Retail investors have taken notice of Bitcoin and are starting to make it a part of their investment plans. As Dan Calugar explains, there is good reason for this, too, as the potential gains from Bitcoin are immense.
While Bitcoin garners much of the attention in the cryptocurrency world, it's not the only player in the market. Many other digital coins operate similarly to Bitcoin that makes for solid investment choices, too.
Today, new investors have a wide choice in cryptocurrency, with alternatives and competitors springing up all the time. Here are some of the most popular Bitcoin alternatives.
Ether is the most popular cryptocurrency next to Bitcoin. Still, it accounts for only one-10th of the market share that Bitcoin does.
Ether is the digital currency that's used in the network known as Ethereum. It hosts digital media and game distributors, financial services, and other applications.
A primary advantage of Ether is there's no intermediary necessary to verify transactions. Each transaction is done independently, with agreements put right into the code regarding whether it's in line with terms and conditions. It also has "smart contract" technology that provides other financial transactions, and the speed of transactions is much faster than Bitcoin.
The main drawback is Ether coins aren't accepted in as many places as Bitcoin is. Ether also doesn't have a pre-defined end in sight to where it won't expand anymore. This means as an investment; there may never be what's known as a "scarcity effect."
Tether can call itself the most popular of all the stable coins today. Unlike other cryptocurrencies, it's tied to a reserve, which helps them hold a steady value. That reserve could be gold or currency. It's connected to euros, dollars, and even the Chinese Yen.
This stability is the main advantage of Tether, but it's also part of its disadvantage. If you're looking to invest in a stable digital coin, this is it. If you're looking for the potential for substantial investment returns, then Tether may not be the best fit.
Many people prefer Tether because of its quick transactions and digital form. Others are wary of it, as it underwent a financial audit by a certified accountant in the last few years to prove it had enough in reserves. While this helps its stability, it also flies in the face of the privacy that cryptocurrency stands on.
All digital coins pride themselves on privacy, but Monero is perhaps the leader in this field. Unique technology that the company uses keeps the amount of all transactions and the receiver and sender completely hidden. If you're looking for ultra-privacy, then, Monero may be the one you're looking for.
A disadvantage of Monero is that it requires powerful hardware to process it because of all that privacy. It's also used for many purposes that aren't above water because of this anonymity. Because of this, it's also not accepted in as many places as other cryptocurrencies.
Litecoin was created by a developer who once worked at Google. It's been around since 2011, giving it similar longevity to Bitcoin and, as a result, a lot of legitimacy. In its existence, it has consistently remained one of the most valuable digital coins available.
Because of its high market cap, Litecoin is valuable as an investment. It isn't as volatile as some smaller coins because no single investor could sink it overnight.
At the same time, Dan Calugar points out that Litecoin has been on the downturn for a while now. In just the last four years, it has gone from the fifth most valuable cryptocurrency to the 10th. As such, its future value is certainly in question.
About Dan Calugar
Dan Calugar is a versatile and experienced investor with a computer science, business, and law background. He developed a passion for investing while working as a pension lawyer and leveraged his technical capabilities to write computer programs that helped him identify more profitable investment strategies. When Dan Calugar is not working, he enjoys working out and being with friends and family, and volunteering with Angel Flight.