Like various physical currencies, digital currencies all have different values and usage. In the past decade alone, over 22,000 different cryptocurrencies have emerged. The success of each varies, sometimes by a wider margin, but at other times, the fine print indicates the subtle differences. Creating a diverse cryptocurrency portfolio can be a profitable option for managing your finances and doing various online activities. But picking which cryptocurrencies to include is best done once you've seen the list below.
1. Bitcoin
Perhaps the most well-known and widely accepted cryptocurrency is Bitcoin. Its history has been exciting, with the value of Bitcoin fluctuating throughout the years. Today, Bitcoin is widely accepted as a payment method. It enables its owners to exchange Bitcoin for goods, services, and global transactions, much like fiat currencies.
All it takes is owning one, or a part, of the 21 million bitcoins currently circulating. As long as you have an internet connection, you can exchange them worldwide. Bitcoin can be converted to fiat currencies, or be used for buying goods and services online. Without a central bank or any bank acting as an intermediary, the flow and exchange of Bitcoin is fast, safe, and widely accepted.
2. Ethereum
Right next to Bitcoin stands Ethereum, offering its owners the option to use the coin in financing, securing their web browsing, online gaming, buying goods and services, and more. Ethereum ranks and for a good reason. Ethereum is the core of the DeFi (Decentralized Finance) system.
Using DeFi and Ethereum, users can borrow, lend, and exchange via trading platforms. Ethereum is thus ideal for the decentralized exchange of digital goods.
The coin is also one of the most widely used in gaming, thanks to the nature of its blockchain. There are around 700 games operating on the blockchain, as it is scalable, flexible, and offers low transaction costs. It’s also widely used as a payment method for online games. According to business2community.com, Ethereum is the second-most popular cryptocurrency after Bitcoin, and it’s accepted at nearly all crypto casinos. Individuals can buy Ethereum at almost any crypto exchange; this easy access no doubt helps its popularity.
Crowdfunding is another practical application of Ethereum as it allows for the creation of decentralized crowdfunding platforms and funding startups without the need for traditional financial institutions.
3. USD coin
USD Coin (USDC) has a consistent value of $1 at all times. This makes it extremely useful for sending money across borders, because you always know how much it will be worth. Because no banks or intermediaries are involved, the recipient can rapidly exchange the USDC for the US dollar or their local currency without concern about price volatility.
Also, any non-U.S. investors who wish to gain a foothold and establish exposure to the US dollar can begin using the USDC in their investment portfolios. USDC is supported across multiple blockchains, where developers can swap it freely between them. Because of USDC’s stability, foreign investors who wish to avoid inflation in their country, and the volatile nature of cryptocurrencies, can opt to save their money by turning them into USDC.
4. Binance Coin
Binance Coin is the official coin for the Binance exchange, where owners can use it for a benefit like paying lower exchange fees when making cryptocurrency transactions. When Binance Coin launched in July 2017, it began with the fair token distribution principle. This meant there were no free allocations or any reserves.
Any new cryptocurrency listed on the Binance launch program can be dealt with with Binance Coins. Binance Coins create a seamless marketplace, making them ideal for various virtual tokens. These virtual tokens are BNB, Binance USD, and Wrapped HBAR, to name a few.
5. Tether
When speaking of cryptocurrencies used for transactions and stabilizations, Tether is a great example. This crypto option is used by traders who make transactions between various cryptocurrencies because Tether transaction fees are only 0.1%. If we consider market capitalization, Tether is the largest stablecoin on the market.
Being a stablecoin means Tether has low volatility and no sudden price changes. Its value is measured against values like gold and the USD, allowing Tether to maintain a predictable valuation. What would be the exact reasons to use Tether? For crypto traders who wish for a steady, reliable, and predictable asset that they can use to convert to cryptocurrency trades and out without facing unpredictable losses, Tether is the answer. Tether protects its owners from sudden changes in prices, allowing for peace of mind, which is rare in the shifting crypto scene.
6. Solana
Solana was made by the Solana Labs in San Francisco, aiming to offer an alternative to Ethereum. Solana functions as a blockchain platform, offering faster, cheaper, and numerous transactions per second, rivaling Ethereum. Solana's main advantage and difference is its proof-of-history (PoH) concept, which is used for verifying orders and historical activities between events.
The PoH concept then encodes this trustless passage of time into a ledger, available for all to see. Unlike Bitcoin and Litecoin’s proof-of-work algorithm, Solana’s PoH is far less resource-heavy and the algorithm in Solana uses timestamps to define the next block in the chain. Solana's token’s direct value is reflected by its use to pay transaction fees and for staking on its Solana network.
Digital currencies are here to stay and maybe even replace our physical currencies eventually. Since their humble beginnings, cryptocurrencies have exploded in popularity, and the number of practical use cases is increasing. More institutions are accepting various cryptocurrencies, where their value and recognition are the primary drive behind their acceptance. Just as our money transactions have moved from physical to mostly cashless societies, so can we expect the rise and development of cryptocurrencies in the upcoming years.
Published: 10/23/2023