Which cryptocurrencies are good to invest in?

This year, the value of Bitcoin has increased, even exceeding one ounce of gold. There are also new cryptocurrencies on the market, which is even more surprising as it brings the value of cryptocurrencies up to more than a hundred billion. On the other hand, the long-term outlook for cryptocurrencies is somewhat clouded. There are arguments over the lack of progress among its core developers, which makes it less attractive as a long-term investment and as a payment system.

Bitcoin

Still the most popular, Bitcoin is the cryptocurrency that started it all. It is currently the largest market cap of around $41 billion and has been around for the past 8 years. Around the world, Bitcoin is widely used and until now it has not been easy to exploit weaknesses in the way it works. As both a payment system and a store of value, Bitcoin allows users to easily receive and send bitcoins. The blockchain concept is the foundation upon which Bitcoin is based. It is necessary to understand the concept of blockchain to gain insight into what cryptocurrencies are all about.

Put simply, blockchain is a distributed database that stores each network transaction as a piece of data called a “block”. Each user has a copy of the blockchain so that when Alice sends 1 bitcoin to Mark, every person on the network knows it.

Litecoin

One alternative to Bitcoin, Litecoin attempts to solve many of the problems that hold Bitcoin back. It’s not quite as resilient as Ethereum with its value coming mostly from solid user adoption. It’s worth noting that Charlie Lee, a former Google employee, runs Litecoin. He also practices transparency with what he does with Litecoin and is quite active on Twitter.

Litecoin has been Bitcoin’s second-string for quite some time, but things started to change in early 2017. First, Coinbase adopted Litecoin along with Ethereum and Bitcoin. Next, Litecoin solved Bitcoin’s problem by adopting Segregated Witness technology. This gave it the capacity to lower transaction fees and do more. The deciding factor, however, was when Charlie Lee decided to focus solely on Litecoin and even left Coinbase, where he was Director of Engineering, solely for Litecoin. Because of this, the price of Litecoin has increased in the last few months, and its strongest factor is the fact that it could be a real alternative to Bitcoin.

Ethereum

Vitalik Buterin, a superstar developer, designed Ethereum, which can do everything Bitcoin can do. However, its purpose is primarily to be a platform for building decentralized applications. Blockchains are where the differences between them lie. Basically, the Bitcoin blockchain records a type of contract, one that states whether funds have been moved from one digital address to another. However, there is significant expansion with Ethereum as it has a more advanced language script and a more complex, wider range of applications.

Projects began to spring up on top of Ethereum as developers began to notice its better qualities. Through token crowdsale, some have even raised millions of dollars and this is a trend that is still ongoing even today. The fact that you can do wonderful things on the Ethereum platform makes it almost like the Internet itself. This caused the price to skyrocket so that if you bought a hundred dollars worth of Ethereum at the beginning of this year, it would not be valued at nearly $3000.

Monero

Monero aims to solve the problem of anonymous transactions. Even if this currency is considered a method of money laundering, Monero aims to change that. Basically, the difference between Monero and Bitcoin is that Bitcoin has a transparent blockchain with every transaction public and recorded. With Bitcoin, anyone can see how and where money has been moved. However, there is some somewhat imperfect anonymity of Bitcoin. In contrast, Monero has an opaque rather than a transparent transaction method. No one is completely sold on this method, but since some people like privacy for any purpose, Monero is here to stay.

Zcash

Unlike Monero, Zcash also aims to solve the problems that Bitcoin has. The difference is that Monero, instead of being fully transparent, is only partially public in its blockchain style. Zcash also aims to solve the problem of anonymous transactions. After all, no one likes to show how much money they actually spent on Star Wars memorabilia. So the bottom line is that this type of cryptocurrency does have an audience and a demand, although it’s hard to say which privacy-focused cryptocurrency will ultimately rise to the top of the heap.

Bancor

Also known as a “smart token”, Bancor is a new generation cryptocurrency standard that can hold more than one token in reserve. Basically, Bancor tries to facilitate the trading, management and creation of tokens by increasing their level of liquidity and allowing them to have an automated market price. At this point, Bancor has a front-end product that includes a wallet and smart token creation. In the community there are also features such as statistics, profiles and discussions. In short, Bancor’s protocol enables the discovery of an embedded price as well as a liquidity mechanism for smart contract tokens through an innovative reserve mechanism. Through a smart contract, you can immediately liquidate or buy any of the tokens in Bancor’s reserve. With Bancor, you can easily create new cryptocoins. Now who wouldn’t want that?

EOS

Another Ethereum competitor, EOS promises to solve Ethereum’s scaling problem by providing a more robust set of tools for running and creating applications on the platform.

Thesis

An alternative to Ethereum, Tezos can be consensually upgraded without too much effort. This new blockchain is decentralized in the sense that it is self-governing through the establishment of a true digital commonwealth. It facilitates a mathematical technique called formal verification and has features that increase the security of the most financially sensitive smart contract. Definitely a great investment in the months to come.

Verdict

It is incredibly difficult to predict which Bitcoin on the list will become the next superstar. However, user adoption has always been one of the key success factors when it comes to cryptocurrencies. Both Ethereum and Bitcoin have it, and even if there is strong early adopter support for each cryptocurrency on the list, some have yet to prove their staying power. Still, these are the ones to invest in and watch out for in the coming months.