So you’ve heard all the buzz around cryptocurrencies, and would like to start investing, but aren’t quite sure what a cryptocurrency is, what you can do with it or which ones you should look at? Fear not, I’m about to give you the 411 on all that jazz.
Simply put, a cryptocurrency is a digital money. A decentralized (not relying on a central banking authority to process, confirm, and record transactions but on a distributed network) peer-to-peer monetary system based on blockchain technology.
Cryptocurrencies were born with the release of Bitcoin in 2009, almost a decade later, there are more than 3000 cryptocurrencies in circulation and have attracted the attention of large corporations. Cryptocurrencies aren’t just ‘nerd money’ anymore, but a good number of them are duds, basically.
Cryptocurrencies, like stocks or commodities, have a value assigned to them by the general public. With this in mind, one ought to look at digital currencies with a level headed approach. How? Warren-Buffetism my friend. The key is to search for intrinsic value. That is to say; do your homework on a currency, in order to avoid buying into a pyramid scheme dressed up like an ICO(initial coin offering).
Find out how the core programming of a coin works, what the coin does, what does it offer that other coins don’t? What was it’s worth a year ago? What was it worth 3 months ago? What’s it worth now? Why? What’s the internet and media saying about it?Are they talking about it at all?
Never invest because your friend’s, brother’s, girlfriend’s, cousin’s, neighbor swears on his mother’s life that a certain coin is the next Bitcoin. You ought to try to approach crypto like an investor, instead of a fad chaser.
With that said, here is a list of cryptocurrencies that show promise:
The grand-daddy of all Cryptocurrencies. Bitcoin started it all. Created by Satoshi Nakamoto, a figure so mysterious, he could be a person, an organisation or a hyper-advanced artificial intelligence, Bitcoin was released in 2009. Leading the pack with a market cap of $44,763,275,258, which amounts to a 44,3% market share, Bitcoin handily spanks other cryptocurrencies. Many who learn of cryptocurrencies first learn of Bitcoin (It’s the gateway coin). Due to Bitcoin’s massive reputation, other cryptocurrencies are known as ‘altcoins’, alternative coins to Bitcoin.
As of August first, Bitcoin is on SegWit, an upgrade which moves your coins to a second layer network for faster transaction processing and confirmation while keeping block sizes the same.
Claim to fame: Progenitor of crypto currenciess, most accessible.
Price: $2715.52 (at the time of writing)
Ether is the token for Ethereum, a decentralised platform that enables the creation of decentralised applications (Dapps) that run on smart contract technology. In September of 2016 The Ethereum
In September of 2016 The Ethereum network experienced a hard fork (The DAO was attacked, hackers made off with a ton of coins, some wanted the coins back while others took a “oh boohoo! This is blockchain” stance which resulted in thenetwork diverging).
The brainchild of Vitalik Buterin, Ethereum launched in mid-2015 as a “next generation cryptocurrency and decentralised application platform” and currently enjoys a market cap of $20,957,195,400.
Smartcontracts are what Ethereum is all about, the cryptocurrency is a small part of a greater whole. Ethereum enables people to develop and execute contracts without third parties.
Claim to fame: Smart Contract Technology, first credible alternative to Bitcoin, Solidity coding language, Vitalik Buterin.
Current Price: $276.59
3 BitcoinCash (BCH or BCC)
The result of the BIP148 hard fork executed on August first in protest to the Segwit2x proposal. Bitcoin Cash is Bitcoin’s little brother but with an 8MB blocksize and upgraded consensus protocols allowing for growth and scaling.
The Bitcoin Cash Blockchain operates without the controversial Segwit & Segwit2x proposal’s which threatened Bitcoin’s decentralised nature. Bitcoin Cash is surprisingly popular for an upstart cryptocurrency and already commands a $7,734,061,718 marketcap.
Claim to fame: Segwit free, 8MB blocksize, scalability, could dilute Bitcoin’s marketshare
4 Ripple (XRP)
Ripple,is a real-time gross settlement system, currencyexchange, and remittance network (intrinsic value). The cryptocurrency is called ripples. Released in 2012, Ripple currently has a market cap of $6,709,939,191. XRP provides cross border payments (or any kind of payments for that matter) for a fraction of the cost of both Ethereum and Bitcoin combined, provides far superior transaction times over Ethereum and Bitcoin, can handle many times more transactions than Ethereum and Bitcoin, put together (on par with Visa in that regard).
Ripple has been implemented by over 70 banks, many of which have already gone live with the system. Ripple is also capped at 100 billion coins, a finite number that can never be increased, whereas Ethereum releases millions of new coins a year.
Claim to fame: strong focus on banking market, real-time settlement, low transaction costs, immediate real-world application
5 Litecoin (LTC)
Litecoin was launched in October of 2011 by former Google employee, Charles Lee as an alternative to Bitcoin. Overall, Litecoin runs on similar protocols – give or take a few parameters – to Bitcoin proper, it can be mined, used as currency and transacted for goods and services.Lite coin has a market cap of $2,226,422,377.
Claim to fame: alternative to Bitcoin, kinda works like Bitcoin, first to implement Segwit
6 Dash (DASH)
Dash (short for ‘digitalcash’) is a crypto currency developed with emphasis on both privacy and transaction speed. Rebranded from Dark Coin in an attempt to distance it from associations with the dark web, Dash has a market cap of $1,370,671,435.
Dash Developers released a new version called Dash Evolution in a bid to make the cryptocurrency more user-friendly. You can spend Dash at merchants who accepting it, there’s talk of it being intergrated into Apple’s payment systems.
Claim to fame: speedy transactions, anonymization technology.
7 Monero (XMR)
Monero, which went live in April of 2014 focuses on privacy, decentralisation, and scalability. Monero employs technology that obfuscates it’s blockchain, meaning that Monero is secure, private and untraceable.
Monero owes it’s popularity mostly to it’s adoption as a payment system of dark web site Alphabay. Monero which launched as the first spinoff of CryptoNote-based currency Bytecoin, has a $653,752,906 marketcap. Monero is mostly used by individuals wishing to remain incognito on the web.
Claim to fame: Ring Signature Technology, James Bond would use it.
In a game saturated with band-wagon currencies it is imperative that one do as much research as possible in order to avoid getting ripped off. The above mentioned cryptocurrencies were selected for their unique value propositions, and as a result are more likely to bring a decent return in investment.
This is by no means an endorsement of any of the above mentioned cryptocurrencies, as one should always use their own judgement. The above mentioned coins only serve as examples for what one should look for when investing in a digital token.
So to recap, buy into value and not some guy’s ego project, especially if it’s introduced to you on a Wednesday night presentation at your local community hall.