The conclusion of 2019 marks not only the end of another year but also an entire decade. In that time, cryptocurrency has been making great strides in a variety of ways. New digital currencies that go beyond Bitcoin, new pieces of technology, and an array of market ups and downs. Whatever 2020 and the following years hold in store, one cannot deny the monumental impact of cryptocurrency.
Every year, people update their lists of the best cryptocurrencies. They will remove some that underperform, add others that succeed, and sometimes their place on the list will change. Whatever the alterations, those that are able to nab a spot in the top 5, 10, or even 20 were lucky enough to experience a prosperous year.
Cryptocurrency performances in 2018 were dubious at best, yet in 2019, they still attract new investors. Regardless of the few – or many – drawbacks, there will always be investors showing interest. Some of these investors are novices who are only starting to get their footing in the field of digital currencies. Perhaps one of your New Year’s resolutions is to start investing in cryptocurrencies. The question is which ones do you invest in?
For cryptocurrency users, the very idea of selecting the best currency is an important decision. Whatever they choose is what will help them make money rather than lose money. As is the case with any new technology, there are potential risks. However, with those risks comes potential rewards. All in all, it is crucial that you do a fair amount of research.
This article will provide some noteworthy suggestions to keep an eye on. Not only that but it will also serve as a way to look back on the best of 2019.
What to look for
First and foremost, it is important to establish the essential factors of looking into the best cryptocurrencies to choose from. When it comes to finances, you will likely need to carry out analyses. To do this, you should investigate some key features pertaining to cryptocurrencies Three areas to look at are:
- The size of various cryptocurrencies. The size of the currency can give you a general idea of the overall adoption rate of the cryptocurrency. You are able to evaluate this by checking the market cap of the cryptocurrency. This will be indicative of what the relative size is.
- New types of cryptocurrency technology. In a world where technology is constantly evolving, you will want to look at the new technology a certain cryptocurrency has. For example, the cryptocurrency, Ripple, has a new system called the ‘xRapid solution’. This is a payment platform that aims to minimize the liquidity costs for international transactions.
- Security features. For a lot of people, security is the biggest concern when it comes to any financial transaction. It makes sense, though, as no one wants to lose their money. When you are handling cryptocurrencies, you will want to prioritize security even more because it is digital. Moreover, it is online.
With the establishment of these key features, we can now move on to listing the best of the best. These are cryptocurrencies that are not only popular but are also ideal for investing in.
1 – Bitcoin
The inclusion of Bitcoin on a “best cryptocurrencies” list should come as a surprise to no one. After all, it is responsible for giving the digital currency craze a boost. Bitcoin is the first peer-to-peer decentralized blockchain network supporting a cryptocurrency. It draws its foundation from open-source software. The primary goal is to be an independent network that no one controls and is verifiable by all. In an ironic twist, it inspires trust from its setup that is largely trustless.
Nowadays, Bitcoin’s main usage comes primarily from its store of value properties. The protocol of Bitcoin’s benefits from an extensive community of developers and enthusiasts. Furthermore, it has the largest crypto capitalization, strongest worldwide usage, and the largest public presence in the media.
Bitcoin is arguably the most secure network to exist so far. Its claims to fame are its persistence to push the limits of immutability and scarcity in the digital realm. Every year, there are new improvements to the Bitcoin protocol, making it better and stronger than before. It is the oldest cryptocurrency and to this day, it still continues to dominate the market.
If you want to go forward with investing in Bitcoin, then you will need to stay up-to-date. That means knowing about the latest news and trends pertaining to Bitcoin. With the news of a release of a new technical improvement, you may want to consider buying Bitcoin. Should there be a huge decrease in the price, then that may also be a good time to purchase Bitcoin. The reason for this being that you can easily buy it at a lower price.
2 – Ethereum
Ethereum is a popular blockchain network that is open-source and decentralized. Its design allows for the creation of smart contracts. These autonomous programs exist within the blockchain and anyone can access them at any time. They permit the transfer of any and all assets that run on Ethereum. Moreover, they are also on the basis of decentralized systems that are more complex.
In this day and age, we are beginning to see the emergence of decentralized finance applications. On top of that, we are seeing the development of a decentralized organization and management applications, as well as new types of marketplaces. There is also an array of applications that are starting to disrupt their own industries.
Ethereum has an incredibly solid community. Admittedly, the network is essentially a victim of its own success and is susceptible to various limitations. Be that as it may, there are several improvements in development. In time, they will be added to the protocol, thus making it capable of handling more than what’s currently possible.
When developers use Ethereum’s platform, they are able to build their own cryptocurrencies. Suppose that you want to construct a blockchain solution for the maintenance of your business’ supply chain. With Ethereum, there is no need for you to start from the beginning. All you have to do is build an application on Ethereum’s blockchain. Ethereum’s system makes it comparatively easier to successfully launch new blockchain projects.
Much like Bitcoin, Ethereum is a network that you should keep a close eye on. It is the leading smart-contract platform and is a host for a variety of high potential projects.
3 – Litecoin
Since its initial creation, the stability and reliability of Litecoin preservers. It has a considerably large community and is being actively followed. The teams regularly working on Litecoin are prone to quickly implementing every technical evolution of Bitcoin. These include such creations as Segwit and Lightning Network.
Litecoin is one of the top ten cryptocurrencies in terms of market capitalization. Furthermore, it is one of the oldest cryptocurrencies that continues to maintain interest over the years. This is the main reason for its inclusion on this list. However, when you compare its value proposition to Bitcoin, it is relatively weak. This is especially noticeable when you take into account the rolling out of scaling solutions like the Lightning Network. Regardless, the fact that Litecoin’s popularity persists is something to behold. Moreover, it does not take from Litecoin’s stable performance.
The market has a tendency to anticipate and price in halvenings prior to it actually happening. However, upon the passing of the halving, Litecoin will be less of a hot take. It is entirely possible that a majority of profits are already being taken in this round.
According to CoinMarketCap, Litecoin is currently the 6th largest cryptocurrency with a market cap of over $2 billion. As time passes, Litecoin continues to pique the interest of many investors due to its close connection to Bitcoin. To reiterate, this is a primary reason why Litecoin is one of the best cryptocurrencies to keep an eye on.
5 – Augur
Augur is an interesting addition to the list in that it goes beyond being a cryptocurrency. In actuality, it functions primarily as a decentralized prediction market platform. Much like Litecoin’s connection to Bitcoin having a hand in its popularity, Augur has its own special connection. Though not with Bitcoin, it has a connection with the equally popular and successful Ethereum.
The foundation of Augur’s prediction draws heavily from Ethereum. Users are able to open markets that stem from the results of real, timestamp events. An example of this would be the outcome of a hockey game or an election. These are events on which people can bet with ‘ether’.
Augur is one of the first ICOs (Initial Coin Offerings) of Ethereum. Applications pertaining to prediction markets are seemingly boundless and the insurance industry is one to watch closely. During the course of this year, we would see plenty of projects undergoing construction on Augur. Among those projects is Veil, which sets out to optimize the user experience. It will do so by providing a platform on top of Augur that is easy-to-use and seamless.
In spite of this, it is important to note that the adoption of the system is relatively weak. Regardless, Augur presses on and will hopefully signal substantial progress in the following years.
6 – Tezos
Tezos is a network that is still in its infancy, with its creation only occurring last year. However, it is leaving enough of an impact to be included on this list. Much like Ethereum, this network supports state-of-the-art smart contracts. However, there are several factors that ultimately set it apart from Ethereum. Tezos relies heavily on a pure proof-of-stake (PoS) design; one going by the name of ‘Liquid Proof-of-Stake’.
Tezos is an advocate for on-chain governance. This basically means that decisions concerning the state of the protocol’s evolution are determined through coin holder votes. The governance of decentralized networks is a topic that is frequently subject to hot debates. Tezos is among the first protocols to execute the implementation of an on-chain mechanism from the get-go. This feature is something that will follow closely.
A wide variety of teams with exceptional skills continuously work on developing Tezos to improve it. What’s more, the community is constantly growing, which in and of itself is a positive sign.
However, at the risk of sounding repetitious, the launch of Tezos was just last year. When you compare it to other cryptos – especially the ones on this list – it is still very young. Because it is comparatively smaller than Bitcoin or Ethereum, we have yet to see the outcome of its value proposition. Specifically, if it will end up being strong enough to compete with the likes of Bitcoin and Ethereum. Likewise, if they are able to bring in more projects to build on top of it.
7 – EOS
EOS is yet another cryptocurrency with smart contracts, similar to that of Ethereum. It is a system that enables the development, hosting, and execution of commercial-scale decentralized applications (dApps). With these features, it is clear to see why the system is experiencing a gradual increase in popularity.
EOS has a reputation for being the first blockchain operating system. It offers DApps that reside on the blockchain and parallel processing and it facilitates faster transaction speeds. Moreover, it enables better scalability than many of its competitors. Probably one of the most notable features of the system is that transactions on the network are free.
A lot of competitors – including Ethereum – have a transaction fee for transferring coins/tokens from one wallet address to another. In May of this year, EOS’s year-long ICO would reach its conclusion, raising a grand total of $4 billion. The reason for the longer-duration ICO was to try to create an orderly market for EOS. Specifically, without the sudden run-up and abrupt crash that is quite common with the initial launch of cryptocurrencies.
The year-to-date performance of EOS is flat. It has comparatively less volatility than there is seen with various competitors. Be that as it may, the overall enthusiasm and support for the project remains incredibly immense. Adding to its celebrity, it is among the most actively traded cryptocurrencies to exist on any exchange.
8 – Bitcoin Cash
Bitcoin Cash’s claim to fame stems from Bitcoin itself. Specifically, the fact that Bitcoin’s block size is 1MB, which proves to be a limitation. Transactions end up waiting for confirmation due to the blocks being unable to handle the increase in size for transactions. This is where Bitcoin Cash comes in, proposing a remedy for this situation by way of increasing the block size.
Bitcoin Cash is a fork of the original Bitcoin project and is one that you should keep an eye on. It ranks as the 5th largest cryptocurrency according to CoinMarketCap. On the topic of issues pertaining to Bitcoin’s current form, there is, of course, the challenge of considerably slow transaction speeds.
The development of Bitcoin Cash was possible thanks to modified code from the Bitcoin project. With this modification, it could create larger block sizes and promote faster transaction times. Furthermore, it would allow for better scalability. It has yet to achieve widespread acceptance and is not as widely recognizable as Bitcoin. However, Bitcoin Cash is still an interesting alternative to Bitcoin with great potential and a passionate market following.
Red flags to watch out for
Investing your money is enthralling, no doubt, but you need to be aware of certain red flags. Ones that are indicative of potential problems that could ensue if you’re not careful. When it comes to cryptocurrencies, these red flags include the following:
- Low market cap. Put simply, the higher a market cap is, the larger the market will inevitably be. High market caps also signify a larger amount of liquidity. This means that you should avoid low market caps because it is quite easy to lose money on your investment. There’s a good chance that it will be difficult to complete transactions in low cap markets.
- A centralized blockchain. Decentralization is crucial for blockchains because it helps keep data secure. What’s more, it ensures that no one can meddle with or manipulate your transaction.
Along with these warning signs, you will also want to avoid investing in cryptocurrency if you…
- …are bad with technology. You should invest in something else if you are not adept at learning new technology. New technology is vital to the foundation of a majority of cryptocurrencies.
- …are in no position to lose money. As with any form of investment, there are risks. The government typically supports your investment with regulations. With cryptocurrencies, there are little to no regulations or governments. So, there is a strong possibility that you may lose your money if something backfires.
- …already have high-risk investments. If you are already investing in high-risk items, then you may want to avoid adding cryptocurrency. People often fall victim to large losses using cryptocurrency. Therefore, it is critical that your portfolio is able to handle the risk.