What is cryptocurrency?
Cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens, and these can be traded specifically for the good or service that the company provides. Think of them as you would arcade tokens or casino chips. You’ll need to exchange real currency for the cryptocurrency to access the good or service.
Cryptocurrencies work using a technology called blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions. Part of the appeal of this technology is its security.
Best 10 cryptocurrencies by market capitalization
|Binance Coin BNB||$348.45||$53,540,976,610|
|USD Coin USDC||$1.00||$23,929,715,685|
Are cryptocurrencies a good investment?
Cryptocurrencies may go up in value, but many investors see them as mere speculations, not real investments. The reason? Just like real currencies, cryptocurrencies generate no cash flow, so for you to profit, someone has to pay more for the currency than you did.
That’s what’s called “the greater fool” theory of investment. Contrast that to a well-managed business, which increases its value over time by growing the profitability and cash flow of the operation.
This price volatility creates a conundrum. If bitcoins might be worth a lot more in the future, people are less likely to spend and circulate them today, making them less viable as a currency. Why spend a bitcoin when it could be worth three times the value next year?
Why are cryptocurrencies so popular?
Cryptocurrencies appeal to their supporters for a variety of reasons. Here are some of the most popular:
- Supporters see cryptocurrencies such as Bitcoin as the currency of the future and are racing to buy them now, presumably before they become more valuable
- Some supporters like the fact that cryptocurrency removes central banks from managing the money supply, since over time these banks tend to reduce the value of money via inflation
- Other supporters like the technology behind cryptocurrencies, the blockchain, because it’s a decentralized processing and recording system and can be more secure than traditional payment systems
- Some speculators like cryptocurrencies because they’re going up in value and have no interest in the currencies’ long-term acceptance as a way to move money.
Are cryptocurrencies legal?
There’s no question that they’re legal in the United States, though China has essentially banned their use, and ultimately whether they’re legal depends on each individual country. Also be sure to consider how to protect yourself from fraudsters who see cryptocurrencies as an opportunity to bilk investors. As always, buyer beware.
Should you buy cryptocurrency?
Cryptocurrency is an incredibly speculative and volatile buy. Stock trading of established companies is generally less risky than investing in cryptocurrencies such as Bitcoin.
What are the worth of cryptocurrencies?
More than 10,000 different cryptocurrencies are traded publicly, according to CoinMarketCap.com, a market research website.
And cryptocurrencies continue to proliferate, raising money through initial coin offerings, or ICOs. The total value of all cryptocurrencies on May 27, 2021, was more than $1.7 trillion down from April high of $2.2 trillion, according to CoinMarketCap.
The total value of all bitcoins, the most popular digital currency, was pegged at about $735 billion — down from April high of $1.2 trillion.
Best 10 cryptocurrencies
Bitcoin (Bitcoin) is a cryptocurrency that was created in 2008 by an anonymous individual or group of people who went by the name Satoshi Nakamoto. Bitcoin is a decentralized digital currency that can be sent from user to user on the peer-to-peer bitcoin network without the use of intermediaries. It has no central bank or single administrator. Network nodes use cryptography to verify transactions, which are then registered in a public distributed ledger called a blockchain.
If its price rises or falls, there is no denying that bitcoin will continue to dominate the cryptocurrency sector. Traders will benefit from high liquidity regardless of market stability as long as it continues to exist. Although bitcoin is unpredictable, it has a steady upward trend.With a market capitalization of $1.01 trillion, BTC, as it is known by its market ticker, is the most popular cryptocurrency. It was developed as a means of facilitating decentralized transactions as well as a store of value.
Ethereum, is a decentralised software platform that allows Smart Contracts and Decentralized Applications (DApps) to be designed and run without the need for third-party downtime, theft, control, or intervention. Ethereum is a permissionless, non-hierarchical network of computers (nodes) that generate and achieve consensus on an ever-growing sequence of “blocks,” or batches of transactions referred to as the blockchain.The platform’s native cryptocurrency is Ether (ETH).
After Bitcoin, it is the second-largest cryptocurrency in terms of market capitalization. Vitalik Buterin, a programmer, proposed Ethereum in 2013. The network went live on July 30, 2015, with an initial supply of 72 million coins, after being crowdfunded in 2014.
Ethereum is used for decentralised finance, the production and exchange of non-fungible tokens (NFTs), and many Initial Coin Offerings (ICOs). The coin market capitalization is at $195.54 billion on 29 March, 2021.
Tether, previously known as Realcoin, was launched in 2014 and is one of the first cryptocurrencies to be pegged to the US dollar. Tether is a blockchain-based cryptocurrency whose crypto coins are backed by an equal sum of conventional fiat currencies kept in a specified bank account, such as the dollar, euro, or Japanese yen.
The Tether is a stablecoin, a form of cryptocurrency that aims to hold cryptocurrency prices stable, as opposed to the large fluctuations seen in the prices of other common cryptocurrencies including Bitcoin and Ethereum.
Tether was the third-largest cryptocurrency by market capitalization in January 2021, with a total market capitalization of $24.4 billion and a per-token value of $1.00.
Cardano is a cryptocurrency network and open source project with the aim of creating a public blockchain platform for smart contracts. Ada is the internal cryptocurrency of Cardano. Charles Hoskinson, a co-founder of Ethereum and BitShares, started developing the platform in 2015 and released it in 2017.
Charles Hoskinson, one of Ethereum’s five original founding members, was a co-founder of the project. After some disagreements with Ethereum’s course, he left and later assisted in the development of Cardano. As of 9:36 a.m. IST on March 29, ADA, the non-profit digital currency, was trading at $1.19 and had a market cap of $40.4 billion.
Polkadot is a one-of-a-kind proof-of-stake cryptocurrency that aims to provide blockchain interoperability. Its protocol links permissioned and permissionless blockchains, as well as oracles, allowing systems to interact under one roof. Polkadot was created by Gavin Wood, Thiel Fellow Robert Habermeier, and Peter Czaban.
Gavin Wood is a co-founder of the Ethereum Project and was previously the Chief Technology Officer. As of March 2021, Polkadot has a market capitalization of $30.3 billion and one DOT trades for $32.83.
Via the Polkadot relay chain, Polkadot enables an internet where independent blockchain can share information and transactions in a trustless manner. Polkadot aims to make creating and connecting decentralised apps, utilities, and organisations easier.
Ripple is a cryptocurrency and a digital payment network for financial transactions that was first released in 2012. Ripple Labs created XRP as a payment token to be used on its decentralised payment system.
XRP is used with a network of validation nodes rather than a blockchain, as the company started with a blockchain-based system. As of April 2, Ripple XRP has a market capitalization of $26,8 billion and oneXRP trades for $0.5926.
Uniswap is a cryptocurrency exchange protocol that operates on a decentralised basis. The name of the company that created the Uniswap protocol is also Uniswap.
Through the use of smart contracts, the protocol allows for automated transactions between cryptocurrency tokens on the Ethereum blockchain. As of April 2, it has a market capitalization of $$15,2 billion and one UNI trades for $29.21.
Dogecoin is a cryptocurrency that was founded as a joke by software programmers Billy Markus and Jackson Palmer, who wanted to make fun of the rampant cryptocurrency speculation of the time.
On May 9, 2021, SpaceX announced a Dogecoin-funded rideshare journey to the Moon, making it the first cryptocurrency-funded space trip.
9.Binance Coin: BNB
Binance Coin (BNB) is an Ethereum-based ERC20 token launched by the prominent cryptocurrency exchange Binance. You can pay a commission for transactions on the exchange using this coin.
With a total quantity of 200 million tokens, the token was created. Binance intends to utilize 20% of profits each quarter to buy back and burn BNB until 50% of the total BNB supply (100 million) has been burnt, according to the Whitepaper.
10.Bitcoin Cash- BCH
U.S. Dollar Coin, or USDC, is an Ethereum-based stablecoin launched in September, 2018. Its policies, including its technical and financial standards, are managed by a consortium called CENTRE, started by peer-to-peer payment company Circle and crypto exchange Coinbase.
USDC represents fiat, or government money, on the blockchain. It is redeemable on a 1:1 basis for U.S. dollars, issued by regulated financial institutions and backed by fully reserved assets which are audited by accounting firm Grant Thornton LLP every month.
USDC can be easily moved across various cryptocurrency exchanges and platforms quickly which makes it a tool used by traders as well as investors in developing markets looking for a stable blockchain-based asset. CoinDesk also provides a suite of institutional-grade price indexes. Find out more about them here.