The Most Popular Cryptocurrency – And The Ones With The Most Potential
Cryptocurrencies recorded meteoritic growth in 2017. The market capitalization grew to $800 billion USD from $18 billion USD between January and December 2017.
However, this bullish trend did not last long as the dawn of 2018 was marked by a significant fall in the prices of most crypto coins. The first quarter of 2018 was a nightmare of sorts for many crypto investors who simply could not come to terms with the steady fall in prices of most digital coins and the disappointment that comes with the onset of a bear market.
By the close of the third quarter of 2018, the price of most digital coins had picked up, and investors are expecting to start reaping returns on investment (ROI).
It appears that Bitcoin was only a trendsetter. It ushered a wave of cryptocurrencies based on peer2peer network and became the de facto standard for altcoins. As more cryptocurrencies enter the market, new investors might be wondering “What is the best crypto coin to buy?”
This is a comprehensive review of the top digital coins to answer the questions of “What is the most popular cryptocurrency, and which has the most potential?” and “Is now the best time to invest in cryptocurrencies?”
What is a Cryptocurrency?
A cryptocurrency, from a broad perspective, is digital money that takes the form of coins or tokens. Digital currencies are virtual currencies created through advanced encryption to make them more secure compared with conventional coins and notes.
Digital coins were inspired by the need to have an alternative currency that is free from the interference of centralized authorities such as central banks and political administrations. Therefore, they are designed to have decentralized governance spread across the globe. This means that no single authority controls the coins.
Whether it is the introduction of new features or redefining the design of a cryptocurrency, such operations can only be done if the nodes (users) spread in the respective coin’s network are in agreement. In some cases, it is impossible to reach an agreement, resulting in forks such as Bitcoin Gold and Ethereum following the DAO attack in 2016.
Starting in 2009 when Satoshi Nakamoto unveiled the first cryptocurrency, the industry has evolved rather quickly. Now, it is no longer simply about sending value on a peer2peer basis. Rather, cryptocurrencies and associated networks are used in other areas such as gaming, data storage, and medical records management.
The following are the most popular cryptocurrencies that investors should focus on when joining the industry.
Bitcoin was designed by a person or persons who only goes by the name Satoshi Nakamoto. Note that Satoshi has remained anonymous and his actual identity has been the subject of discussions in crypto forums since 2009.
Bitcoin was created as a decentralized digital currency based on blockchain technology. The coin removed the need to use centralized operators such as credit card companies because users can send value on a peer2peer basis.
If you want to send money to another person across the globe, the transaction is completed directly without involving a bank. All that is needed is for the payer and payee to be on the Bitcoin network. Both of you also will need to have Bitcoin wallets such as Ledger Nano S or Trezor.
Historical Performance of Bitcoin
If you ask people about Bitcoin, what comes to mind is perhaps the high value it clocked at the close of 2017. However, it has been a long journey starting from the release of its core code in 2009.
After BTC was released in 2009, the price was about $1 USD. This price grew over the years by 1,873,600% to reach a high of $18,737 USD on December 18, 2018. However, the price corrected with a downward trend, reaching a low of $6,059 USD on August 14, 2018.
The community is optimistic that the value of the coin will take a bullish trend in the remaining part of 2018 and early 2019. Remember that this prediction is only based on speculation.
Therefore, you need to follow the emerging trends and important factors such as looming crypto regulations in different countries across the globe.
The Main Pros and Cons of Bitcoin
The following are the main pros and cons of Bitcoins that demonstrate why it remains the strongest cryptocurrency in the market.
- Bitcoin is the oldest cryptocurrency, and its development community, users, and the investors backing it for growth are also more stable compared with other coins.
- Bitcoin is one of the easiest coins to buy because it is listed on almost all exchanges in the market today.
- Its adoption in the mainstream economy has been impressive. Large companies and corporate entities such as Overstock, Expedia, and Microsoft have all adopted Bitcoin as a method of payment.
- Bitcoin operates as a completely decentralized network. This makes its core code strong and difficult to alter. It is this design that has made it easily withstand stiff competition from other crypto coins such as Ethereum and Ripple on the market today.
The Disadvantages Associated with Bitcoin
- Bitcoin transactions are slow when compared with other market leaders such as Visa. The Bitcoin Network can only process seven transactions every second and confirmation requires about 60 seconds. This is a far cry compared with top competitors such as Visa that can handle over 20,000 transactions every second.
- Bitcoin mining is expensive. Because Bitcoin uses a proof of work (PoW) consensus algorithm, mining is only possible through expensive ASICs mining equipment. The impact is that only the well-to-do in the community can afford high-priced mining equipment.
- The Bitcoin system is not private. Unlike the more advanced anonymity technologies such as ring signatures and stealth addresses used in coins such as Zcash, Bitcoin uses pseudonyms. This makes it easy to follow transactions and unmask the individuals making transactions.
- Because of the Bitcoin’s high value in the market, the cost of sending money on its network is relatively high compared with other newer networks. In September 2018, the average cost of sending value on Bitcoin was $0.60 USD, compared with $0.20 USD on Ethereum and $0.50 USD on Monero.
Ethereum Cryptocurrency (Ether)
Ethereum is one of the most popular cryptocurrency coins in the market because of its unique design. It was designed in 2015 by Vitalik Buterin who wanted to see blockchain use extended beyond the focus of simply sending value on a peer2peer basis.
Therefore, Vitalik designed Ethereum as a blockchain-based platform for creating decentralized applications (DApps) and smart contracts. This makes it a crypto ecosystem with activities such as creating decentralized applications, designing new digital coins, and smart contracts. The native cryptocurrency, Eth, is used for powering the Ethereum ecosystem.
Smart contracts are special agreements designed to self-execute on blockchain networks. They have become the underlying technology powering activities such as elections, purchases, and complex transactions because they are inviolable.
The Historical Performance of Ethereum
Ethereum is considered a popular cryptocurrency because of its diverse applications. The price of Ether grew by about 31,900% from $0.70 USD to $224.90 USD between early August 2015 and early October 2018.
Ethereum reached the highest price in its history on January 14, 2018 when it climbed to $1,377.72 USD. But this peak did not last long as the market took a bearish turn between January 2018 and September 2018.
In 2016, one of the decentralized autonomous organizations (DAO), which was a set of smart contracts for the platform, was attacked and $50 million USD stolen. The attack (commonly known as the DAO child attack) sparked a serious debate on Ethereum that ended in a fork (subdivision) of the Ethereum platform into Ethereum and Ethereum Classic. Ethereum increased DDoS protection and de-bloated the network to prevent further attacks.
Pros of Using Ethereum
- The platform was designed for helping developers build smart contracts. With smart contracts emerging as an important benchmark for new cryptocurrencies, Ethereum has become relevant in the industry.
- As an open source platform, developers find Ethereum preferable because of the easy to use Solidity programming language designed particularly for creating new apps. Whether you want to create an app targeting the blockchain network or gaming, Ethereum is a reliable platform.
- Ethereum has become an important launch pad for ICOs (initial coin offerings) for startups. In 2017 alone, Ethereum supported ICOs worth $5.6 billion USD.
- Ethereum is led by some of the top minds in the blockchain industry including Vitalik Buterin. After helping the blockchain industry diversify to supporting the development of decentralized applications, Ethereum is now moving to the next level of anchoring decentralized exchanges and token creation.
The Main Disadvantages of Ethereum
- Ethereum, even with its advanced focus on growing the blockchain niche, still faces the problem of scalability like Bitcoin. This issue arises from the fact that it uses proof of work (PoS) for verifying transactions.Although Ethereum has indicated that it will shift from a proof of work (PoW) to proof of stake (PoS) consensus algorithm, it is not until such changes are put into effect that the problem of scalability will be addressed. For now, the system continues to suffer from slowness because it can only handle 20 transactions per second.
- Although Ethereum’s focus on its own Solidity language is helpful in promoting platform development, it is also a major issue because experts in other languages such as C++ and Python cannot use it.
- The market has evolved fast, and Ethereum has to face competitors that were inspired by its operations. These competitors include Cardano, EOS, and NEO that are providing the same services offered at Ethereum but with significant improvementThe unique design of Ethereum platform that makes businesses and individuals find value in joining it implies it deserves its position on the most popular cryptocurrency list.
EOS earned a position on the most common cryptocurrency list because of the unique design that makes it a top competitor to Ethereum. The cryptocurrency was launched with an ICO held from June 2017 to June 2018 that raised a record $4 billion USD.
The high amount raised through the ICO is a mark of trust from investors. Now, developers have embarked on developing the platform and introducing features that will solve issues such as scalability and cross-chain interoperability.
The project is the brainchild of Dan Larimer. He is also known for creating the successful Steemit and BitShares platforms. The focus of the platform is enabling developers to design smart contracts and decentralized applications.
The Main Pros Of EOS
- EOS is designed to deliver high scalability that most networks including Ethereum and Bitcoin find difficult to achieve because it employs advanced consensus protocol referred to as the delegated proof of stake (dPoS) and Byzantine Fault Tolerance for transaction verification.
- Unlike the Ethereum platform that allows developers to only use the Solidity programming language, EOS supports many languages such as Python and C++. This implies it is likely to attract more developers and increase its adoption.
- The development team of EOS comprises of people with considerable knowledge of the blockchain niche. For example, Dan Larimer is a visionary leader committed to creating features that will help to take the blockchain industry to the next level.
The Key Cons Of EOS
- While EOS’s focus on supporting decentralized applications is expected to help catapult it to success, its newness in the industry is a key shortcoming. This implies that most proposed features are yet to be tested and will take about five years before EOS can be considered stable.
- Concerns have been raised that EOS’s delegated Proof of Stake (dPoS) consensus protocol is pulling back toward centralization. Since the platform relies on only 21 block producers, the platform could ultimately result in a few big resource provider centers inside the network.
The Final Take
This list of the popular digital coins provides you with insights on the top coins to consider when investing in the cryptocurrency industry. The target should be identifying a coin with a high potential rate of return that can meet your expectations.
If you are a programmer and want to work on apps, go for the platforms that make development easy such as EOS or Ethereum. However, those aiming to invest in digital coins for speculation should focus on analyzing the coins’ prices both in the short and long-term for high returns on investment (ROI).
Note that the price movement of cryptocurrencies is highly volatile. It is therefore important to consider other factors such as looming regulations in different countries and increasing competition. Remember only to invest what you are ready to lose when it comes to cryptocurrencies.