2017 proved to be a great year for cryptocurrencies as there was an increase in market capitalization from $18 billion in January of the year to $800 billion in January of 2018. However, there was a huge correction after that as the prices of nearly all cryptocurrencies crashed and the market capitalization hit a low. Then came the crypto winter and things didn’t really change much until 2020. Despite the coronavirus pandemic, last year proved to be a very good one for the crypto industry and the market capitalization surged once more. In the latest bull-run, institutional investors also joined retail ones, which pushed up the demand for cryptocurrencies.
Now, more and more people are rushing into the space in order to take advantage of the profitable opportunities. But, which cryptocurrencies should you invest in? Some of the best ones that you can consider in 2021 are:
Launched in 2009, Bitcoin was the first cryptocurrency that was introduced by a mysterious individual known as Satoshi Nakamoto. To this day, no one is aware of the identity of Bitcoin’s founder. This digital currency was based on distributed ledger technology called blockchain. The introduction of Bitcoin eliminated the need for centralized intermediaries, such as credit card companies and banks, when electronic payments have to be made.
This means that if people want to make payments in Bitcoin, they can do it directly without having to involve their bank at all. Hence, Bitcoin is both digital and decentralized and its goal is to create an alternative for fiat currencies, such as GBP, USD and JPY. It is the top cryptocurrency in the world by market capitalization and it boasts the biggest community of investors and developers backing it and promoting its growth. Buying Bitcoin is immensely easy, even if you are a beginner, because it is supported by all top wallets and exchanges.
The second most valuable cryptocurrency in the world after Bitcoin is Ethereum. Vitalik Buterin created it back in 2015 and it actually is not just a digital currency because it serves a number of other purposes. It is a blockchain-based platform that can be used for developing smart contracts and decentralized applications. Its native cryptocurrency is known as Ether and it is used for conducting all transactions on the Ethereum blockchain.
To put it simply, if you have an idea of an application or project that uses blockchain technology, there is no need for you to come up with your own blockchain. Instead, you can use Ethereum’s blockchain for developing it. Therefore, it is not surprising that Ethereum is regarded as the most popular platform for building smart contracts, which is the next big thing in the crypto space. The transaction speed of Ethereum is also not more than a few seconds, as opposed to Bitcoin, which takes a lot longer. It is also an excellent platform for conducting Initial Coin Offerings (ICOs) for other projects and a number of them have already been conducted through it.
A very unique crypto, Ripple is focused on resolving problems pertaining to one industry; international payment transfers. Introduced in 2012, Ripple’s aim is to make international transactions both cheap and fast. Ripple comes with a cap of 100 billion and 50 billion of this total is already owned by Ripple Labs, which is the company behind the cryptocurrency. This approach is quite different as compared to the other cryptocurrencies because they don’t have a central entity that holds the majority of the coins.
The biggest benefit that Ripple has to offer is that it speeds up international transactions. Typically, transferring money internationally takes about a week, but with XRP, it will take you just a few seconds. In addition, the fees are also lower when compared to what is charged by financial institutions or when you use other cryptocurrencies. This crypto platform has also been tested out in the real world as it was used by Santander and American Express and also has ties with some prominent financial institutions. However, recently it has been facing some problems because of the case filed against it by the SEC.
Bitcoin Cash (BCH)
As the name indicates, Bitcoin Cash is a fork of the leading crypto, Bitcoin, and it occurred in 2016. When the developer community of the world’s first crypto couldn’t come to an agreement about the changes that were needed in its code, it resulted in a fork referred to as BCH and it is currently one of the top cryptocurrencies in the market. The purpose of creating Bitcoin Cash (BCH) was to solve some of the problems that Bitcoin was facing, especially in regard to transaction fees and scalability.
There are prominent advantages that Bitcoin Cash can offer to people, as its transactions are a lot faster because of the increase in block size. As compared to Bitcoin’s 1 MB, its block size is around 8 MB.
Launched via an Initial Coin Offering (ICO), the EOS token was introduced in June 2017. Its platform was expected to be a direct competitor to NEO and Ethereum. EOS was developed by Dan Larimer, who also founded the crypto exchange Bitshares and Steemit, a blockchain-based blogging site. EOS is said to be a lot more scalable as opposed to Ethereum because it utilizes an advanced mechanism for verifying transactions. As opposed to some of the other cryptocurrencies you will come across, EOS provides support for various languages, which also include C++. Their team is also highly experienced and has a proven track record.
Ethereum’s co-founder, Charles Hoskinson created Cardano in September of 2017. Similar to Ethereum, it was also developed as a platform for smart contracts and decentralized applications. But, like EOS, the difference between Ethereum and Cardano is because of the numerous technological improvements that have been made. Cardano is being regarded as the most advanced generation of blockchain technology, due to which it is the best cryptocurrencies to invest in 2021.
It also has the support of the academic community of global scientists and researchers who have contributed to its blockchain development. It is a lot more scalable than Ethereum and it offers interoperability, which means that it can interact with various cryptocurrencies and their infrastructure rather seamlessly.
An ex-Google employee by the name of Charlie Lee created Litecoin in 2011 and it was built on Bitcoin’s blockchain, with the aim of improving it. Hence, similar to Bitcoin, Litecoin is also a digital currency and doesn’t provide a platform for creating smart contracts. It is considered one of the most popular cryptocurrencies and worth investing in because it has managed to stand the test of time for more than 7 years. The transaction time of Litecoin is also a lot faster than Bitcoin and its transaction fee is also a lot lower, which has worked in its favor.
Along with these cryptocurrencies, you can also consider some others like Stellar (XLM) IOTA and NEO when you are looking for investment options in 2021. These can give you the kind of returns you are looking for in the long run and are a good choice when you want to move into the crypto space.