Unless you’ve been completely ignoring the rapidly-developing world of cryptocurrency trading, there’s no doubt that you’ve already heard about the historical rise and fall of Bitcoin. In December of 2017, the world’s premier cryptocurrency grew to a staggering value just shy of $20,000 for a single coin. The first cryptocurrency investors, some of whom were college students putting their spare change into Bitcoin in 2009, suddenly found themselves with millions of dollars at their disposal.
Suddenly, the entire world was obsessed with cryptocurrency trading after news of Bitcoin’s overnight millionaires caught the wind in the mainstream media. Investors threw money at Bitcoin, hoping to replicate the success of early investors. Unfortunately, shortly after the peak, Forex powerhouses China and South Korea announced that they would be cracking down on the trade and lack of regulation on cryptocurrencies, and longstanding Bitcoin crypto platform Bitconnect announced that they would be shutting down.
The result was a sharp drop in the value and price of Bitcoin. The cryptocurrency dropped from a high of almost $20,000 to a bit over $7,000. All of the new investors had lost hundreds of thousands of dollars almost overnight. The drop in price was so sudden and drastic that the suicide prevention hotline was pinned to the top of Bitcoin’s forum on Reddit, an anonymous social media site that allows users with a similar interest to congregate.
While Bitcoin’s value is slowly climbing up from the crash, what we can learn from this story is that, instead of investing in the biggest and the best, there is a large amount of profit to be made in smaller cryptocurrencies available on the market. By investing before the price reaches its pinnacle, you can get in on the next Bitcoin to maximize your profits.
No matter what skeptics say, it’s become clear that cryptocurrency trading isn’t going anywhere anytime soon. With many cryptocurrencies set to outpace traditional assets like gold and even real estate, there has never been a better time to start studying up on the world of cryptocurrency trading. Read on to learn about four of our favorite cryptocurrencies, and why we think they’ll outperform Bitcoin in the coming years.
Litecoin (LTC).Often described as the “silver” to Bitcoin’s “gold,” Litecoin was created by an ex-Google engineer, and the cryptocurrency has quickly amassed a following thanks to its improvements on the Bitcoin model. What consumers like about Litecoin is its speed of transaction; while it can take hours or even a full day to purchase and transfer Bitcoin, Litecoin can send money in a matter of minutes.
One of the biggest factors that draw customers to Litecoin over Bitcoin is this speed, combined with the fact that Litecoin also acts as a decentralized digital currency, just like Bitcoin. This means that all transactions are anonymous, and cannot be traced, which is a large draw to the platform of cryptocurrencies in and of itself.
Ethereum (ETH). Ethereum is a bit different from both Bitcoin and Litecoin because it is not completely anonymous; the actual coin that you trade is called “Ether,” while the platform itself is called Ethereum. Ether coins can exclusively be used on the Ethereum platform, but if that sounds too limited to become a cultural craze, you’re wrong. The goal of the Ethereum platform is to provide services and developers with a space to take control over their sales and audiences by giving them a place to market their software and applications without the risk of fraud, delay, or institutional interference that comes along when using platforms like PayPal or traditional banks.
A large number of freelance developers and programmers have already flocked to Ethereum to sell their services in exchange for Ether, creating a high-tech Wild West and a contained market holding some of the best and most cutting-edge app development techniques in the world. Some developers have even begun to create their own cryptocurrencies available for trade on the Ethereum platform using Ether as a backing.
Monero (XMR). Monero focuses on going back to basics with their cryptocurrency and amplifying the founding principle of Bitcoin: anonymous transactions. Monero employs one of the most advanced and complicated encryption processes called “ring signatures” that make transaction impossible to track or record. Monero transactions are signed with multiple encrypted signatures in much the same way that a VPN works, meaning that it is impossible to track a single transaction to a specific user.
Monero largely operates on donations from its users and places the highest values on privacy and decentralization, the founding principles on which the entire cryptocurrency boom was founded. Investing in Monero is a great idea for those who want to see the cryptocurrency culture return to basics.
Ripple (XRP). Ripple is a unique cryptocurrency because it was created for corporate usage. Unlike Bitcoin or Litecoin, Ripple cooperates with banking institutions and provides them with a simple way to send and convert money in real-time. The benefit of Ripple is that banks and corporations can quickly transfer large amounts of money between countries and currencies with a much lower transaction cost than traditional money transfer systems.
Unlike other cryptocurrencies, Ripple is not “mined” and generated online. Instead, the company has created a set number of Ripple coin in circulation, much like a fiat currency. This causes Ripple to remain relatively more stable than other cryptocurrencies, and with rumors surfacing that Amazon is considering accepting Ripple as payment, the value of Ripple is anticipated to grow in coming years.
So why not invest in Bitcoin itself when it’s clearly not going away? Bitcoin, though it is the original cryptocurrency, there are a number of corrections and improvements that can be made. Like most industries, competitors of Bitcoin each aim to improve on the original cryptocurrency by solving a specific problem. Deciding, which coin to invest in means sitting down and deciding what aspect of cryptocurrency trading appeals to you most. If you value privacy, Monero may be right for you. If you’re looking for speed, Litecoin might be the right cryptocurrency to invest in. No matter what you value, there’s no doubt that Bitcoin is in for some tough competition this year when it comes to trading.
More About Author: Currently, apart from leading the Investment Research Departments for Forex Brokers, he is a contributing Author and teaching his syllabus online on Trading101.