In the 21st century, it has become clear that money is no longer limited to bills, coins, and credit cards. This is also giving rise to speculation that we may one day not need physical currency at all. But in fact, use money that is truly international i.e not owned by any central authority but rather the people. One that exists wholly on the internet. These are referred to as “cryptocurrencies”.
There are many underlying reasons for the rise in the use of cryptocurrency over the last few years. Herds of optimistic investors have turned their eyes towards cryptocurrency due to its decentralized nature, inflation-resistant properties, high liquidity, and easy availability and trade. In fact, there are now a number of trading platforms, such as crypto engines, that use AI to automatically trade on your behalf and generate profits. For further information, visit the website here.
However, there is a plethora of cryptocurrencies, more than 4000, currently in existence. Hence, it may seem daunting to select one that you could put your trust in. Below are 4 of the most popular cryptocurrencies that you could use or add to your investment portfolio.
Bitcoin
Bitcoin is the first digital currency and hence, holds a prominent position in an ecosystem of cryptocurrencies. It is the most popular yet the most volatile as well. Its anonymous creator, Satoshi Nakamoto, designed it in such a way to include only 21 million coins. This helps the cryptocurrency retain its value. Currently, bitcoin is the highest valued cryptocurrency, lying around $60,000 and its value is suspected to go higher.
Litecoin
The science and use of cryptocurrencies may seem nebulous and complex to those unable to understand the underlying technology behind them. However, Litecoin aims to fix this issue. In fact, Litecoin’s founder, Charlie Lee, has expressed that he wanted to create a “lite” version of bitcoin that was much easier and straightforward to use. He wanted to develop a cryptocurrency that would play the role of silver to Bitcoin’s gold.
Lee was able to create what he aimed to achieve in 2011, with Litecoin. He was able to create a digital currency that adopted some of the best features of Bitcoin but also has some twists. Lee successfully captured the essence of the world’s first cryptocurrency but ensured a more convenient use for it. For example, while Bitcoin transactions may take about ten minutes to confirm, litecoin transactions can be completed easily in under five minutes.
Furthermore, even though it takes specialized hardware and powerful raw computing power for users to mine bitcoin, bitcoin is much easier to mine and quicker to move from person to person due to its faster block generation. Litecoin also has much lower system requirements which means that even ordinary PCs can be used for mining this cryptocurrency.
Litecoin is considered to be the least intimidating cryptocurrency for those taking their first steps along the blockchain path. Dealing with this cryptocurrency is quite easy and its wallet can be downloaded from the official website. It is also completely encrypted to prevent any accidental spending or any computer virus that may make it past the security systems in place. Although it doesn’t have the same hype surrounding it as bitcoin does, litecoin is a great alternative for anyone looking to move smaller amounts of money fast.
Ethereum
While Bitcoin may be considered to be the most popular cryptocurrency among the world’s investors, it may not be the most influential. Many crypto fanatics have that title reserved for Ethereum. Founded back in 2014, Ethereum is at the forefront of the Defi (decentralized finance) revolution. This allows it to shift from traditional, centralized financial systems to peer-to-peer finance by means of decentralized technologies that are built on the Ethereum blockchain.
The prime philosophy behind cryptocurrency is the decentralization of currency, which Bitcoin successfully achieves. However, Ethereum manages to go a step further in this regard. The goal of this cryptocurrency is to decentralize the internet by replacing servers with a worldwide system of nodes. This would essentially mean creating one computer for the whole world.
It is a software platform based on blockchain technology where users are allowed to exchange a cryptocurrency called ether. Ethereum has strengthened its position as the second-largest cryptocurrency in terms of market capitalization as well as volume. It managed to reach new all-time highs recently, buoyed by growing institutional interest.
However, the real draw is not the cryptocurrency but the platform itself, which has become wildly popular as a host for many other cryptocurrencies. This means that not only can investors profit from the trade of one of the best cryptocurrencies on the market but also from the wider use of Ethereum itself.
Ripple
First launched in 2012, Ripple is both a cryptocurrency as well as a digital payment network for financial transactions. While most cryptocurrencies may avoid banks, Ripple embraces them wholeheartedly allowing users to make faster, low-cost, on-demand global payments of any size. Traditional cross-border transactions usually require banks to avail the services of an intermediary that delays completion. The digital cryptocurrency, Ripple, offers a much faster and more direct alternative to cross-border transactions.
This cryptocurrency enables many banks to offer new and improved payment channels, and it also simplifies the regular transaction process for consumers around the world.
