Popular Cryptocurrency, or Which One to Choose for Investment
Bitcoin is no longer trending, read on to know what is the best cryptocurrency to invest in. Before answering this question, it is worth understanding what cryptocurrency is and how people use it.
Cryptocurrency, what is it?
Cryptocurrency is virtual money that does not have a physical expression. The coin is the cryptocurrency unit. A distinctive feature of digital assets is that the coin is protected from fake and duplication. It also has a strict restriction on quantity and emissions. For example, the maximum number of Bitcoin's, first and popular cryptocurrencies, is 21 million coins. This means that they will never create more bitcoins than 21 million.
Another feature is decentralization. Cryptocurrencies do not have an internal or external administrator. Government bodies, banks, tax, and judicial bodies cannot affect the transactions of crypto assets. This is possible because all data about cryptocurrency wallets and transactions are stored in the blockchain.
How can you understand Blockchain?
Blockchain was initially developed to create Bitcoin and drive its functionality based on its architectural structure. It is an innovative database technology, and almost all cryptocurrencies use it. Blockchain is a distributed, decentralized, and digital technology consisting of transaction records called blocks.
This technology distributes identical copies of a database across the network, so it makes it difficult to cheat or hack blockchain systems. Blockchain technology has been developed further, and thus we use it to store records about NFT ownership, computer codes, cryptocurrency transactions and DeFi ‘smart contracts’.
The first, most famous, and expensive cryptocurrency is Bitcoin. We all heard about it, but not everyone dared to invest in Bitcoin when the price was a couple of cents. Over the 12 years of its existence, the coin has grown significantly in price. Those who invested in this cryptocurrency can now sell it on cryptocurrency stocks for more than $30,000.
The question arises. What cryptocurrency should you invest in now? Are there any top cryptocurrency investments other than Bitcoin and Ethereum? Well, let's figure it out!
What kind of cryptocurrency to buy right now: the best options
Against the background of growth in cryptocurrency popularity, every year more and more users are thinking about buying digital assets, but no such luck. Crypto prices of popular cryptocurrencies increased significantly. Let's give some tips for beginners.
"Old Men" crypto
The current situation with Bitcoin is not the best for beginners, but the "old men" can well earn on selling this coin.
Bitcoin is the world’s first decentralized cryptocurrency. This is a type of digital asset that you can send over the bitcoin blockchain using public-key cryptography to record.
It was launched in Jan. 2009, by a group of anonymous programmers. But we all know them well, like Satoshi Nakamoto. The Bitcoin network is a peer-to-peer electronic payment system with an original cryptocurrency called bitcoin.
Bitcoin is digital money, so you can’t physically own it like cash. You own it with the means of private keys and store it in the wallet. It is popular due to its decentralization and because it is not under the control of any banks, financial institutions, laws, or other jurisdiction.
Bitcoins are available on cryptocurrency exchanges where you can buy or sell them. You can store it in a digital wallet. As a matter of fact, it reminds you of a virtual bank account.
More and more companies are accepting this cryptocurrency as payment because it is the largest crypto asset in the world. If you wish to invest in Bitcoin, you can buy and hold it for a while. Wait till the value of this cryptocurrency will significantly increase.
Also, concerns Litecoin (LTC), Ethereum (ETH) with a higher speed of transactions.
Ethereum is the second most popular cryptocurrency. It was first proposed in 2013 by developer Vitalik Buterin. It also works on the basis of a blockchain network, all transactions are verified and recorded. We can use Ether to buy and sell services and goods. Its primary feature is that it allows users to raise funds for their own applications. The cost of its transactions depends on storage requirements, bandwidth usage, and complexity.
Over recent years its price has rapidly risen, now it is $2,308 per coin and lots of people want to have this asset and earn additional profit.
“Newbies” on the market
The cryptocurrency rate is quite unstable. It is impossible to predict its height or fall and other risks. Investments in cryptocurrency are always a risk because the state and political structures do not regulate them, and the rate does not depend on other currencies.
Polkadot (DOT) is on the top 10 most valuable crypto assets. The fundamental benefit of this currency is that we can use it as a bridge between networks. If you build applications on Polkadot they will also work on the Bitcoin and Ethereum systems. It is faster and more scalable than popular cryptocurrencies.
Another promising coin is Dogecoin. This year cryptocurrency has surged about 4,000%. Its price peaked in early May at more than 70 cents. After that, it has pulled back. Its price is below a dollar because of its unlimited capacity to mine more coins and larger circulation. There are 130 billion Dogecoins in circulation already, and each year new blocks are available to mine new coins. This speculation and the faster mining rate of Dogecoin tend to give it a quantifiable advantage over Bitcoin and Ethereum cryptocurrency.
Cardano is the best affordable cryptocurrency investment. In January the price was $0.182, now it is $1.27. The reason for that price hike is the recent system update. Now users can create smart contracts and start working on Apps, and the DeFi sector. This coin also boasts a good development team and cheap transaction fees.
We can continue this cryptocurrency list, but you should understand that there are some issues you had to think about before investing in cryptocurrency.
Be Attentive: Some Tips to Choose
If you want to make your cryptocurrency picking easy, first do some research. Make the analysis cryptocurrency. Browse the rating of all cryptocurrencies based on their capitalization.
For long-term investments, you need to choose cryptocurrencies that are in the ranking, at least in the TOP 30. They are more stable, traded on many stocks, and the scam is minimal. Other less popular coins can also be treated for investment, but it is worth understanding that in addition to the risks of the course falling, there is another risk that the coin can be a scam.
The cryptocurrency's success is based on its community and followers. Look out for crypto assets with a strong community. That shows belief and interest in digital money. Run through YouTube channels and different forums to see what people think about cryptocurrency.
Make a fundamental analysis of the coin. For this, you need to take into account such indicators:
The cost. It is best to buy cryptocurrencies that cost cheaply. So there is a high probability that the course will go up.
Market capitalization - how many coins are available, the figure is not accurate, but the indicator is very important. The rating of all cryptocurrencies is completed on it.
Volatility - how quickly the price of the currency changes. For long-term investments, it is better to choose volatile coins. For example, if you take Tether, then the course is tied to the dollar, it is quite stable and it makes no sense to count on a sharp increase.
To calculate volatility, the market capitalization is to divide by 100. For example, Monoero: 139 987 BTC / 100 = 1399.87 BTC.
We received 1% of the capitalization. Further, compare it with the volume of trading in 24 hours - over 7.0 BTC. It is important that the daily volume is large for 1% of capitalization.
Thus, the coin can be considered volatile. You can also calculate the volatility of any other coin and carry out its accurate analysis. You will know exactly whether to invest in such a cryptocurrency or not.
Lastly, read the white paper and other documents. Every new cryptocurrency brings out a white paper. With its help, you can evaluate the fundamentals of digital assets.
Follow our tips, discover new crypto assets, and you will definitely know which cryptocurrency is better for investment.