Cryptocurrencies are becoming more and more popular with each passing day. These digital currencies are gaining wide acceptance from people across the globe. They are attracting investors who are willing to take calculated risks and expand their portfolios. However, before investing, it is better to know the results and possibilities beforehand. There are thousands of cryptocurrencies that have little value and no potential returns. So, it's important that you make a wise choice when it comes to deciding on the coin to invest in.
Bitcoin came into existence in 2009 when the whole idea of digital currency was new to the world. In fact, Bitcoin, after it came into existence, changed the money game forever. Bitcoin is not just the first but one of the most popular cryptocurrencies we have to date. It works on the principle of blockchain technology that's distributed among a network of computers in large numbers. A per a few reports, Bitcoin's first-mover advantage has put its market capitalisation above $1 trillion. Bitcoin's price skyrocketed in recent times and it became the most popular name among investors.
Stablecoins are a kind of cryptocurrency that ties their value to a more stable asset. Unlike Bitcoins that are highly volatile, stablecoins provide you with stability just like its name suggests. However, despite the stability, their prices don't really fluctuate much. This also means that if you are investing in stablecoins, do not expect much in terms of returns.
Ethereum is the second most popular cryptocurrency after Bitcoin. But something that differentiates it from Bitcoin is the fact that it serves many purposes comparatively. The second most important advantage is that it's more energy efficient.
Ripple focussed solely on financial institutions and made its presence felt in the crypto world. The blockchain for Ripple is unique for its speed and transaction fees. Its network has the ability to get even faster. But, if financial institutions don't welcome blockchain technology, Ripple's valuation could suffer making it least important.
As the crypto market is a recent phenomenon, going by its popularity and awareness quotient, Bitcoin seems to be the safest bet.
Why does Bitcoin seem to be the safest option to invest in?
1) Popularity: Bitcoin does have an upper hand compared to other cryptocurrencies if you talk about its popularity. The value of Bitcoin has continued to rise and break records in the crypto world. Now, since the investors are getting used to dealing with Bitcoin, they are more aware of its usage.
2) Growth: Currently, the market cap of Bitcoin is over $821 billion while its price stands at $51,266. Just about five years ago, you could buy a Bitcoin for about $500. But as of September 30, this year, a single Bitcoin's price was over $43,000. That's the growth we are talking about. Bitcoin occupies over 43 percent of the crypto market cap.
3) Security: The aspect of safety becomes a priority while someone is planning to invest in the digital world. Since Bitcoins came into existence, their network has been quite powerful in protecting vital information. Bitcoin prevents hacking since its network is distributed and the nodes are all over the world. It's pointless to hack anyone server because others will pick up the slack.
Apart from the set of numerous benefits, Bitcoin does have its own drawbacks and risks including its high price. Not many people would be able to afford to buy whole Bitcoins. The rapid price fluctuations of Bitcoins may also make you critical about investing in them.
The crypto world is only blossoming and it's challenging to predict anything much about the future now.