The world of decentralized currencies can be baffling, to say the least. Yet it seems like you can’t go anywhere without hearing a news story about people making crazy amounts of money from the likes of Bitcoin or Dogecoin.
You may even feel tempted to start investing in crypto yourself! But before you do, make sure you know about the leading types of cryptocurrency and their pros and cons.
If you are looking to buy, sell or trade in cryptocurrencies, you need to first register yourself with an established Cryptocurrency Exchange. Make sure that you do your research on them first, including finding out more about their fees, services, payments and more. To explore and compare the best cryptocurrency exchanges, click here.
Keep reading for a quick rundown on all things cryptocurrency!
Even if you know little about investing in cryptocurrency, there’s no doubt that you have even a passing familiarity with Bitcoin. That’s because Bitcoin is the world’s leading cryptocurrency, with an estimated net worth of around $160.4 billion.
Buying Bitcoin from credible platforms around the world has become easier in the last few months – for example, those in Singapore, Australia, and New Zealand have the option to buy bitcoin with Independent Reserve in their local currency, whether they are experienced traders or novices looking for a way to generate some extra money. Choosing a good platform will not only help you maximize your investments but also allow you to gain knowledge about the entire crypto ecosystem.
This popularity leads to major strengths and weaknesses, though.
On the plus side, the popularity of Bitcoin means it’s among the most accessible on every major crypto trading platform. Once you find the best crypto exchange platform for your specific needs and level of expertise, you can rest assured that Bitcoin is among the currencies supported.
At the same time, purchasing a single bitcoin can cost new investors thousands of dollars.
While you can invest a few dollars, you’d technically purchase a unit of currency known as Satoshis. Think of these as the equivalent of cents to USD. A few dollars gets you maybe 1/1-millionth of a single bitcoin depending on market strength.
Therefore, it’s simultaneously the most and least accessible cryptocurrency on the market.
It’s easy (and somewhat accurate) to think of Ethereum as nothing more than a second fiddle to Bitcoin. Though it does trail Bitcoin in terms of popularity and value, they’re fundamentally two different kinds of cryptocurrency.
Whereas a Bitcoin transaction is merely a financial exchange, Ethereum uses a form of data recording, known as a ledger, to store information and grow the platform as a whole.
So say you’re buying some Ethereum. A ledger would record your purchase and store that information, allowing you to keep better records of your purchases.
In essence, you’re slowly building a network through each transaction.
Because of its reliance on technological advancement, experts think that demand for Ethereum could skyrocket within the next few years. Some suggestions even state that Ethereum’s value could reach up to $20k by 2025.
Dogecoin is back, with the meme-based token now among the most popular cryptocurrencies on the market thanks to endorsements by celebrity investors like Elon Musk and Snoop Dogg.
And though Dogecoin is fundamentally based on a long-running Internet joke, make no mistake, DOGE’s value is growing quite a bit.
At the same time, it remains the best cryptocurrency for beginners due to its low barrier of entry. A single Dogecoin costs less than a dollar as of publishing.
There is a drawback, however. Dogecoin is more volatile than other forms of cryptocurrency. So while purchasing Dogecoin might be affordable, you could easily lose your investment in a single day.
The Most Popular Types of Cryptocurrency Explained:
We hope you’ve enjoyed this quick glimpse into the three most popular types of cryptocurrency on the market.
If you plan to invest, start with either Dogecoin or Ethereum as their affordability makes investing less risky.
And if you’re interested in learning more about crypto investments, be sure to check out the rest of our finance blog.