Did you know that the total market capitalization for cryptocurrencies is close to hitting the $1 trillion value? At the beginning of 2017, the total market capitalization for cryptocurrencies was only around $17 billion. A lot has changed since then. In December 2017, a lot of cryptocurrencies made at the market capitalization and the value soared to nearly $600 billion. In short, cryptocurrencies have had a phenomenal 2017.
What’s all the buzz with cryptocurrencies?
You may be wondering what is causing the price of cryptocurrencies to go higher day by day. There are a number of drivers that have increased the growth of virtual currencies exponentially. One is the existence of blockchain. If you don’t know it yet, blockchain is the revolutionary technology which underpins the creation of most cryptocurrencies. It was first introduced as the technology which underpinned Bitcoin.
In short, you can think of the blockchain as a public ledger in which you can find all the transactions done on the infrastructure. This is done without the need of a bank overseeing the transactions. However, blockchain was not built for speed or cost saving. Compared to other payment processors such as Visa and Paypal, the number of transactions that blockchain can support per second pale in comparison. In the future, the market can potentially create advancement is to overcome the shortcomings of the blockchain. However, blockchain is still an innovative creation. In the future, traders will surely see an increased speed and reduce transaction fees on blockchain through the development of the fintech industry.
In addition to the presence of blockchain, the decline in the value of the dollar has also been positive news for the cryptocurrency investors. A lot of people are turning to different investment vehicles such as the traditional investment market, gold, and cryptocurrencies to hedge against the decline in value for the US dollars. As Bitcoin has a set number of coins that can be circulated in the market, this creates a perception of scarcity, which increases the value of the Bitcoin.
In addition to these factors accelerating the growth of the cryptocurrency market, investors will also have an acute fear of missing out. As more people are making money through this market, people don’t want to sit on the sidelines and miss out on all the opportunities to make money. As a result, more uninformed investors are entering the market as well.
What are the other cryptocurrencies you can buy?
As always, the popular choice in the cryptocurrency market is Bitcoin. This is largely because it had a great year and its value has increased by an astounding amount. As it takes up nearly 50% of the cryptocurrency market capitalization, it is considered the world’s most popular cryptocurrency. The level of acceptance for merchants is also much higher with Bitcoin.
Besides being a means for money transfer, blockchain has limitless opportunities for growth. As a result, here are our top three suggestions of cryptocurrencies that may be worth buying over Bitcoin.
Another cryptocurrency that is very popular in the market is Ethereum. There is a reason why investors are looking toward this cryptocurrency. Ethereum’s blockchain is highly popular. In fact, developers are encouraged to build decentralized applications on the platform. After that, they can launch initial coin offerings using the Ethereum blockchain, which makes this platform a great tool for developers.
Besides just developers, other stakeholders who have paid attention to Ethereum include governments, financial service companies, and energy companies. One of the main reasons that Ethereum has managed to stay highly competitive in the market is because they introduced a concept called smart contracts. Smart contracts can facilitate, verify, and enforce a contract.
It’s worth mentioning that Ethereum’s blockchain is very similar to Bitcoin but adding smart contracts adds another level of complexity to the system that appeals to investors. In addition to having smart contracts, the blockchain on Ethereum allows people to store information about applications.
Ethereum has its native cryptocurrency, Ether. The cryptocurrency currently has no clear path despite being used on the platform to cover the transaction fees. It is uncertain whether retailers are going to accept Ether as a method of payment because it’s not as appealing as Bitcoin. However, Ethereum’s push toward their blockchain has been highly successful because it has drawn the attention of major corporations around the world.
Another impressive cryptocurrency in this list is Ripple. It has a native cryptocurrency, which is known as the XRP. Similar to Ethereum and Bitcoin, it has also displayed exponential growth in 2017. However, Ripple has a uniqueness to its appeal to investors because they are focusing on the financial services industry. Specifically, they are trying to improve the cross-border payment facilities that are available within the industry. In fact, there are already banks who are testing out the Ripple infrastructure to see if this can drastically improve the time that is needed for settlement.
A huge success with Ripple was when American Express and Banco Santander announced that they would be partnering with Ripple to test out their blockchain infrastructure. The native cryptocurrency for Ripple plays an essential role in the growth of blockchain. It can be used during cross-border transactions. The progress Ripple has done so far is worth keeping an eye on.
Stellar has a native cryptocurrency, known as XLM. It has done a lot of progress so far and has also enjoyed increases in valuation. Just like Ripple, Stellar is putting its focus on building good financial products or corporations around the globe. However, Stellar is targeting corporate clients with high volumes of cross-border transactions. Stellar wants to improve the cross-border payment transactions by reducing the amount of time needed to complete transactions.
A unique feature of Stellar is that it utilizes something similar to the Ethereum smart contract protocol on its blockchain. It is not the same as Ethereum, but it is an attractive addition for enterprise customers. They recently announced a partnership with IBM for faster cross-border transactions, and it could potentially be Stellar’s big break.
Wrapping it up
With cryptocurrencies, nothing is certain. Even if cryptocurrencies won’t be around in 10 years to come, the one thing that will remain is blockchain technology. This technology has the potential to change how our transactions are done and improve the speed of transactions significantly. This is proven by interested in the blockchain by the three companies’ cryptocurrencies that we have listed in this article. In fact, some people may even say that blockchain holds more value than cryptocurrencies itself.
Whatever the truth is, the cryptocurrency market is a space that we have to watch in 2018. Keep in mind that cryptocurrencies are highly volatile investments. Always be prepared to lose your money when you are getting into the industry. Therefore, as you are searching for new cryptocurrency to invest in, it would do you good to research the latest progress the platform has done and what they have to offer to the investors. Based on the progress that Ethereum, Ripple, and Stellar are creating, it is clear that they have a good chance of making it as viable cryptocurrencies. Just be aware of the cryptocurrencies bubble that may make it very tempting to invest at the moment.