Cryptocurrencies have become increasingly popular over the last few years. What are cryptocurrencies? Well, for those who are unfamiliar with the term, it is a digital form of currency. One type of cryptocurrency is Bitcoin, which has become quite popular and has been steadily increasing in value over the past few months.
What makes cryptocurrencies so appealing to people?
The underlying technology that makes these currencies possible is blockchain technology. Blockchain technology allows these transactions to be decentralized as opposed to being done with a centralized system, i.e., the use of banks. Blockchain technology also allows for transactions to be performed at a much faster rate than with a centralized system, and transactions are not subject to the rules and limitations of the central organization.
The news of people becoming crypto millionaires has also piqued people’s interest in investing in the crypto market. To check a currency’s price, all you need is to visit a crypto live prices index online.
Bitcoin: the first and most famous cryptocurrency
Bitcoin is the most famous cryptocurrency and was created in 2008 by a person or group of people under the pseudonym Satoshi Nakamoto. Bitcoin has attracted quite a following: the price of one Bitcoin skyrocketed to an all-time high of around $45,500 back in November 2021.
Bitcoin is purely a digital currency and doesn’t have any physical form or equivalent. It is purchased on online exchanges, just like any other stock on an exchange.
Ethereum: a versatile cryptocurrency with a range of applications
Ethereum is an open-source blockchain platform that allows developers to build and run applications. With Ethereum, you can develop decentralized online applications like the ones we see today on Facebook and Twitter. Ethereum is also a cryptocurrency that has seen quite a bit of growth over the past year.
Because of the versatility of Ethereum, it has become the second most popular cryptocurrency in terms of market capitalization: 203.8 billion dollars.
Litecoin: a faster and more lightweight alternative to Bitcoin
Litecoin is actually a fork of Bitcoin that was created in the year 2011. It is positioned as a faster and more lightweight alternative to Bitcoin with a market capitalization of 4.131 billion dollars.
Litecoin has faster transaction times than Bitcoin. This makes it easier for merchants to accept Litecoin as it reduces the time to approve a transaction. To put this into real terms, it takes 2.5 minutes to mine a block, whereas Bitcoin takes 10 minutes.
Dogecoin: The cryptocurrency with a funny meme
Dogecoin is probably the most fun cryptocurrency developed so far. It was created as a joke currency in December 2013 but has since gained quite a following within cryptocurrency communities. Dogecoin’s capitalization is at $92 billion, quite an impressive feat when you consider it was started as a joke currency.
To obtain Dogecoin, users can “mine” for it by solving computational puzzles on computers with powerful graphics cards.
Which cryptocurrency is right for you?
Keep in mind that cryptocurrencies are extremely volatile: the value of a coin can change by 80% or more in a single day. These fluctuations are due to several factors, including new regulations and heightened interest from people outside the cryptocurrency community.
Instead of choosing a single cryptocurrency to invest in, it would be better to diversify your investments and choose several currencies to invest in.