Cryptocurrencies are blowing up and there are so many different ones to choose from. If you’re just getting the hang of this whole investing thing, this is probably making your head spin. The good news is, it doesn’t have to be as difficult as it seems!
Cryptocurrencies are blowing up and there are so many different ones to choose from. If you’re just getting the hang of this whole investing thing, this is probably making your head spin. The good news is, it doesn’t have to be as difficult as it seems!
What is Cryptocurrency?
Cryptocurrencies are digital assets designed to work as fast and easily as possible as a medium of exchange. You can think of it as digital cash. They can be used like cash to buy things online or take payments anywhere a cash payment is accepted.
But they can also be used as a means of investment. You can get them as a gift and store them somewhere safely, trade them on an exchange and then spend or invest them.
Cryptocurrencies are decentralized, meaning they don’t exist in physical form. They exist only in cyberspace and are transferred between peers electronically. You can either get them by exchanging traditional currencies or by mining them.
Ethereum
Ethereum is one of the most promising cryptocurrencies around. It’s also the oldest and most established. It was launched back in 2013. Ethereum is a decentralized network that runs smart contracts.
These are computer programs that facilitate, verify, or enforce the negotiation or execution of a contract and can be used to facilitate all kinds of transactions such as transferring wealth, moving assets around, etc. Ethereum is a blockchain-based system.
This means that it uses blockchain technology to handle all the transactions and it also has a decentralized and open-source software system. What makes it different is that it’s programmable. This means that it can be used to run any kind of decentralized application and to customize it to suit individual needs.
Bitcoin
Bitcoin is one of the oldest cryptocurrencies in existence. It was first introduced in 2008 and was the first decentralized blockchain-based network. While the concept may have been around before, it was only in the early 90’s that the internet enabled the financial technologies needed to make the concept a reality.
Bitcoin is a decentralized peer-to-peer currency maintained by a network of computers around the world. You can either get it as a reward for solving complex mathematical problems or purchase it from someone who already keeps it. It can be sent to others or held as an investment.
It’s one of the most liquid assets around and one of the most traded assets. It’s volatile and isn’t tied to one country or any specific government. This means that even if one country tries to ban it, the rest of the world can still use it.
Ripple
Ripple is one of the youngest cryptocurrencies. It was introduced in 2012 and is mainly used for international payments. However, it’s probably best known for its partnership with financial giant, Santander.
Santander has been running a pilot program that uses Ripple to clear and settle payments across Europe. It’s also been adopted by several other banks including Westpac, Axis Bank, and SBI.
Ripple is a decentralized network that can be used to exchange fiat money such as US dollars, euros, etc. with other currencies and tokens. Several financial institutions have started using Ripple such as Santander, Standard Chartered Bank, etc.
NEO
NEO is another one of the most promising cryptocurrencies. It is billed as a “smart asset blockchain.” It’s a blockchain-based network that uses a new technology called “smart contracts.”
You can think of a smart contract as a computer program that automatically executes the terms of a contract. You can use it for all kinds of purposes including transferring assets, sending and receiving payments, issuing assets, etc.
You can also use it for commercial purposes such as creating decentralized applications or “Dapps.” NEO is one of the few cryptocurrencies that’s ICO-friendly.
Cardano
Cardano is the newest cryptocurrency to make our list. It was launched in September 2017. What makes it unique is that it’s a hybrid of a cryptocurrency and a blockchain. A blockchain is a technology used to maintain the integrity of the cryptocurrency.
On the other hand, cryptocurrency is the currency used in the blockchain. Cardano combines the best features of both to create a sophisticated and highly secure platform. It’s a decentralized platform that can be used for all kinds of purposes.
You can send, receive, and trade tokens, make payments, perform contracts, store and manage financial assets and much more. In short, it can be used for all kinds of businesses and transactions.
Final Words
Investing in cryptocurrencies can be exciting and lucrative, but it’s not for the faint of heart. It’s best to approach it with an open mind and a healthy dose of caution. Most cryptocurrencies have a very limited history, are still relatively new, and are extremely volatile.
That means that their value can change significantly in a short period. It’s also important to remember that cryptocurrencies aren’t regulated or controlled by any government or financial institution, so they aren’t protected against inflation or financial crises.
This means they can be risky investments. Before investing any significant amount of money, investors should be sure they understand the risks involved and are willing to accept the potential returns.
