Upon hearing the term cryptocurrency, Bitcoin is the first thought for many. Bitcoin was created back in 2009 and is viewed today as the original cryptocurrency. Bitcoin paved a new path for a new digital age of decentralized digital currencies and blockchain technology following its creation over a decade ago. The cryptocurrency has expanded immensely over the years, yet Bitcoin remains one of the most popular forms available for investors to invest in. Despite being the top choice for many of Alternative Cryptocurrencies , a rising number of alternative cryptocurrencies are available, which are slowly beginning to dominate the market. With each passing year, these alternative cryptocurrencies are gaining a bigger following, welcoming new investors keen to maximize the low entry costs.
Many look at alternative cryptocurrencies to expand their portfolio. Others are interested in investing in cryptocurrency for the first time. Regardless of your choice, here are a few alternative cryptocurrencies on the market and why they are beginning to rise.
When The Rise Began
In 2008, Satoshi Nakamoto, a group or pseudonymous person, published an outline for Bitcoin. It wasn’t until Bitcoin was released to the public a year later. Following its release, it earned the support of an enthusiastic group of individuals who began mining and exchanging the currency. In 2010, the first public exchanges of Bitcoin started to happen. It helped to capture the attention of more investors.
Following Bitcoin’s release, numerous similar cryptocurrencies began to inundate the market. Even today, there is still an increasing number of alternative cryptocurrency options becoming available. Here is a selection of alternative cryptocurrency options that many consider investing in if they do not want to invest in Bitcoin.
Litecoin is frequently referred to by many as being the silver to Bitcoin’s gold. Despite this comparison, Litecoin is still a prominent cryptocurrency worth considering if you want to invest in something other than Bitcoin.
Although Litecoin and Bitcoin share similarities, they both serve as digital cash and enable cross-border payments. However, one main difference that separates the two is the processing times. Litecoin’s processing times are four times faster than Bitcoin’s. In addition to this, Litecoin is not resource intensive. It means that the transaction fees investors have to pay a far lower than those of Bitcoin.
Ethereum is considered to be the second-largest cryptocurrency on the market after Bitcoin. It is also seen as being the most popular choice amongst investors. Users that invest in Ethereum can access data services and digital money. Ethereum users are also provided with cryptocurrency tokens to use. These tokens are referred to as being Ether (ETH).
Both Ethereum and Bitcoin share a few similarities. One of the main similarities is that investors can use both cryptocurrencies to purchase and sell goods and services.
Tether is the ideal choice for those new to the world of cryptocurrency. It is also suitable for those not comfortable with the wide swings in value when investing in cryptocurrency. Tether is referred to as the stable coin. It keeps regular valuations, especially compared to some more volatile currencies.
The stable coin is supported by numerous traditional currencies, including the dollar, euro, and yen. Tether was designed to help build a bridge between conventional currencies and cryptocurrencies. Although the value of Tether is linked to the value of the U.S. dollar, there is no guarantee at the moment for the opportunity to exchange between real money and Tether coins.
Despite how it might sound, meme coins are rapidly rising in popularity. Inspired by popular social media jokes, meme coins were first created in 2013 when Dogecoin was designed.
Since then, they have become more popular than some more mainstream cryptocurrencies. Two primary meme coins have reached the top ten cryptocurrencies by market value. Dogecoin is the first one, and Shiba Inu is the second.
Shiba Inu (SHIB) is growing a following of loyal and supportive users. It is becoming widely available to invest in. You can even now invest in SHIB in Canada due to the platform Wealthsimple provides. The interest in meme coins continues to grow, with social media influencers and elebrities showing their support for this popular form of cryptocurrency.
Cardano is one of the first peer-reviewed blockchain-based platforms. The primary aim of Cardano is to improve any issues such as interoperability, scalability, and crypto mass adoption. The solid foundations Cardano has enables it to combine a vast selection of tech innovations. Cardano has a two-layer architecture. One layer, called the Cardano Settlement Layer (CSL), handles any payments and transactions made. The second layer, called the Control Layer, is used for any intelligent contracts development.
Many experts believe that Cardano is worth investing in as its future looks promising. The reason being is because of Cardano’s two-layered structure. The cryptocurrency’s unusual design makes it an exciting feature that many potential investors find attractive.
Benefits Of Investing In Cryptocurrency
People’s financial success from investing in cryptocurrency has boosted interest in digital currency. Seeing the positive impact, it could potentially have on their wallets, many investors are beginning to take interest. These are some of the additional benefits available to those that choose to invest in cryptocurrency.
- International Trade Is Easier – By their nature, cryptocurrencies are not subject to any interest rates, exchange rates, or transactional charges imposed by a country. As such, it enables investors to trade internationally with great ease. Using the peer-to-peer mechanism of blockchain technology, investors can conduct transactions without concerns over any fluctuations in currency exchange rates.
- Security Is Strong – Exchanges cannot be reversed after authorizing a cryptocurrency transfer. The reason for this is to reduce the risks of fraud from occurring. It requires a specific agreement from the buyer and seller regarding possible refunds. Alongside this, encryption techniques have been used through the ledger of coin distribution, also known as the blockchain. As a result, all cryptocurrency transactions are safeguarded against fraudulent practices and scams. This approach provides investors with peace of mind that consumers privacy with their transactions.
- More Straightforward Transaction Process – A key advantage of cryptocurrency is how simple the transaction process is. With traditional business dealings, more people are involved in the process than just the buyer and the seller. There are legal representatives, agents and brokers who help their clients. In addition, there is extensive paperwork to be completed, fees, and commissions to be made. With cryptocurrency, the peer-to-peer networking structure reduces all these additional factors. It reduces the chances of confusion over what needs to be paid and by who. There is greater clarity in the transaction process, enabling accountability between the two parties.
Disadvantage Of Investing In Cryptocurrency
The benefits of investing in cryptocurrency do sound tempting to many investors. Along with advantages, there are risks being considered as well. It is essential to know and understand the disadvantages before investing in cryptocurrency.
- High Risk Of Loss – Investing in cryptocurrency is similar to investing in stocks. You are placing your money into something with the hopes of great returns. Whilst it might be a little easier to predict the possible outcome of investing in stocks, there is no absolute guaranteed certainty. No one can claim it if you make any costly mistakes with cryptocurrency. If there is a technical issue with your digital wallet, you cannot protect yourself from losing your cryptocurrency. There is no one to report to if you face any problems and no one to claim back what you have lost.
- Highly Volatile Market – It is tough to predict the value of cryptocurrency. There are no patterns to help, making it challenging to determine when the value will increase or drop. If you choose to invest in cryptocurrency, you need to ensure you are prepared for any situation.
- Potential Risk Of A Cyber Hack – Cryptocurrencies are safe, but the exchanges lack security. When a deal occurs, most will save the users’ wallet information. It is done so to operate their user ID correctly. However, the issue with this is that hackers can steal this information. It then enables them access to a vast selection of accounts. From this, they can move money between these accounts quickly after gaining access. Although most exchanges are more secure than they once were, there is still a chance another hack can happen.
Final Thoughts On Alternative Cryptocurrency
As each year passes, more alternative forms of cryptocurrency will enter the market. It is a common trend that has occurred since the launch of Bitcoin. Some of these new currencies will likely have a surge in interest to begin with, whilst others will slowly build a following. Regardless, potential investors will be overwhelmed with the number of options available.
If you are interested in investing in cryptocurrencies, ensure that you compare each option available. Each has a different structure, and some will have small swings in value than others. Find one that you prefer and feel the most comfortable investing in.
Whether you invest in stocks or cryptocurrency, there is a risk element that you have to take. To potentially earn significant returns on your investments, you have to be willing to take the risk.