New Delhi: Cryptocurrency has become the new rage among investors and those tracking finance and technology as digital money promises to bring more changes to the way we transact in the near future.
Cryptocurrency unlike convention currency is not managed by a central body like a government. It is based on blockchain technology and is treated mostly as a long-term investment.
Even though Bitcoin is the most popular one, there are more than 5,000 cryptocurrencies in the market.
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While you can use cryptocurrency to make purchases, most people treat it as a long-term investment. However, the decision to invest needs to be taken after appropriate research as it can prove to be risky, considering that cryptocurrencies can be pretty volatile.
Factors that need to be considered include how long has a company been in the business, how has it performed over the years, and is there stability in prices or is it gaining traction. Other points to check are the company's network, speed at which transactions are completed, fees associated, ability to use for regular purchases and bank transfers and investment security.
Top 10 cryptocurrencies in the market:
1. Bitcoin (BTC): Bitcoin has been for over 12 years as it was invented in 2008 and implementation began in 2009. Even with thousands of alternatives, Bitcoin represents 40% of the cryptocurrency market cap. Many businesses have already begun accepting Bitcoin as payment. However, Bitcoin is pretty expensive and its value tends to fluctuate a lot. You may see the price go up or down dramatically during any month.
2. Ethereum (ETH): Ethereum is not only a cryptocurrency but also a network that allows developers to create their own cryptocurrency. While it is behind Bitcoin in value, it continues to be far ahead of other competitors because of its unique technology.
3. Binance Coin: Binance Coin has displayed to be among more stable investment options, posing fewer risks. It is one of the few cryptocurrencies to attain a peak after 2017 and unlike others, it continued a consistent albiet slow trend upward after 2017.
4. Tether (USDT): Tether is touted to be the most stable as compared to other cryptocurrencies because it is said to be tied to the U.S. dollar. For each unit of Tether, there is one dollar in the Federal Reserve Bank, making it a great option for investors wanting to transact with their cryptocurrency.
5. Cardano: The Cardano network takes less energy to complete a transaction as compared to larger networks like Bitcoin - making transactions faster and cheaper. It claims to be more adaptable and more secure with regular updations that are claimed to make it less prone to hacking. However, even with a better network, it is yet to compete with larger cryptocurrencies.
6. Polkadot (DOT): Polkadot developers separated from Ethereum to form their own cryptocurrency with a better network. Polkadot has several “lanes” to complete transactions in. It platform has been designed to reward genuine investors as opposed to people who are just trading to make money fast. However, the cryptocurrency has a short history so it doesn’t have a track record for comparison, making it riskier for potential buyers to invest in.
7. Ripple (XRP): Ripple tries to position itself uniquely by offering international transactions. International money transfers, that can take up to 10 business days in banks, take mere seconds with Ripple. It also boasts of contracts with big banks around the world.
8. Litecoin: Even though Litecoin entered the market at the same time as Bitcoin, it has not taken off in the same way. It commits to completing transactions four times faster than much popular rival. It was the first cryptocurrency to complete a Lightning Network transaction in 2017completing the transaction in less than one second. However, it as volatile in price fluctuation as Bitcoin.
9. Chainlink: While Chainlink's shares are considered affordable to buy, they’re nevertheless priced high enough to not be considered very cheap. It has proven to be increasing in value, and promises room for growth being available for trading on Coinbase, one of the world’s largest cryptocurrency apps.
It still has a relatively lower volume and market cap making it rank low.
10. Stellar (XLM): Stellar’s Lumens is perhaps the PayPal of cryptocurrency networks, serving as a bridge between banks and blockchain networks. It can convert any currency and trade it across channels, making these transactions cheaper and faster than the ones with a traditional bank. However, if another network comes up with a better platform, it can potentially take away Stellar's traffic and affect the company’s stock value.
Before investing in any cryptocurrency, be careful to consider it a long-term investment instead of being a scheme that can bring quick riches. Keep learning about the market and be informed about the latest developments.