account with the exchange or the brokerage house and proceed through their instructions. Even more, they assist with account functions, contact, support – the whole package.

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What is the best cryptocurrency to invest in?

Decisions, decisions. As you might have figured out by now, the best cryptocurrency is the one that most appropriately serves your purpose. Bitcoin tops the list in every aspect, except its exchange value. If you can safely invest close to $35,000 in a single Bitcoin, then go for it! Capital.com estimates show a possibility of BTC value to rise to $120,000 in 2021 or 2022, which is six times the current value. From an investor’s perspective, BTC is certainly the best cryptocurrency to invest in if you can afford it.

Let’s zoom out a bit and consider a broader perspective. Ethereum is the most used crypto currently, and Litecoin is the one crypto with the highest growth curve. What would prefer a cryptocurrency transaction more than regular currencies? Guess not. If jumping between coins has become your thing, both of these should fall on your radar. Ripple has an almost similar portfolio.

If you are in the content industry and have bigger visions for the future, definitely use Tron. Likewise, for IoT, opt for IOTA.

Finally, the most realistic bit of investing in crypto coins is the ability to afford it and actually study the behavior. The more you observe, the more you get to know. In such a case, Cardano, Tezos, ZCash would certainly be your best options.

The best cryptocurrency to invest? You have the information you need, now make your call.





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