Have you heard about cryptocurrencies and the different types that exist? Today this theme is trending around the world.
People talk about digital currencies, the media do special coverage to find out their value, and social networks are flooded with information on the different types of cryptocurrencies that exist.
In addition, when we review their prices (quotations) today, it makes us think and figure out what it would have meant invest in cryptocurrencies.
The most famous types of cryptocurrencies
To give you an idea, in 2013 Bitcoin was selling at 196.02 USD, and by May 2021 the price had risen to 55 thousand USD and by the beginning of November 2022, the price is around 20 thousand USD.
Imagine the return on investment of all those people who invested in initial prices and today, they still keep their virtual currencies or sold them for a very high price.
Despite the fact that they are becoming more and more popular and that they are highly commercialized, there are people who still do not really know what cryptocurrencies are.
Misinformation and scams are always present in this investment scheme. Already said Warren Buffet “Investment must have a rational basis. If a business is not understood, it is better to avoid it”.
If the best investor of all time has said it, it is time to begin to understand this investment model.
That is why, in this article, we mention the principles to consider when investing in cryptocurrencies. In addition, we explain the types of cryptocurrencies that exist on the market.
However, it is important that you understand that each one is different and knowing its characteristics will broaden the panorama.
To begin with, you must be clear that Cryptocurrencies are digital money that operate without the control of a bank, government or intermediaries.
It is a currency that takes the form of tokens and can be used to carry out transactions over the internet and is increasingly accepted in all establishments around the world.
Once this is clear, here we list the most popular types of cryptocurrencies in the market:
1. Bitcoin (BTC)
speaking of types cryptocurrencies, it is imperative not to associate it with Bitcoin. The history of this cryptocurrency says that its creator is Satoshi Nakamotoconceptualized in a white paper written in 2009 and is, without a doubt, the most well-known cryptocurrency.
One could even say that the Bitcoin it is currently the most trusted cryptocurrency, mainly because it is the oldest.
The most interesting feature of this cryptoactive is that of being a great resource to invest, thanks to the fact that its value is fluctuating regularly, which means that, due to the frequent changes in its value (low and high prices), you can to multiply your investment.
However, Bitcoin has extra features that make it an extremely attractive asset, for example:
transparent and fast
All the transactions that are carried out are clear since they are visible to any user. However, this does not mean that ownership of Bitcoins held by users within the Bitcoin Blockchain network can be detected.
The blockchain network is the technology with which Bitcoin operates. In addition, operations are executed quickly, regardless of whether users are in different cities, countries, or even continents.
Irreversible transactions
If you choose to invest in Bitcoin, it is essential that you know that the transactions are irreversible: once made, there is no going back. This situation seen from a positive side, generates confidence because it cannot be reimbursed to the issuer.
However, you have to be careful when making transactions with Bitcoin, because if you mistakenly send to another account, the asset will not be returned. Ideally, check every detail before executing any order.
Can you make payments with Bitcoin?
It is still considered a “new” and somewhat complex means of payment, which is why the purchase options are not yet as extensive.
Despite this, every day many SMEs and large companies are allowing payments in Bitcoin. Examples of this are Dell and Microsoft brand products, as well as airlines that allow you to pay for your plane tickets by this means.
Also, you can pay for movie tickets, hotel reservations, real estate, bets, internet purchases, etc. You can even buy a Tesla car with Bitcoin now!
2. Bitcoin Cash (BCH)
It was introduced in 2017. It differs from Bitcoin in that its block size is 8 MB compared to the original Bitcoin which was only 1 MB. Which represents a higher speed.
You can start trading this cryptocurrency on Coinbase in a matter of minutes.
3.Litecoin (LTC)
It was created in 2011 by Charlie Lee, MIT graduate and former Google employee. The main focus of it was to make it better than Bitcoin, with shorter transaction times, lower fees, more concentrated miners. It is the sixth largest cryptocurrency in the world.
Experts in the world of cryptocurrencies bet on Litecoin as the virtual currency of the future.
would you bet on this type of cryptocurrency? If so, one of the benefits that you will undoubtedly get is having the possibility of converting it to other currencies in a simpler way compared to the rest of cryptocurrencies.
4. Ethereum (ETH)
Ethereum is different from Bitcoin because rather than focusing on a digital currency, it is based on applications (similar to the one on phones). It seeks to take power away from intermediaries and for the creators of the applications to be the ones who really benefit.
It allows building and running smart contracts and decentralized applications without downtime, fraud, control or third party interference. Applications run on their platform-specific crypto token, Ether.
It should be noted that Ether and Ethereum, despite being related, have different meanings: Ether is the cryptocurrency of Ethereum, a blockchain platform created in 2015 and specialized in the creation of smart contracts and decentralized applications of all kinds.
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This platform has its particularities, because the people who use its services must have ETH.
The purpose of establishing this requirement is to grant monetary value to the operations carried out within the platform. And so that fraud is not generated, ETH was introduced as a payment method.
Just like Bitcoin, the value of Ether increased very quickly, and it is not regulated by any institution or government. The number of establishments and brands that accept it as a payment method is increasing.
The value of this type of cryptocurrency (Ether) is very volatile, this is because it is still considered a virtual currency that remains in a very early phase.
5. Ripple/XRP
This newly created cryptocurrency in 2021 cannot be mined because control is in the hands of the company in charge, Ripple Labs. Ripple is the second cryptocurrency after Bitcoin, in terms of market capitalization.
With regard to Bitcoin, it shares some qualities, such as: it operates under a reliable and encrypted system, where the data of the transactions carried out are available to everyone, except for the payment information.
And unlike the others types of cryptocurrenciesXRP aims to make monetary operations easier in the international field, and to be a channel and complement for the conversion of other cryptocurrencies.
A curious fact that you should consider if you want to invest in cryptocurrencies is that over time XRP has had a considerable boom. It is expected to be part of the traditional financial system.
6. Cardano (ADA)
Cardano is a cryptocurrency that was created with a research-based approach by engineers, mathematicians, and crypto experts.
Due to its rigorous process, Cardano seems to stand out among its proof-of-stake peers, as well as other large cryptocurrencies.
7.Dash
Dash is a cryptocurrency that tries to improve Bitcoin through costs and transaction times.
Now, when choosing between which of these types of cryptocurrencies to invest, the recommendation is that you evaluate the increase in value they have had and the predictions made by experts on the subject.
In short, these characteristics will serve as indicators to make the best decision. And do not forget that the results of your investment will not be seen overnight. Be patient.
Dare to invest safely in cryptocurrencies
Speculative investments in cryptocurrencies are the new trend. The important thing in this context is to understand the business in which you are investing.
If you manage to be one of the outstanding investors who take their education very seriously and with discipline, you have the possibility of obtaining good returns on investment.
However, you have to be careful, and if you don’t have the security to invest, approach people who know more about the subject than you. Besides types of cryptocurrencies that exist, it is important to choose the one that best suits your investment strategy.
Remember that being a speculative market, just as you can win, there is also always the risk and the possibility of losing in the same magnitude as the possible gains.
To be an increasingly prepared investor, we invite you to continue studying our blog, in which each time, we will present you with more relevant information to take advantage of any investment.
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