Cryptocurrency Investment: Choosing The Right Coins Wisely

Cryptocurrency is a digital currency that is not managed by a central system, such as a government, but by blockchain technology. The most popular one is Bitcoin. As digital money continues to gain traction, more and more options become available.

There are thousands of cryptocurrencies, so choosing which one to invest in can be challenging. The best-known one is Bitcoin, which has the highest liquidity in the space, making it a good choice for beginners. It is also the most stable cryptocurrency and has tremendous momentum, with a market share of over 60%.

Ethereum is the second most popular after Bitcoin and is unique in that it allows developers to create their own cryptocurrency and deploy smart contracts.

Other popular cryptocurrencies include Binance Coin, Cardano, Solana, and Dogecoin.

When deciding which cryptocurrency to invest in, it is important to consider the speed of transactions, security, and the number of people investing.

Bitcoin's value and market cap

Bitcoin is the world's first and most dominant cryptocurrency, currently accounting for 57.3% of the market. Its market cap is estimated to be around $1.2 trillion, with a live price of $63,223.72 as of September 19, 2024.

Bitcoin's value has seen tremendous growth since its creation in 2009. In May 2016, one bitcoin was worth about $500. As of September 10, 2024, a single bitcoin's price was around $56,902, representing an increase of 11,280%.

Bitcoin's value is influenced by its limited supply, mainstream acceptance, and institutional interest. Its total supply is capped at 21 million coins, and it has become increasingly accepted by mainstream investors and businesses. Additionally, institutional investors, such as MicroStrategy and Tesla, have added Bitcoin to their balance sheets, further driving up demand.

Bitcoin's value is also impacted by events such as the Bitcoin halving, where mining rewards are cut in half, and the approval of spot Bitcoin ETFs, which have attracted billions of dollars in assets under management.

Looking forward, Bitcoin's value could be influenced by the development of its smart contract functionality and the continued adoption by businesses and institutional investors.

Ethereum's unique technology

Ethereum is a decentralized blockchain network powered by the Ether token. It enables users to make transactions, earn interest on their holdings through staking, use and store non-fungible tokens (NFTs), trade cryptocurrencies, play games, use social media, and more.

Ethereum is often regarded as the internet's next step, with centralized platforms like Apple's App Store representing Web 2.0, while a decentralized, user-powered network like Ethereum is Web 3.0. This "next-generation web" supports decentralized applications (DApps), decentralized finance (DeFi), and decentralized exchanges (DEXs).

Ethereum was created to address the limitations of Bitcoin. While Bitcoin is primarily a digital currency and a store of value, Ethereum is a decentralized computing network built on blockchain technology. It allows users to build applications that "run" on the blockchain, such as smart contracts and decentralized finance tools.

One of the key features that sets Ethereum apart is its ability to create and run smart contracts. Smart contracts are self-executing contracts that are coded onto the blockchain. These contracts automatically execute when certain conditions are met, eliminating the need for intermediaries such as lawyers.

Another advantage of Ethereum is its decentralized nature, which provides immunity to attacks and ensures that the network remains highly secure. The network is maintained by a large and committed global community, making it the largest ecosystem in blockchain and cryptocurrency.

Additionally, Ethereum offers a wide range of functions beyond being a digital currency. It can process other financial transactions, execute smart contracts, and store data for third-party applications. The network is constantly evolving due to the efforts of a large community of developers who are always looking for new ways to improve it and create new applications.

Ethereum also processes transactions more quickly than Bitcoin. New blocks are validated on the Bitcoin network once every 10 minutes, while Ethereum validates blocks once every 12 seconds.

Furthermore, Ethereum has a large and existing network that has been tested over the years, providing a tried-and-true platform for users. The network has a high level of adoption and is used by many other crypto coins, making it a popular choice for developers and users alike.

In summary, Ethereum's unique technology includes its decentralized nature, smart contract functionality, fast transaction processing, wide range of functions, constant innovation, and large, existing network. These features have made it a popular choice for developers and users seeking to build and utilize decentralized applications and tools.

Binance Coin's volatility

Volatility is a measure of how quickly and how much the price of an asset changes, and it is often used as a measure of the investment risk associated with an asset. In traditional markets, volatility is discussed most frequently in the stock market, but it is also important in other markets such as bonds and foreign exchange.

Cryptocurrencies are far more volatile than most other asset classes due to their digital nature, low level of regulation, and smaller market size. This higher level of volatility has powered mass interest in cryptocurrency investment, as it has allowed some investors to realise large returns over relatively short periods.

Binance Coin (BNB) is a utility cryptocurrency that operates as a payment method for fees associated with trading on the Binance Exchange. It is the third-largest cryptocurrency by market capitalisation as of July 2023. Since its launch in 2017, Binance Coin has expanded past merely facilitating trades on Binance’s exchange platform. Now, it can be used for trading, payment processing, or even booking travel arrangements. It can also be traded or exchanged for other forms of cryptocurrency, such as Ethereum or Bitcoin.

Binance Coin had an impressive price increase of 519,478% from 2017 to late September 2024. In 2017, BNB's price was $0.10, and by late September 2024, its price had risen to around $520.

The Binance Volatility Index (BVOL) measures the expected 30-day implied volatility derived from tradeable crypto option prices. The index operates without relying on any specific model and is crafted to incorporate the entire spectrum of option strikes to accurately capture the market sentiment regarding expected volatility.

Cardano's network

Cardano is a proof-of-stake blockchain platform that aims to be the world's financial operating system. It was co-founded by Charles Hoskinson, one of the five initial founding members of Ethereum, after he left the company due to a disagreement over its direction.

Cardano is unique in that it is the first blockchain platform to be built through peer-reviewed research. It combines pioneering technologies to provide unparalleled security and sustainability to decentralized applications, systems, and societies. Cardano's blockchain is said to be capable of more than Ethereum's and has been dubbed an "Ethereum killer".

The Cardano network is a technical infrastructure that combines Cardano nodes and their interactions in one unified system. It consists of a collection of nodes that communicate with each other to maintain the distributed ledger. These nodes validate blocks, add blocks to the chain, and distribute transactions. The networking layer facilitates the exchange of information, including new blocks diffusion and transaction data, to establish a better data flow.

Cardano's blockchain is the first to implement the Ouroboros protocol, a verifiably secure blockchain protocol that enables decentralization on a sustainable and secure scale. This protocol is the result of extensive research and development, driven by a vision for more secure and transparent global payment systems.

Cardano has a market capitalization of over $10 billion and is currently in its early stages, with a long way to go in terms of DeFi applications. It is one of the best cryptocurrencies to buy now, particularly for long-term investors.

Polygon's layer-two solution

When it comes to investing in cryptocurrency, there are many options to consider. One option that has gained traction is Polygon, formerly known as the Matic Network. Polygon is an Ethereum layer-two solution that aims to address the network's congestion and high transaction fees. Layer two refers to a secondary framework built on top of a blockchain, such as Ethereum, to enhance its functionality and performance.

The benefits of Polygon's layer-two solution are significant. Firstly, it addresses Ethereum's throughput problem, where the network becomes overwhelmed when activity exceeds capacity. This issue has been exacerbated by the rise of decentralised finance (DeFi), resulting in skyrocketing transaction fees. Polygon's solution provides much-needed relief by increasing the network's capacity and reducing fees.

Secondly, Polygon's layer-two solution enables the launch of whole blockchains, similar to what Parity Technologies' Substrate offers. These blockchains inherit the security assumptions of the underlying Ethereum blockchain, providing a secure environment for transactions.

Additionally, Polygon has a modular, flexible framework called Polygon SDK. This software development kit allows for the building and connecting of secured chains, such as Plasma and Optimistic Rollups, as well as standalone chains like Matic POS. The Polygon SDK is designed to accommodate and aggregate various scaling solutions, making it easy for developers to select the best option for their needs.

The Graph, a decentralised protocol for indexing blockchain data, has also expanded its support to include Polygon. This integration will make it easier for developers to build scalable decentralised applications on Polygon, enhancing the user experience for top dApps like Polymarket, Aavegotchi, Decentral Games, and Neon District.

In conclusion, Polygon's layer-two solution offers a comprehensive approach to scaling Ethereum by providing multiple scaling options, addressing throughput issues, enabling the launch of whole blockchains, and improving the developer experience. These factors make Polygon an attractive option for investors looking to capitalise on the growth of the cryptocurrency market.

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