In recent years market of cryptocurrencies has skyrocketed, reaching the market capitalization as vast as 1.1 trillion American dollars. That’s happened because more and more people are investing their money into cryptocurrencies. And considering inflation risk and other problems of fiat currencies, alongside people’s desire for anonymity, we can not blame them for that at all.
However, when someone finally decides to enter the crypto market, there are many issues to consider. The main of them is obviously the question of what crypto is the best to buy? And the answer to this question is not easy because currently, there are more than 4.000 cryptocurrencies, from big whales like bitcoin or ethereum to some small crypto you will never hear about. So, in this article, we will go through several different cryptocurrencies, and probably we will be able to say what is the best crypto to purchase.
A Bit of Crypto Theory
Let’s start our journey to the world of decentralized financial systems from some theoretical issues. Firstly, we have to clearly understand what bitcoin and other cryptocurrencies are. To put it simply, a cryptocurrency is digital money that manifests itself in the form of intangible coins, also sometimes referred to as tokens. Moreover, this coin should be produced utilizing complicated cryptography that creates this currency and its transaction through a decentralized cryptocurrency network. And here we come to the second question of what are these decentralized networks?
Broadly speaking, these systems allow the decentralized crypto exchange. In this case, decentralization means that each cryptocurrency was developed by different programmers in different parts of the world. This helps to achieve the main aim of crypto: freedom from government control and thus government manipulation. However, due to the rise in popularity of crypto, governments are finding ways to take crypto under control or even introduce government-backed digital currencies.
Now, when we are familiar with the general principles of existing cryptocurrencies we can say a few words about their different types.
The first type is so-called “Digital gold” the main examples of this type of crypto are bitcoin and litecoin. This type of crypto is called digital gold because, like real gold, there is a limited supply of this currency. Moreover, with time this type of currency only increases its value, so it is great for the investment.
The second type is Digital Cash, as the name implies it can be used for simple financial transactions on the internet, for example buying a product. The producers of digital cash were intended to make their currency less volatile than the original bitcoin, so it would be possible to use it in everyday transactions. However, they did not succeed, and the currency is still volatile.
The third type of cryptocurrency is software platforms like Ethereum. This type of crypto consists not only of currency but also of the whole cryptocurrency network. This model offers far more possibilities for developers to create additions to the network. Which, in turn, allows more flexible uses of a currency.
The next type is digital fiat. In terms of the method of encryption, it could be different but what set it apart from other types of crypto is that its value is tied to something real, for example to the US dollar. So, as a result, such crypto is less volatile but at the same time far more valuable to manipulation from the government because it does not have the main quality of decentralized financial products.
Strange crypto types
The last type about which I want to say a few words about is so-called meme coins, and it is a strange cryptocurrency as dogecoin which is backed not by investors or huge market cap but by the internet users who promote it. Of all the types of cryptocurrencies, these are the most highly volatile, so it is not a good idea to invest in them.
So, What Crypto is Best to Buy Now?
Now that we know the necessary minimum about cryptocurrencies and the market of crypto let’s jump into the discussion about what cryptocurrency is actually worth investing in.
We will start our discussion with a talk about the absolute top cryptocurrency, namely bitcoin. Bitcoin is the only cryptocurrency that was on the news on every TV channel, from the local TV somewhere in Montana to Saturday night live. At one point, almost everyone was talking about bitcoin. And the reason for that is simple, because unlike the price for most cryptocurrencies which is mostly no more than several thousand dollars, bitcoin’s price skyrocketed to more than 60.000 dollars at the maximum, and even now it costs about 30.000. So at one point at the time, it was possible to buy real estate for a few bitcoins.
Moreover, we should not forget that bitcoin is the oldest cryptocurrency in the world, invented a long time ago in 2009. This fact is also adding some readability to the currency. Furthermore, bitcoin has the largest market cap on the market as long as the best and the simplest technologies of cryptocurrency exchanges.
From the technical point of view, bitcoin is built on blockchain technology, therefore you can be pretty sure when it comes to the safety and security of your investments. Also, we should not forget the fact that there is a limited supply of bitcoins which will be 21 million, from which 17 million are already on the market. Therefore the price of bitcoin will inevitably increase in the near future. So, buy bitcoin and you will almost certainly win in the long run.
If Bitcoin is the gold of the world of cryptocurrency investments litecoin can pretend to be the silver. Litecoin was created 10 years ago in 2011 and it in many ways resembles bitcoin, especially in the technical domain. However, litecoin has a faster transaction confirmation time which is a very useful feature. In recent years litecoin has improved its market cap to more than 10 billion dollars. Also, this cryptocurrency is relatively stable so can be a good option for an investment, but the currency does not have a maximum supply so the investment can be rather a short time.
As we have briefly discussed above ethereum is both a blockchain network and a cryptocurrency. Ethereum blockchain is loved by IT developers all around the globe for its decentralized nature and the possibility to conclude a smart contract that enabled the creation of the market of non-fungible tokens (NFTs).
Ethereum was launched in 2015 and since then has become the second-largest player on the market of digital currencies after bitcoin. Today the market cap of ethereum exceeds 130 billion USD. Moreover, many prominent companies are building software that works on the ethereum platform.
From a technical point, both the ethereum network and cryptocurrency are developing gradually. And this is not only because of the smart contracts but also because developers invested a lot of time and energy into the new consensus algorithm that will allow ethereum to work with far less energy consumption and at the same time with the faster processing of transactions. All of this indicates that ethereum will at least hold its position as a second cryptocurrency in the world after bitcoin.
Cardano is a cryptocurrency that in many ways is similar to the ethereum which is not a surprise. Because the leader developer of Cardano was in the ethereum project from the earliest stages. It is being said that the blockchain model of Cardano is more capable than those of ethereum and can process transactions even faster. It is probably true, however, Cardano is a relatively new cryptocurrency so it does not have a large market cap or a big number of investors. Nevertheless, you may ad Cardano to your cryptocurrency portfolio if you believe in its future success because if it would really surpass ethereum your profit would be amazing.
Tether is one of the stablecoins, and this is the first fiat-tied crypto among the widely traded cryptocurrencies. The reason for the creation of such a type of crypto was to attract the people who are afraid of the high volatility of usual cryptocurrencies and therefore they could be attracted by the crypto that depends on something real, in this case on the American dollar. Also, this system makes possible more simple transactions of money from crypto to US dollars and others crypto exchanges as well.
Because this crypto is under indirect influence from the financial institutions of the US government, it is not an example of decentralized finance. However, it has other advantages of crypto, like security and anonymity. As a result of combining the reliability and simplicity of fiat money and the security of crypto, tether has grown to the third-largest cryptocurrency with a market cap of almost 25 billion dollars.
Monacoin is a blockchain-based cryptocurrency that is most popular in Japan but can be as week used in different parts of the world. It is a relatively old crypto because it was launched in 2013 and, over the years, gained some credibility.
Moreover, Monacoin is one of the first cryptocurrencies in the world which was approved by the official institutions to be used in daily transactions, in this case, Monacoin was approved by the Japanese government. As a result, Monacoin can be used for payments either in online and conventional stores, which increases trading volume.
From the technical side, Monacoin is more advanced than bitcoin because its algorithm is much faster and can process transactions 5 times faster than bitcoin does. However, despite all the advantages, Monacoin, due to its geographical isolation has a rather small market cap of 80 million USD.
Polkadot dot or just Polkadot is a relatively new cryptocurrency launched in 2020 but already has a market capitalization of over 12 billion dollars. The secret of such a fast growth hides in the blockchain model of this crypto. This model was designed to make possible interoperability between different blockchains.
Moreover, Polkadot allows different blockchains to be created inside its network using a security system that Polkadot already operates.
If Polkadot is creating the bridge between other cryptocurrencies, chainlink creates a channel between the world of blockchains and smart contracts and the other data on the internet. To achieve this purpose chainlink team of developers came with the idea of decentralized oracles which makes smart contracts dependent on the outside data. This crypto is also relatively new, but market capitalization is already around 10 billion USD.
First of all, when talking about the ripple we have to distinguish between ripple and XRP. Because Ripple is the name of a blockchain network that uses XRP as a native coin. However, most people use these names interchangeably, so will do I.
From the technological point of view, ripple uses a less complicated mining model and, as a result, consumes less energy and makes transactions in a faster way. Also, because of its simplicity, ripple positions itself as a middle man in the market of crypto exchanges allowing users to exchange currencies in a very fast way through its network.
Also, ripple is a relatively old crypto dated back to 2012, and many users rely on it. There is a constant demand on the ripple due to its interchangeability. The market cap of ripple is around 10 billion USD.
Binance coin was created as crypto for cryptocurrency exchange on the Binance exchange which is one of the largest internet platforms for cryptocurrency exchanges based on trading volumes. If you use Binance for trading on this platform, you have lower fees.
At the start of its journey, Binance coin has worked on the Ethereum model but now it has its own blockchain model. In terms of financial indicators, Binance coin is also doing well; its market cap is more than 6 billion.
Another cryptocurrency that is worth to be looked at in detail is the Waves Coin. Like with many other cryptocurrencies, waves coin is referred not only to tokens but also to the blockchain network.
The Waves platform was created as a place for exchanging different cryptocurrencies as well as fiat money and its own token was created to facilitate this process. But now, it even supports smart contracts. Moreover, Waves platform even has a contract with Deloitte, which uses Waves’ blockchain platform, which is a clear sign that big players on the market believe in this model. Waves coin already has a market cap of more than a billion USD.
Consider all Factors
Now, when you a familiar with the main players on the crypto market, starting from the well-known Bitcoin and Ethereum to less known like Japanese Monacoin, you can be better prepared to buy cryptocurrency.
However, there are far more things to consider, even if we are not talking about other digital currencies.
- Firstly, beyond other issues discussed above, you have to check information on the data which you provide to buy crypto because it would be a good idea to give up all your personal data when one of the main points of cryptocurrencies is anonymity.
- Secondly, it would be better to check if it is possible to buy the crypto directly from your bank account because it can simplify the process. For example, many banks nowadays allow clients to buy bitcoin directly, of course with transaction fees.
- Also, consider your motivation for buying crypto because if you just want to invest safely bitcoin and ethereum would be your best choices. But if you want to risk and gain huge revenue check new cryptocurrencies offer on less known cryptocurrencies, preferably on a stage of initial coin offering. This is exactly what persons who earned on bitcoin the most did.
So, in the end, the choice of cryptocurrency to buy is on the investor, and it depends on many factors like
- Current price fluctuations
- The state of the market of financial services
- Stability of fiat currencies
- Amount of personal finance
Here, in this article is just the list of the cryptocurrencies which I would definitely consider buying. Also, when buying a particular cryptocurrency, I would take into account the trading experience. Because if you are the new person in the world of cryptocurrencies, I could suggest you purchase a bitcoin or another top cryptocurrency just to be safe. But after you became an experienced player who knows the audience insights, has a lot of personalized ads, can access information, and knows everything about crypto exchanges you can start being lesser-known crypto and hope for the big revenue.
What is a cryptocurrency platform?
A cryptocurrency platform is a place on the internet where you can buy and sell or exchange your cryptocurrency to another one or to fiat money. Almost all cryptocurrency platforms allow exchanging bitcoin, ethereum, litecoin, and other best cryptocurrencies as well as some minor ones.
Where can I trade bitcoin?
So, if you finally decided to go with the most popular crypto, there would be a question of where you can effectively trade it. In general, it is not a hard task to find a cryptocurrency platform where you can trade bitcoin because almost every one of them doing it.
But each of them has its own advantages and disadvantages, for example, some of them have lower fees while others do it faster or have the best mobile app. So, you can trade bitcoin on many platforms, and as a result, you are able to choose the platform which is most suitable for you.
Should I invest in bitcoin?
Bitcoin is definitely one of the best cryptocurrencies in the world, if not the best one. However, it does not mean that you should immediately take your money and buy some bitcoins. No, it is not that simple. First of all, you need to be aware of all the risks that bitcoin has. For example, that bitcoin is highly volatile, and its price decreased by almost 50% in 2021. Or that it takes up to ten minutes to process one transaction using the bitcoin blockchain model.
Moreover, you have to consider your aims, because if you want to earn big in a short time bitcoin will no longer suit you because it is expected that it will grow gradually but not at the same pace as a few years ago. So, for such an aim, it is better to find another crypto.