Cryptocurrency is an emerging asset class that has the potential to deliver strong returns. The cryptocurrency market is still in its infancy but has already defied many experts’ predictions about its future. Many experts believe cryptocurrency is a bubble ready to burst, but others see it as the next big thing.
However, it’s essential to understand that cryptocurrency is not just about Bitcoin. There are hundreds of alternative cryptocurrencies (altcoins) that investors can buy and hold for the future. Some altcoins are designed to make payments using blockchain technology, while others have different use cases.
We have written this cryptocurrency guide to help you make an informed decision about your investments. We will cover the basics of the best cryptocurrency to buy them. But first, let’s take a look at why investing in cryptocurrency is so crucial for investors today.
Understanding the Crypto Market
Cryptocurrency is a digital currency that exists as encrypted transactions on a ledger its users maintain. The currency issuer maintains the ledger and issues new cryptocurrency units in exchange for standard fiat currencies.
The algorithm that drives cryptocurrency solves two tasks simultaneously: it keeps track of all transactions made with the currency (via blockchain) and verifies users’ identities by encrypting their personal information.
A blockchain is a digital ledger that records all cryptocurrency transactions. Each transaction represents a “block” of data strung together to form a chain that theoretically makes all cryptocurrency transactions available to all owners. The data of every transaction is protected by encryption.
Cryptocurrencies share common characteristics, including the following:
- Digital form: Cryptocurrency has no physical equivalent like coins or paper money—the currency is code inside computers.
- Peer-to-peer form: A transaction only goes from one person to another online, with no intermediary involved.
- Borderless and frictionless: Cryptocurrency is a currency like gold and other precious metals. Its value does not fluctuate depending on the exchange rate of any particular country’s currency.
- Encrypted: Cryptocurrency transactions are anonymous because the blockchain ledger only shows how much money is sent from one account to another—not who initiated or received the transaction.
- Decentralized: This means there are no banks. Owners of digital wallets must keep their private keys secure, as they will not be able to access the funds in their wallets without them.
- Operate in a zero-trust environment: All cryptocurrencies are built on and verified by a blockchain—a digital ledger maintained by computers that build trust among users through the consensus mechanism.
Evaluation Criteria for Crypto Investments
Technology and Innovation
Cryptocurrencies are built on blockchain technology, a distributed database that maintains a shared record of all transactions without any centralized authority or third party.
A blockchain is essentially an open ledger that enables users to view information and add new records as they happen, making it almost impossible to manipulate past data. The currency is only one use for blockchain technology; other uses include smart contracts, digital identity management, and decentralized autonomous organizations (DAOs).
Adoption and User Base
Cryptocurrencies are still in the early stages of development, but their adoption and user base are growing. There are now more than 1,500 cryptocurrencies listed on CoinMarketCap.com, with a combined market capitalization of $221 billion as of June 2018. This figure had grown steadily since 2013 when just over ten cryptocurrencies were listed on the site with a combined market cap of $1 billion.
Security and Regulation
Security and regulation are both significant issues in the cryptocurrency space. Cryptocurrencies have been hit hard by hackers who have stolen millions of dollars worth of investors’ funds through security flaws in exchanges and other services. And although many people are excited about the potential of blockchain technology to improve global governance and financial systems, there is still a lot of uncertainty surrounding regulations that could affect cryptocurrencies like bitcoin.
Potential for growth and returns
The potential for growth and returns is one of the main reasons investors are attracted to cryptocurrencies. As we mentioned above, many digital currencies are available on the market today. Some have made millions by investing in bitcoin early on, but most investors have not been as lucky. You might want to rethink your strategy if you’re looking for a quick way to make money with bitcoin or other cryptocurrencies.
Top Cryptocurrencies for Future-Ready Investments
A. Bitcoin Cash (BCH)
Bitcoin Cash is a cryptocurrency forked from the original bitcoin blockchain, which was designed to solve some of the problems holding back bitcoin at the time. The main issue with bitcoin was how slow it was to process transactions and how expensive they were becoming, which made it unfeasible for everyday use. Bitcoin Cash is faster and cheaper than its predecessor but has inherited many other features.
B. Ethereum (ETH)
Ethereum is another cryptocurrency that’s become popular due to its rapid growth. The Ethereum blockchain was designed to handle any transaction, from simple payments to smart contracts and even ICOs. It also has the potential for massive scalability, which means it could one day rival Visa regarding how many transactions can be processed per second.
C. Bitcoin (BTC)
Bitcoin has been around since 2009, and an unknown developer released it under the name Satoshi Nakamoto (who may or may not be a person or group of people). The original idea behind Bitcoin was that it would be used as a peer-to-peer digital currency that could be transferred between users without going through any financial institutions. Bitcoin is the original cryptocurrency and is still one of the most popular on the market.
D. Monero (XMR)
Monero is a privacy-focused cryptocurrency that aims to make transactions untraceable. It uses ring signatures and stealth addresses to ensure that no one can trace the flow of funds through the blockchain. Monero is also unique because it doesn’t use the same hashing algorithm as Bitcoin, which means it’s not as susceptible to ASIC miners or GPU farms trying to steal its coins.
E. Cardano (ADA)
Cardano is a decentralized public blockchain and cryptocurrency project focusing on security, scalability, and sustainability. It aims to offer an innovative contract platform for developers to build applications on top of it. Cardano uses the Haskell programming language, an older version of the language used by Ethereum. F. Stellar Lumens (XLM) This cryptocurrency was founded by Jed McCaleb, who also founded Ripple.
The future is here, and it’s not just about crypto.
The world of digital assets is growing exponentially, and the opportunities for businesses and investors alike are changing more than ever. As a result, we’ve put together this guide to help you understand what you need to know about investing in cryptocurrencies–and where to find the best opportunities for yourself.
As with any investment, there are some things to consider before you dive in.
First and foremost, it’s essential to do your research. Ensure you’re familiar with the company and its mission before investing. You should also take the time to look into their competitors and other cryptocurrencies that might be similar or even better than the one you’re considering investing in.
You should also seek professional advice from an expert who can help you understand why they recommend a particular cryptocurrency over others. This will help ensure that you’re making an informed decision about where your money is going!