The Best Cryptocurrency Coins: Where To Invest?

With thousands of cryptocurrencies available, choosing the right one to invest in can be challenging. Here are some of the top coins to consider:

- Bitcoin (BTC): The original cryptocurrency, launched in 2009, remains the most popular and valuable. It introduced the concept of blockchain and provides a fully decentralised digital currency.

- Ethereum (ETH): Launched in 2015, Ethereum is the most valuable crypto after Bitcoin. It was one of the first altcoins and its blockchain was the first to introduce smart contracts.

- Binance Coin (BNB): BNB is the native token of the Binance cryptocurrency exchange, one of the world's largest. It offers lower trading fees and other benefits to holders.

- Solana (SOL): A relatively new crypto, launched in 2020, that is designed to compete with Ethereum. It supports smart contracts, dApps and NFTs, and is faster and cheaper than Ethereum.

- Ripple (XRP): A global payments network with a native cryptocurrency, XRP. It offers faster, cheaper and more secure transactions than the traditional system used by banks and financial institutions.

- Toncoin: A blockchain project continuing the development of a platform initially designed by the Telegram messenger team. It has a close integration with Telegram and a strong community.

- Cardano (ADA): A decentralised blockchain platform founded by a co-founder of Ethereum. It uses a unique proof-of-stake consensus mechanism and has a smaller footprint than larger networks like Bitcoin.

- Dogecoin (DOGE): A meme coin and parody of Bitcoin that has become a legitimate investment, backed by high-profile supporters like Elon Musk.

- Avalanche (AVAX): A competitor to Ethereum, aiming to be the fastest and most secure blockchain. It supports dApps and autonomous blockchains, and users can vote on governance issues.

- USD Coin (USDC): A stablecoin pegged to the US dollar, fully backed by cash and short-term US Treasury and Treasury repurchase agreements.

Bitcoin's performance and market cap

Bitcoin was the original cryptocurrency, launching in 2009. Since then, thousands of other cryptos have entered the market, but Bitcoin and Ethereum continue to dominate. As of August 2024, Bitcoin's market cap is $1.2 trillion, up from \$572.26 billion a year ago. This equates to a 105.6% change year-on-year.

Bitcoin's performance has been impressive, with its price skyrocketing as it has become a household name. In May 2016, one bitcoin was worth about $500. As of August 6, 2024, a single bitcoin was valued at around $55,175, representing a growth of 10,935%.

Bitcoin's market dominance is a metric used to measure its relative market share in the overall cryptocurrency market. As of August 2024, Bitcoin's market dominance is between 53.8% and 54.08%. This means that despite the thousands of competitors that have emerged since its launch, Bitcoin remains the most popular and valuable cryptocurrency.

Another factor contributing to Bitcoin's performance is its scarcity. Bitcoin's maximum supply is limited to 21 million coins, and currently, there are 19 million in circulation. To create supply, Bitcoin rewards crypto miners with a set amount of Bitcoin for successfully mining a block. To maintain this process, the rewards given for mining are cut in half almost every four years. This limited supply creates significant potential for a boom in Bitcoin's value under the right circumstances.

In summary, Bitcoin's performance and market cap have been positively influenced by its first-mover advantage, its decentralised and secure nature, and its limited supply. These factors have contributed to its dominance in the cryptocurrency market, making it a popular choice for investors despite the emergence of thousands of alternative coins.

Ethereum's blockchain and smart contracts

Ethereum is both a cryptocurrency and a blockchain platform. Its blockchain was the first to introduce smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller written into lines of code. These contracts run on the Ethereum blockchain, a decentralised and secure platform. The code in the smart contract is automatically executed when specific conditions are met, eliminating the need for intermediaries and increasing the efficiency and security of the transaction.

Ethereum smart contracts are written in Solidity, a computer language comparable to JavaScript, and can be compiled and converted into bytecode. The code defines the circumstances under which the contract will be carried out and the actions that will be executed if those requirements are satisfied. For example, a smart contract can be used to transfer ownership of a digital asset from one party to another when specific criteria are met.

Smart contracts can be used in a variety of industries, including banking, real estate, and supply chain management. They can also be used to create and distribute unique digital assets, facilitate decentralised gaming, and create an insurance policy that pays out automatically.

Ethereum has experienced tremendous growth. From April 2016 to the end of August 2024, its price went from about $11 to around $2,458, increasing by 22,242%.

Binance Coin's volatility and regulatory issues

Binance Coin (BNB) is a cryptocurrency that can be used to trade and pay fees on Binance, one of the largest crypto exchanges in the world. It can also be used for payment processing and travel bookings. Since its launch in 2017, it has expanded beyond its initial purpose, and can now be traded or exchanged for other forms of cryptocurrency, such as Ethereum or Bitcoin.

Binance Coin has experienced significant growth since its launch. In 2017, its price was $0.10, and by August 2024, it had risen to around $476, representing a gain of 475,746%. This volatility has made Binance Coin a risky investment.

In addition to its volatility, Binance Coin has also faced regulatory issues. Binance, the company behind the coin, was sued by the U.S. Securities and Exchange Commission (SEC) in 2023 for violating securities laws. The SEC has been increasingly cracking down on crypto regulations, particularly on exchange tokens and stablecoins. This has caused concern among crypto investors, as overbearing regulations could lead to the loss of stablecoin "safeguards".

Binance has also faced issues with its stablecoin offerings, with irregularities found in the collateral used to back those tokens. The company has admitted to management issues and is reportedly nearing a settlement with U.S. regulators to pay fines for its legal issues.

Cardano's scalability and smart contracts

Cardano is a proof-of-stake blockchain created by Charles Hoskinson, who was one of the five initial founding members of Ethereum. Cardano is unique in its approach to smart contract functionality, emphasising sustainability, scalability and security.

Cardano's smart contracts are self-executing programs that automatically trigger when certain specified conditions are met. This means that all individual processes are automated, such as signing, verifying, and executing contractual terms. This makes the contract execution process much more streamlined, bypassing the need for intermediaries such as banks, lawyers or escrow services.

Cardano's smart contracts are written in Plutus, a Haskell-based programming language specifically designed for the Cardano blockchain. Plutus is a secure and diverse language that allows for composability and developer creativity. However, this also raises the barrier to entry for new developers, as it is quite a niche language.

Cardano's Hydra layer-2 scalability solution boosts the blockchain's throughput, allowing it to manage more transactions and smart contracts via off-chain channels. Cardano also addresses scalability through other mechanisms, such as the Ouroboros Consensus Protocol, Sidechains, and State Channels.

Cardano's proof-of-stake consensus method also addresses the environmental impact of blockchain networks by being energy- and sustainably efficient. This makes Cardano extremely energy-efficient and affordable to use, in contrast to other networks that battle with high gas fees and slow transaction speeds.

Cardano's smart contract adoption is still in its early stages, with projects starting to take shape, especially in gaming, non-fungible tokens (NFTs) and decentralised finance (DeFi). Cardano's prospects for smart contracts appear promising, given its focus on security, scalability and sustainability. However, there are challenges to consider, such as competition from other blockchain platforms, scalability concerns and navigating regulatory uncertainties.

Stablecoins' fiat currency pegs

Stablecoins are a type of cryptocurrency that aims to provide an alternative to the high volatility of popular cryptocurrencies, making them more suitable for everyday transactions. Their value is pegged to that of another currency, commodity, or financial instrument.

Fiat-collateralized stablecoins are one type of stablecoin that maintains a reserve of a fiat currency (or currencies), such as the US dollar, as collateral. The value of the stablecoin is pegged to one or more currencies (most commonly the US dollar, the euro, and the Swiss franc) in a fixed ratio. The amount of the currency used to back the stablecoin should reflect the circulating supply of the stablecoin. Examples of fiat-collateralized stablecoins include Tether (USDT), TrueUSD (TUSD), and USD Coin.

Stablecoins backed by fiat currency are the most common and were the first type of stablecoin on the market. They are also non-interest-bearing, meaning they do not provide interest returns to the holder. While stablecoins aim to provide stability, in practice, they have faced challenges in maintaining their pegged value due to various factors, including a lack of adequate reserves and volatility in the underlying assets.

Stablecoins play a crucial role in the cryptocurrency ecosystem by providing stability and enabling their use in various blockchain-based financial services and everyday transactions. However, it is important for investors to approach stablecoins cautiously due to the risks involved and the need for independent auditors to verify collateral or reserves.

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