Are you interested in the world of crypto but don’t know where to start? Take a look at our guide to learn the pros and cons of cryptocurrency, along with the top seven cryptocurrencies to invest in.
Most people know the general framework of what cryptocurrency is, but you likely still have a lot of questions.
Bitcoin was the first cryptocurrency to come onto the market, and subsequently, the first one to gain widespread attention. The coin became a household name when investors saw their profits skyrocket in 2017 and 2018, leading to more interest in the cryptocurrency market as a whole.
Traditional, centralized currency hasn’t been doing great in recent years. Some countries are having financial crises, seeing massive inflation, and watching their money become devalued overnight.
Cryptocurrency provides an alternative. These coins offer investment opportunities for some and transactional freedom for others. You no longer have to rely on the ebbs and flows of the national currency market. Instead, you have decentralized options that are free from the market volatility.
The Benefits of Cryptocurrency
There are several benefits to using cryptocurrency over traditional transactional funds. Ahead, we’ll take a look at some of the reasons these coins are gaining so much popularity.
As we’ve said, one of the biggest benefits of cryptocurrency is that it isn’t tied to the traditional financial market. Transactions take place on your specific wallet with a special key. All of your currency will be on your physical wallet, so you don’t have to worry about hackers or any of that so long as you take it off of the exchange.
Blockchain technology – the powering tool behind cryptocurrency – is something that is sure to have an impact on this world, even if these currencies are just a flash in the pan (which they probably aren’t).
The global network keeps track of all exchanges on each coin and manages how much is in circulation. In other words, there’s no centralized organization behind the currency that dictates what each coin is worth. The decentralization opens the door to a lot of opportunity for growth beyond what the traditional market allows for.
Low Fees on Transactions
Cryptocurrency presents a promising opportunity to send and receive money from different parts of the world. Sending regular currency can take a long time and often faces high fees. Cryptocurrency still requires some third-party websites or databases in most cases, but still offer faster transactions with lower fees.
Most people will use a crypto exchange to send and receive these coins. These exchanges will charge you fees, but not nearly as high as the traditional ways you can send money. These transactions also happen much faster, which is an added benefit to those who want their money as soon as possible.
Cryptocurrency, by nature, is a much more secure way to buy and sell things than traditional financial transactions. Buying something from the store with a credit card, for instance, opens the door to identity theft where crypto exchanges do not.
Using your card at a store allows the store access to your account. They take what they need, but the connection remains after you’ve paid. This means that identity thieves can gain access to your information and account, which adds risk to every transaction.
Alternatively, you send money with cryptocurrency instead of having it taken from you. You will send the required amount for what you want to buy, and no one has access to your funds but you.
This transaction method – while it does carry some risk – is far safer than traditional transactions are. This is one of the primary reasons, so many people prefer using cryptocurrency over traditional currency.
Most cryptocurrencies have the benefits of both cash and credit interactions. You don’t need to meet someone in person to buy your goods as you would with cash, but you don’t have to send your information like you would with a credit card transaction or wire transfer.
Privacy might not mean much to everyone, but some users will enjoy the idea of keeping themselves insulated from their transactions. Some coins will even purposefully obscure who sends and receives the funds with each transaction.
Most cryptocurrencies have a fixed supply, which adds value to the currency. Part of the problem with centralized banks is that they control the value of the money they print.
The more money that’s in circulation, the less valuable it is. Gold or silver, on the other hand, have fixed supply. This means that their value will always have the floor. Cryptocurrency like Bitcoin has the same failsafe.
There can only ever be up to 21 million Bitcoin in circulation. It’s impossible to flood the market and devalue the coin. After all, if everyone has a bunch of money, it won’t be worth anything. Your investment will be relatively safe, here, just like it is with the precious metals.
Top 7 Best Cryptocurrencies To Invest In
Now it’s time to take a look at some of the better cryptocurrencies to invest in. Not all coins are created equal, and some carry far more risk than others. Ahead, we’ll give you our top seven so you can look into them further.
Bitcoin tops our list for several reasons. For one, it’s the most popular cryptocurrency out there. You’ve undoubtedly heard of Bitcoin, even if you haven’t heard of any other kind of cryptocurrency in existence. In fact, some of you likely found this article solely from your curiosity of Bitcoin.
Since this is the case, Bitcoin is one of the better cryptocurrencies to invest in. It has the brightest future ahead of it and has the chance to become a legitimate standard for non-government currency.
The only downside with Bitcoin is the cost. We saw the Bitcoin gold rush happen not too long ago. This was when internet investors became millionaires overnight, and everyone was scrambling to get a piece of this new currency.
The price fell after a while but remains rather high. Getting into the Bitcoin market is going to be harder and more expensive than many of the others we listed below, but it’s still one of the better cryptocurrency investments you can make.
Ethereum isn’t a household name like Bitcoin is, but it remains one of the best cryptocurrencies to invest in when looking towards the future. You might have heard people refer to this currency by its shorthand name: Ether.
Either way, Ethereum presents one of the better ways to diversify your cryptocurrency portfolio. Those who jumped onto the Bitcoin train will need a way to spread out their investments and hedge their bets. For many, that opportunity comes in the form of Ether.
Ether is one of the more secure cryptocurrencies on the market today. It’s going to be quite a bit more expensive than some of the others we included on this list, but it’s also more likely to make you a profit in the long term.
Bitcoin Cash – not to be confused with regular Bitcoin – is another excellent investment in the cryptocurrency space. This coin has performed better than some of the others we’ve reviewed in a constantly fluctuating market.
In fact, Bitcoin Cash is one of the coins that have the opportunity to become more than just an investment. Like Bitcoin, this currency is s frontrunner to become a standard transactional currency in the future.
The greater blocksize limit will allow retailers to make larger purchases with this coin, which can open the door for more opportunities to use it in a practical setting. For that reason, you might want to take a look at investing in Bitcoin Cash – even if you’re just looking to diversify your crypto investments.
Dash is an up-and-coming cryptocurrency that is taking a slightly different approach than some of the other big-name coins out there. The creators intended for people to use this coin to buy things, not only as an investment opportunity.
This change to Dash comes with some practical benefits that ensure this coin will have a future where some of the others might fail.
One of the big problems with Bitcoin was how long the transactions take to process. With Dash, the payments are nearly instantaneous, which means they have more practical use than some of the other big-name currencies. If retailers start accepting cryptocurrency, Dash will be near the top of the list.
Those who are well-versed in the crypto market likely know the name Monero (XMR). This coin took a hit when the cryptocurrency bubble burst earlier in 2018 and continues to be far lower than its peak as of this writing.
Monero is similar to Dash in its practicality but might have scared some investors away when the price dropped. Still, a lower cost of entry means you have more of an opportunity to invest heavily without taking on too much risk.
Of course, any investment of this type has some risk. Just because one coin has taken a bit of a hit doesn’t mean it’s useless. You might even be able to get a better deal on Monero than Dash or some other coins if it continues to trend downward. The real trick is getting in at the right time.
Binance Coin has been growing in popularity since Bitcoin became a household name. It’s one of the better altcoins out there and provides a decent outlook that some of the other coins don’t have.
The crypto exchange website Binance has fueled the growth of this coin. This site lets users send and convert cryptocurrency, and the popularity of the site has granted credence to the coin itself.
Bitcoin got a lot of coverage when its growth exploded, but Binance coin is giving investors a reason to look its way over Bitcoin in recent months. Investors have seen the coin triple in value this year, which presents a fantastic opportunity to diversify your crypto investment.
Zcash is one of our value picks for cryptocurrency since you can get it for far cheaper than most of the other coins we listed. The main selling point behind this coin is privacy. You won’t see the buyer or seller when making transactions, which will be a massive benefit to some users.
Of course, this privacy lends itself to some unsavory transactions. This may or may not matter to you, but the price is difficult to pass up. Privacy is extremely important to some, and that means that coins like Zcash will always have a place in the market.
Is Cryptocurrency All Good?
We’ve mostly focused on the reasons why you should invest in cryptocurrency. There’s a downside to everything, though, and we’d be doing you a disservice if we painted a pretty picture without showing you what could go wrong.
Cryptocurrencies are failing left and right. It’s difficult to tell which coins will stick around and which ones will fall to the wayside. You might see a cheap coin and think it presents an awesome investment opportunity, only to find that the coin becomes obsolete in a matter of months.
The hype surrounding crypto also makes the industry ripe for scams. Some companies or individuals come out with coins as a money-grab. They take the money you spend on their fraudulent cion and split before anyone catches on.
The deregulated nature of cryptocurrency is part of the reason it’s so popular. A lot of western countries have no regulations regarding crypto, but that may change in the future.
As the space grows in popularity and further competes with traditional currency, governments might step in and regulate it nearly out of existence.
The keys are another double-edged sword of the crypto world. You will be the only one with your key, and losing it means losing access to all of your funds.
Forgetting the password to your bank account isn’t a big deal. You can click a couple of buttons, answer a couple of questions and you’ll be back in business. Crypto doesn’t work this way, and forgetting your password could mean the complete loss of your investment.