Which Cryptocurrency Is Best for 2020?

Back in 2017, Bitcoin was one of the most popular cryptocurrencies for investments, gaining 1,300% that year. Still, others outperformed Bitcoin, such as Ripple, with a 36,000% gain. Since that happened, crypto enthusiasts have been looking to find the next best cryptocurrency possible. If you are looking for the best cryptocurrency to invest in, you are sure to find the answers here.

What Is Cryptocurrency?

In 2009, Bitcoin was the first cryptocurrency developed by Satoshi Nakamoto. No one knows who this person is because it was a pseudonym. Still, this person’s groundwork for inventing Bitcoin helped pave the way for other cryptocurrencies.

With that said, more people have accepted crypto as an investment option, medium of exchange, and a way to transfer money securely and digitally from one owner to another without having to use financial institutions or banks.

A cryptocurrency is designed to act as money or an alternative to the traditional fiat currencies of the nations. Many currencies are eroding because of inflation or at risk of a government seizure. For example, Greece has a 45% income tax rate and seizes about 900 bank accounts each day.

Benefits of Cryptocurrency

Before you can decide the best cryptocurrency to invest in, you need to know why it’s beneficial to invest in crypto at all. These can include:

Decentralization

Cryptocurrency owners use unique wallets to access the currency and can receive/send funds from particular wallet addresses that feature a special key for access. You can also use an exchange on which to store your currency, though this comes with extra risk. Regardless, the currency has a record on the blockchain, so a copy is stored at every node. Your computer keeps a ledger, but it also syncs with other computers online.

Therefore, your money isn’t in a bank at all. This decentralized nature means that cryptocurrencies are less vulnerable to localized attacks like hardware failures and fires, as well as seizure. Your data is stored off-site, but it’s also copied to a variety of nodes worldwide.

Privacy

Most cryptocurrencies are focused on privacy, so they obscure the receiver’s and sender’s identity. Cash is the only other form of currency that offers such anonymity.

Scarcity

Bitcoin has a fixed supply, and there is about 17 million Bitcoin out there. Still, only 21 million Bitcoin could ever exist because that code is built into the currency. That fixed supply offers similar characteristics to silver, gold, and other precious metals that have been used as money throughout history.

Once all Bitcoin are in circulation, the supply can’t grow anymore, which devalues the buying power of that currency.

Cost of Transfer

The costs associated with transferring cryptocurrency could be considered a pro and con, depending on the transfer type, currency, and speed to complete the transfer. For example, Bitcoin can get quite expensive if you have to clear a transaction quickly. If your deals aren’t time-sensitive, costs are lower.

Ripple, another up-and-coming crypto, is faster and less expensive to transfer, so many financial institutions are choosing Ripple-based transactions.

Smart Contracts

Some cryptocurrency options allow for smart contracts, which are programs on the blockchain that are used to manage transactions and other things. Ethereum offers this feature. In a sense, they can replace escrow services and arbiters. A smart contract looks at the transaction’s details, releasing the payment only when specific conditions are met.

Disadvantages of Cryptocurrency

While cryptocurrencies are highly beneficial, there are some drawbacks of which you should be aware. For one, awareness of crypto is growing, but most people focus on Bitcoin. Therefore, very few retailers accept crypto as payment, but the market is growing and expanding.

Abandonment

Many projects are abandoned early on, which means you may invest in something that is, essentially, worthless.

Regulations

Cryptocurrencies aren’t regulated at the federal level in the US, so states can choose what regulations and rules pertain to crypto or the blockchain, which serves as the backbone. Still, many investors worry that future regulations could eliminate or cause a drop in demand.

What to Consider for Cryptocurrency Investment

If you are looking for the best cryptocurrency to invest in, there are a few things to consider. They include:

  • Adoption Rate: When a new crypto becomes available, there can be significant gains for newly introduced coins. Still, you should look at the adoption rate and focus most of your investments on crypto that is used in real-world transactions.
  • Market Cap: The highest amount you can invest or take away is important. If the crypto is fledgling, it might not find the market at all, so you can’t exit the deal profitably.
  • New Technology: Ripple and Ethereum owe their gain to the technology that was built into their platforms. Therefore, these cryptocurrencies stood apart in the crowded market of similar offerings.
  • Industry Utility: Again, Ripple and Ethereum are great examples of cryptocurrencies that have utility beyond the exchange medium. Ripple agreed to be used within the financial industry to help transfer money throughout the world quickly and inexpensively.
  • Anonymity and Security Features: Technology, such as the smart contract found in Ethereum and others, can make your transactions more secure because each one has a set of rules in place. Other cryptocurrencies, including Monero, focus on anonymity, choosing to obscure the identity of the receiver and the sender of the funds.

Red Flags

When you are choosing to invest in a cryptocurrency, you likely hope that it is going to be available for monetary trade at some point. You can check out a few things now to show that it might not be the right investment opportunity for you.

  • Limited Interest: Within the cryptocurrency market, there are some well-known heroes. Of course, there have been plenty of duds, as well. These include well-intentioned crypto options that were poorly supported, never got off the ground, or were more hobby than currency. Stick to currencies that have shown the signs for continued market interest to be on the safe side.
  • Redundancy: Most cryptocurrencies are built using open-source code, so it is quite easy to clone existing crypto. This means minor changes are necessary to update the features and codes. However, new currencies might not offer unique benefits to help justify your investment, and the currency might not be adopted by the majority.
  • Limited Support on the Exchange: If there is little support on the exchange for a cryptocurrency, it can make it much harder to trade. You may need to take several steps or deal with conversions in one trade. Options with more support make it easier to exit or build your position.
  • Low Market Cap: Just like a market cap helps you distinguish between penny stocks and those on the Dow Jones, higher market caps for cryptocurrencies show more liquidity and a vibrant market. Lower caps and thinly-traded options might be a trap and could be nearly impossible to escape.

Our Criteria

While daring investors can choose to buy up new cryptocurrencies when they first pop up, there might never be a ‘next big crypto’ in the works. Plus, there have been almost 1,000 cryptocurrencies that vanished for those early investors. Therefore, when choosing the best cryptocurrency to invest in, we looked at these things:

  • Large market caps on established cryptocurrencies
  • Volatility
  • Promising technology
  • Recent trends and historic performance
  • Cryptocurrencies being traded on multiple exchanges (more liquidity)

The Best Cryptocurrencies Currently

Bitcoin (BTC)

Of course, you can’t go wrong with a classic. As Bitcoin was the first and is always going to be the best-known crypto on the market, it’s a great option for those who are starting out or want something they know is established. Plus, it has one of the largest market caps possible and is traded more than other options. Therefore, liquidity is assured, at least in the short-term. The retail world is catching onto it as a means of payment versus other cryptocurrencies.

Since it is down from its all-time high of more than $20,000 per Bitcoin, it still has plenty of room to grow, even with so many competitors in the market.

Ethereum (ETH)

This platform and currency made the smart contract part of the terminology of cryptocurrency. It has seen a lot of gains since it was introduced in 2015. It’s currently only trailing Bitcoin in market capitalization, so it is a widely-discussed and interesting project.

In fact, Intel, Microsoft, JP Morgan, and Chase are working to build business-ready software versions that drive Ethereum. With such market enthusiasm and momentum, Ethereum is here to stay, and investors must consider it as part of their crypto portfolio.

Ripple (XRP)

If you’re looking for a crypto that differs from its competitors, Ripple might be for you. It’s an invention from Ripple Labs, and its tokens are used in a variety of low-cost, high-speed money transfers throughout the world. The company announced multiple partnerships with top money-transfer services, and it expects to gain more partners throughout the coming years.

Unlike other options that trade on dreams and hopes, Ripple is already in the real world now, and it is showing signs of being adopted by financial markets.

EOS

Another option that features smart contracts is EOS. It’s currently gaining in popularity and is being credited as the first with a blockchain operating system. This helps it offer decentralized applications with parallel processing that live on the blockchain. Therefore, there’s more scalability and faster transaction speeds. Plus, all transactions on the network are free.

Many of its competitors, Ethereum included, require transaction fees to transfer tokens or coins from one wallet to another. With a longer ICO completed, it has an orderly market without the crashes that most cryptocurrencies experienced when they launched.

Cryptocurrencies are still new, and most people continue to be wary of investing in them. Therefore, if you have never invested in crypto before, you may want to start by investing only small amounts with limited risks. Consider building your portfolio to have widely-traded and popular cryptocurrencies, like the ones mentioned here. While initial coin offerings are tempting, they may cause you to lose everything you invest. The best cryptocurrency to invest in is one with which you feel comfortable. Make sure that you do your research and understand the potential risks before making a final decision.

Is Cryptocurrency Investment Right for You?

Over the last couple of years, the idea behind cryptocurrencies has exploded with more people investing in them. You’ve probably heard of the term before, even if you don’t know much about it. The first thing to do then is to find out what it is and why you want to invest in it. Cryptocurrency, sometimes shortened to crypto, is a virtual medium to exchange money. It’s unique because it features blockchain technology and cryptographical functions for its online transactions.

Cryptocurrencies are fully decentralized. They are not controlled by a single entity; in theory, they’re fully immune to government control. Still, most government agencies are working on trying to regulate crypto.

As an investor, you can exchange cryptocurrency online with few to no processing fees. Therefore, it is more appealing than a traditional currency because financial institutions charge to transfer them into the other currency.

Of course, you may be wondering how to invest in cryptocurrency. Now is the time to learn. Still, before diving in, it might be helpful to learn why you should invest in crypto.

Reasons to Invest in Cryptocurrency

You are going to find many benefits to investing in crypto. These can include:

Secure and Easy Transactions

It’s much easier to send money to someone securely with cryptocurrencies. They’re exchanged using private and public keys. This approach ensures that things are secure while keeping fees lower.

Potentials for High Returns

You’ve probably heard of someone who has made a lot of money by investing in cryptocurrency, such as Bitcoin. Though you might not become a millionaire by investing, you can see high returns. This investment is very volatile, so the potential to make a lot is there. Still, you must ensure that you’re buying the right ones.

Transparency

Cryptocurrency relies on the blockchain technology. This includes an online ledger, which is sent to everyone’s device. That makes it easier to verify your transactions and keeps everyone honest.

How to Invest in Cryptocurrency

Now that you understand what it is and the potential benefits of investing, you now need to know how to invest in cryptocurrency. There are multiple steps involved, but we walk you through each one.

Take Calculated Risks

We talked earlier about cryptocurrency being volatile, so they aren’t normal investments. While no country has outlawed crypto trading right now, it is a possibility in the future. If that happens, you aren’t going to be able to liquidate your assets. The goal then becomes risking the amount of money you can afford to lose.

Know the Coins

Up until about 2016, Bitcoin was the most popular cryptocurrency on the market, and there weren’t many other options. Now, however, you do have alternatives, though Bitcoin is still the dominant one. Still, in 2017, the shares for the entire crypto market fell to 40 percent from 90 percent and currently sits at about 50 percent as of two years ago.

There are many reasons for that. Bitcoin is still king, but people have started questioning its utility. You can find more exciting cryptocurrencies out there, but Bitcoin also suffered from performance issues.

Consider all the types of cryptocurrencies out there, focusing on the market cap. This is the value of the tokens available. While not perfect, it can help you judge the value of a particular crypto.

The Utility of the Coin

Once you’ve gone through all of the market caps and chosen the coins in which to invest, you have more work to do.

First, read those coin’s whitepapers. No, it’s not going to be exciting, but you have to put in the research to earn the rewards. Reading each whitepaper can help you in two ways:

  • Be more knowledgeable about the coin and utility it can bring to your ecosystem.
  • Whitepapers that aren’t well-written may indicate that the cryptocurrency isn’t worth investing in at all.

Whitepapers tell potential investors (like you) what they should know about a project. Most of these companies know that investors aren’t likely to read the whitepaper, which is why these documents may be poorly written or unavailable.

If you do find a well-written whitepaper, there are a few points to consider:

Value of the Project

Make sure the project is bringing utility to the ecosystem. The perfect example is Ethereum. It took off quickly because it was bringing in so much value. Developers finally had a platform to build dapps on the blockchain.

With that, there are issues that the crypto world wants to solve, such as interoperability, privacy, and scalability. It might be ideal to invest in projects that are primarily trying to solve those problems. For example, Zcash, Dash, and Monero are focused on privacy, while Cardano and OmiseGo are working on scalability.

Do You Need Tokens?

The next question is how to ensure that you’re getting quality tokens. You have to inspect the project to see if you need them and if the project is on the blockchain. If you don’t need either or both of those things, the cryptocurrency is just there to raise money. You can still find out the utility for the token, but you need to know the purpose, features, and role. Every token role has a specific set of features and a purpose. Let’s look at the roles that a token can take:

  • Right: When you take possession of a token, you get some rights within its ecosystem. For example, if you have DAO coins, you might have voting rights to decide on which projects can get funding.
  • Value Exchange: These tokens create an economic system inside the project. They help sellers and buyers trade within the current ecosystem. Therefore, people can complete tasks and earn rewards. The creation and maintenance of such economies are highly important tasks for tokens.
  • Toll: Tokens can act as a gateway to help you gain functionalities of the system. For example, with Golem, you need its tokens to have access to the supercomputer.
  • Function: Tokens can help holders enrich user’s experience in a particular environment. With a web browser called Brave, holders of its tokens can use them to add attention-based services and advertisements on the platform.
  • Earnings: You need earnings to distribute equitable profits to your investors in the project.
  • Currency: You can use currency as a storage of value, conducting transactions outside and inside the ecosystem.

How Does It Help with Token Utility?

If your goal is to maximize the utility amount your token provides, you have to have more than one of the properties mentioned above. More options mean more value and utility for your ecosystem. If it doesn’t have multiple roles or the token isn’t explained well, you don’t need it.

Some may wonder why you don’t need those useless tokens. To understand better, you need to focus on token velocity. It’s an indication of how much value and respect that token has. If people hold onto their coins, there’s low velocity. If they sell it fast for Fiat, ETH, or BTC, it’s got a high velocity.

Buying Bitcoin

Buying your Bitcoin is easy. The problem is that you have to store it, and most people don’t want the hassle. You can use an investment vehicle, such as the XBT tracker, Bitcoin ETI, and others. As your Bitcoin rises, exchanges and brokers set up financial products based on the cryptocurrency.

They all allow investors to bet on the Bitcoin’s price without buying it. While some people think it takes the fun away, it might be the easiest way to invest in the success of Bitcoin. Plus, you can utilize the same channels for investments like you’re used to, and you have a certificate if something goes wrong, and you have to sue.

Two Exchanges for Buying Bitcoin

The exchange is one of the most important functions in the cryptocurrency ecosystem. It acts as a portal between the crypto and Fiat world. You can choose to go from Fiat to crypto or from crypto to crypto.

  • Fiat to Crypto: With this exchange, you buy cryptocurrencies and get Fiat money back.
  • Crypto to Crypto: This exchange allows you to exchange some cryptocurrencies for others. While crypto to crypto offers valuable services, they’re centralized, so they are more vulnerable. It can be quite risky when you think about how much money the exchanges have to deal with every day.

When you buy cryptocurrency from the exchange itself, it’s not complicated. You just have to open an account with the exchange, verify your identity, and fund the account with money. Some exchanges don’t require you to put funds in, but instead, you trade with others directly.

Storing Crypto

Learning how to invest in cryptocurrency couldn’t be complete without understanding how to store it.

You’ve bought it, so now what do you do? Most people recommend that you keep it off of the exchange. Many cryptocurrency markets have been hacked or gone bankrupt, so it’s best to store it somewhere else.

To do that, you need a crypto wallet. There are two options available. Cold storage is similar to a savings account at the bank, while hot storage is like a wallet you carry with you everywhere.

  • Hot Storage: This option means that you keep your cryptocurrency in a device connected to the internet. These can include mobile, exchange, and desktop wallets. Many consider this option for money they plan to trade or for daily spending.
  • Cold Storage: Cold storage means that you keep the currency on a device that’s offline. This is the best choice if you want something extremely secure. Still, cold storage works best for long-term holders who don’t need their money for months or years.

The process can seem daunting and confusing at first, but you can do this if you take the time to learn about it. Therefore, it isn’t a get-rich-quick scheme, and it does require you to take some risk.

However, the allure of cryptocurrency is that you can make profits if you invest correctly. Those who want to try their hand at it now know what to do and where to go. This ensures that they can start trading and learn as they go. In most cases, that is what you have to do when investing in any market.

How to Create a Cryptocurrency

Whether you’ve done a deep dive into the world of blockchain technology or you’ve just heard about one or more of the successful currencies, there’s no denying that it’s an alluring concept. While there’s no way of telling what level of success to expect in the distant future, it’s hard to argue with the results thus far.

Think of Bitcoin, for example, which is the top cryptocurrency. It has been that way since inception, and that’s expected since it was the original in a series of alternative currencies that are digitally powered.

In 2017, a single coin was worth over $17,000 USD. Now, at the time of writing, the value is just over half that, but that is still a huge figure for a currency that started in 2011 and was worth virtually nothing.

Of course, blockchain technology continues to make strides, and many people and organizations have gotten the idea of creating their own cryptocurrency. After all, if that were to be done successfully, they could have another Bitcoin or Ethereum on their hands.

Have you thought about this too? If you have, then there are quite a few things you need to know before you traverse that road. Therefore, this article is dedicated to getting you ready for this innovation.

Overview of Cryptocurrencies

When you hear the word cryptocurrency, what does it mean to you? Do you see it as an alternative form of money? Do you see it as a concept that allows for currency trading to take place with a difference? Either view isn’t wrong, but it also doesn’t do the premise complete justice.

The first point to note about a cryptocurrency is that there is no central platform that binds it. This means that geographical restrictions and regulations do not apply to it, and there is no single entity that monitors it.

Fund transfers are done on an electronic platform, and all transactions must be verified. This verification and currency movement is done using various encryption techniques. The idea is to promote freedom, decentralization, security, and privacy. This is the power of a medium of exchange that isn’t owned or regulated by a bank, government, or other entity.

Now, the transactions associated with a currency tend to take place on a blockchain. Even this promotes the concept of decentralization, since the established network connections are peer-to-peer (P2P), as opposed to conforming to a client-server setup.

The name blockchain is used because the data is stored in the form of data blocks. The integrity of this data must be maintained, and this is the reason that there is an incredible level of redundancy built into the blockchain’s architecture.

The blocks use a chronological workflow to store data on the various transactions and addresses that execute them. Any new data blocks must go through a verification process, which makes use of the other blocks in the system.

When the need arises for the information in an existing block to be altered, that which is contained in subsequent blocks also needs to be edited to preserve data integrity.

Cryptocurrency Workflow

Now that you understand the underlying principles of cryptocurrency, it’s time to look at the active parts that make it flow.

It all begins with the creation of a transaction by a member of the blockchain. This transaction is then broadcasted to the nodes that lie along the P2P network. Next, the nodes do a validation of the transaction. Note that the transaction cannot be carried out unless all nodes on the network successfully validate it.

Once the validation process is complete, then the transaction may create new data blocks. The final step is for the blockchain members who helped in the transaction validation to get a reward in the form of cryptocurrency.

That last step is very important, as this is how additional cryptocurrency gets into the mix. The process of validation by blockchain members is known as mining. When the transactions are being performed, complex mathematical equations must be solved to do the verification. Such equations require a lot of processing power to solve, so custom hardware is typically used.

Once the equation is solved, then the contributor receives a cryptocurrency reward for the contribution to the verification.

Cryptocurrency Advantages

Here are the advantages of cryptocurrency that many people have been taking advantage of:

  • Decentralized medium of exchange
  • Secure transaction method
  • Fast transaction performance
  • Privacy protection
  • Low cost

Cryptocurrency Disadvantages

These are the disadvantages that people deal with where cryptocurrencies are concerned:

  • Very volatile
  • Transactions are final
  • Many places don’t accept it as a form of payment

Coins and Tokens

While cryptocurrencies don’t have physical notes, they do have digital substitutes in the forms of coins and tokens. People don’t hear about tokens as much as they do coins, and they are not the same thing. Be that as it may, there are many persons who use the terms interchangeably. If you’re looking at setting up your own cryptocurrency, then you need to know the difference and understand which of the two is appropriate for your needs.

The main difference between a coin and a token is the blockchain on which the transactions occur. Coins use their own blockchain. Neo is an example of a coin based cryptocurrency, as it uses its own blockchain. A token operates using another blockchain for verification. Ethereum is commonly used as the backend in this sense for starting cryptocurrencies.

Apart from the main distinction, there is also the fact that coins can be used to buy tokens but not vice versa. Additionally, while you can use your coins anywhere you wish, tokens tend to be bound to a single community or industry.

Tokens are also often used to crowdfund projects and startup operations, usually in the form of a security token offering (STO).

You can think of it in the context of any company that has a loyalty points system that you can use to get discounts on their products or services. You can use either your cash or these loyalty points to make your purchases.

In this manner, cash behaves like coins, while the loyalty points behave like tokens. You can use your cash to buy tokens, but not vice versa. Furthermore, you can use your cash to buy things elsewhere, but you can’t do so with the loyalty points.

Why Create a Cryptocurrency?

If you want to create your own cryptocurrency and you’re unsure of the benefits, here are the ones that stand out the most:

  • You get to leverage a new customer base without geographical restrictions.
  • The risk of fraud is eliminated.
  • Transaction speeds are improved.
  • The cost of operation is reduced.
  • Transactions are processed in an anonymous manner.
  • Transactions are completed securely.

Is It for You?

Though the creation of a cryptocurrency is an alluring prospect, you should be sure that you need to before you do it. There’s no point in wasting your time if your operation has no need for it. Cryptocurrency is suited for businesses that meet the following criteria:

  • The largest share of revenue is inherited from digital means as opposed to physical ones.
  • Your business is likely to benefit from an online payment option in the form of an increased customer base.
  • Your business resides on the internet.

Note that while these are all great individual reasons to create a currency, its best for companies that meet all the criteria.

How to Create a Cryptocurrency

Now that you’ve covered all the knowledge bases, it’s time to look at the steps to creating your own currency.

Coin or Token?

You need to choose which of these you want to use as the currency’s driving force. Creating a coin takes more understanding and time, so don’t go for this method if you want something that is quick. You need to either become experienced in decentralized technologies or hire someone who is. Coding skills are required to create, edit, and maintain the coin, which means you may need a development team.

Tokens are the quicker way to go, since you use an existing blockchain and get the benefit of the technology, support, and consensus mechanisms.

Define Your Purpose

You should never create a cryptocurrency just because you can. The most successful cryptocurrencies are those that saw a problem and aimed to solve it. A good example is transaction speed. Maybe you see where certain transactions are taking ages because of the way how bank transfers work. If you wanted to remove the bank from the equation, this would be a good reason to create a currency.

Make sure that your initial coin offering (ICO) or security token offering (STO) proposes value to the customer. Do your research to ensure that you achieve this, or your currency is dead on arrival.

Get Your Development Team

Of course, you can get through this whole process without a development team, but if you want to improve your chances of success, then you may want to investigate getting an experienced development team on your side.

The world of blockchain is a complex one, and the people who can navigate it are assets. Remember that the more work you put in now, the less you need to put in later.

Setup Smart Contract Rules

A smart contract is a set of code that sits on a blockchain and runs whenever the prerequisites are met. These rules need to support your vision and purpose for creating the cryptocurrency. The feasibility of your currency may be greatly affected by your smart contract setup.

Get a Security Audit

Not all coin and token offerings are legitimate. Investors may be shy about yours because of this. To ensure that your legitimacy is validated, hire an external audit company to speak to your credibility.

Be Meticulous in Writing a White Paper

This is the first impression, and it needs to demonstrate that your idea has both merit and value. Your white paper needs to clearly define the problem you are solving and why it matters. It also needs to define your roadmap, team and qualifications, token/coin release specifics and schedule, and how you plan to use the ICO/STO funds.

Promote Your ICO/STO

Use all forms of media that you can to get the word out about your ICO/STO. Just remember to ensure that your promotional method clearly establishes the value that your project brings.

Support Your Community

The best cryptocurrencies have dedicated and strong communities. Ensure that updates are provided on time, questions are answered, and that users don’t feel like the currency is dead. You may need a team for this, but the reward is worth it.

How to Trade Cryptocurrency

Cryptocurrencies seem to have taken the world by storm. There was next to no traction at its inception is 2009 with the creation of Bitcoin. However, the next several years saw the currency blossom into an accepted, decentralized standard for trading that is now accepted by many parties.

Though the exchange medium has taken off in such a strong way, there are still many people who are out of the loop where it is concerned. It’s not so easy to understand initially, and some of the sources of information seem to complicate things more than they do make them clearer.

A big part of the cryptocurrency market is trading. Knowing how that works is one of the biggest assets to functioning in this wildly successful market.

Cryptocurrency Types

For a long time, Bitcoin was the only cryptocurrency that seemed to be making the headlines. This made sense back in the late 2000s and the early 2010s since there was no real competition.

Since then, however, many have been created, and there are now over 1,000 that are available. There’s not as much spotlight shed on some of the smaller and newer ones, so many people don’t know how viable or feasible they are.

Take Vertcoin, for example. This is probably the first time you’ve heard of it, but it is one of the cryptocurrency alternatives to watch based on market analysis. Vertcoin borrows heavily from the Bitcoin formula in terms of its workflow and underlying design.

Based on information provided by CoinMarketCap, there are over $53 million VTC in circulation. At the time of writing, VTC trades for $0.39 USD apiece. However, it has demonstrated its volatile nature by fluctuating as high as over $9.

Of course, the less popular currency alternatives are not traded as heavily, which means that if you decide you want to sell yours, finding a buyer could prove to be a very challenging task.

If you’re the type of buyer that wants to understand everything that is available instead of what’s popular, then you can investigate some of the less popular cryptocurrency alternatives. CoinMarketCap provides a listing of the available ones, their rank, the available and circulating supply, etc.

As a beginner though, it is recommended that you start with some of the leading ones to keep things a bit less confusing. The current leaders are currencies such as Bitcoin, Litecoin, Ethereum, and Bitcoin Cash.

Bitcoin and Ethereum account for over 50% of the current market, which explains their immense popularity. Some of the other cryptocurrency types that are available and somewhat viable are:

  • Ripple
  • Bitcoin SV
  • Tether
  • EOS
  • Binance Coin
  • Cardano
  • Tezos

Understanding Cryptocurrency Trading

As you’ve probably noticed, the value of cryptocurrencies tends to be expressed in comparison to US dollars. This is the universally accepted currency of exchange, so traders buy and sell their coins in exchange for US dollars.

Trading cryptocurrencies is like trading forex in many ways. Forex investors trade an option or position, and these trades are done at times that are deemed fit by the investors. Whenever a trade is made, there is an expression of a profit or a loss.

You buy and sell your cryptocurrency in the same way. You can watch the market to see how it moves before making any decisions. The buy-and-hold strategy is a very popular one, which aims to maximize from trading based on the volatility of a currency.

In most cases, you profit when your cryptocurrency goes up in value, since it means that it has amassed a higher value and purchasing power. Be that as it may, you can use things like futures contracts to set a value in stone in the context of an agreement so you can profit even if the value falls.

Buying Pieces

As a new entrant into the world of cryptocurrency, you may feel a bit hesitant to enter when you see the price tag attached to these currencies. Bitcoin, for example, is in a position where a single coin is worth thousands of US dollars. The prospect of buying a coin for that amount of money is scary, especially since there’s no guarantee of profit.

What you may not know is that the units of these coins are not limited to the whole. In other words, you don’t need to purchase a whole coin. There are modular decimal units that you can purchase. The current crop of Bitcoin can be split 100 million times, which makes things way more affordable and welcoming.

Of course, calculating such small units to decide how much you can buy would be a chore, so exchanges do it the other way. You specify a US dollar amount that corresponds to what you are willing to spend, then you are told the coin amount that you can get for that money.

Brokers and Exchanges

While you can invest in funds, the context of this article is to discuss direct trading. This is where the concepts of exchanges and brokers come into the mix. Basically, you can choose to trade on the exchange, or you can take a more hands-off approach and have your trading done via a broker.

Now, you may be looking at this in the same manner that you would exchanges and brokers on the stock market. While there are many similarities, there is one key difference that tends to push people towards trading directly on the exchange.

If you choose to go with a broker, what you are doing is entering into a Contract for Difference (CFD). With a CFD, ownership of the cryptocurrency is not yours, which is an understandably huge problem for potential traders.

Therefore, many people decide to go with an exchange (or several) and learn the trading platforms on their own.

Exchanges to Consider

Are you looking for one or more exchanges to consider for your trading? Consider the following:

  • BKEX
  • BitForex
  • Binance
  • Coinbase
  • Etoro
  • easyMarkets
  • XTB
  • Plus500
  • Hotbit
  • GDAX

The Trading Workflow

Different exchanges operate in different ways, but you are likely to see a similar workflow to that of a stock exchange here. The concept boils down to an expression of desire from both buyers and sellers on the market. Both sets of people advertise the amount of cryptocurrency they are interested in either buying or selling, and they also indicate the price at which they are comfortable doing so.

On an exchange, there’s no penalty for canceling orders because you change your mind or because the price is undesirable. However, in a market, such orders are not reversible.

Expressions of profits and losses are only recorded digitally until a sale happens. At that point, the figures are set in stone.

Watching trends is a great way to help you to decide when to make a move. While there have been spikes and falls, the prices for cryptocurrencies have been steadily trading upwards. Choose how much trading you want to do based on your goals and the type of trading style that fits you. If you want to hold a currency indefinitely because you think it’s likely to appreciate consistently, you are free to do so.

Note that, if you’re more of a short term trader, things can get a bit rougher. Day traders are known to have the biggest issue. The heart of this issue is the volatility of cryptocurrencies. There are many events that can lead to unbelievable price spikes and falls.

Considerations

Now that you have all the puzzle pieces that you need to start trading, it’s fitting to end with some considerations that you should bear in mind.

The first is the intrinsic value of a cryptocurrency. You need to establish your own stance on the matter, which helps you decide if you want to trade or not. Many people believe that the only reason there is value placed on these currencies is their scarcity. Of course, the same can be said about other assets, but that’s for you to decide.

A bigger concern is the regulation aspect. A part of the decentralized and uncontrolled nature of cryptocurrencies means that there is no regulation currently. Organizations such as the SEC are not fond of this and are lobbying for cryptocurrencies to fall under their regulation. To date though, these currencies have not been officially cited as acting illegally.

The final and largest consideration is the relative failure rate of cryptocurrencies. While Bitcoin and Ethereum sound like huge success stories, there are numerous types that never saw the light of day after their creation. It remains to be seen whether the current crop of successful coin types may meet a similar fate.

A Guide to Cryptocurrency: How to Buy and Invest

If you keep up with finance news at all, especially with regards to the online world and emerging technologies, then you may have heard of cryptocurrencies. Many people are becoming more and more interested in investing in cryptocurrencies, but others are unsure of what the currencies are or if they are genuinely valuable in any way.

What is a Cryptocurrency?

In very short terms, a cryptocurrency is a currency that is digital and that is not backed by any brokers. They are simply traded between consenting parties, and the trades are kept track of on a ledger. There are several different forms of cryptocurrencies, but they have the same major features in common, for the most part. These are:

  • Global: There aren’t geographical borders for restrictions, in the sense that they are tied to a particular area or region. Cryptocurrencies are the same for different countries, and they can be traded freely within and between countries.
  • Peer-to-peer: The currencies are traded digitally, from one person to another online.
  • Digital: This is perhaps the feature of cryptocurrencies that makes them both so controversial and unique. The currencies exist solely online, and there is no physical form of them whatsoever. Some say this makes them useless and that they have no intrinsic value or security attached to them.
  • Encrypted: When cryptocurrencies are traded, the parties are given nicknames or usernames instead of using their real name. This is where the ‘crypto’ part of the name comes from.
  • Trustless: This basically means that there is no need for you to place your trust in anybody for the system for it to work. It is designed in such a way that this is simply not necessary.
  • Decentralized: There are no banks or physical places to use cryptocurrencies, nor is there a central server where they are kept. All users of cryptocurrencies are responsible for the crypto that they have.

What is a Currency?

This concept can seem quite odd at first glance, so it is worthwhile delving deeper into the concepts of money and finance in general, in order to give them some context. Think about what money itself is. Currencies are different around the world, but money is essentially something physical, be it a coin or a note, that we have unanimously agreed is worth something, and we operate on that basis. For example, a $100 dollar note is ultimately a piece of paper, but it has value to all of us because we agree that it does.

If we put money in the bank, we cannot see that money, but we trust that it is in the bank and that the bank takes care of it for us. A bank is an example of what cryptocurrency users often refer to as a “trusted third-party system.” This is because it is a third party, whom we place our trust in, in this case largely due to their authority.

How is Cryptocurrency Different?

Cryptocurrency is different because it offers people the possibility to avoid relying on governments or banks for currency. In fact, such institutions offer no support in this instance, so it is actually a fundamental element of cryptocurrencies, in that sense. Two consenting users of cryptocurrencies simply send an agreed amount to each other via the internet, without the need for regulation or supervision from a third party. This of course has called into question the legality of the practice because it leaves people potentially vulnerable to being duped out of their money, in some cases.

However, cryptocurrencies have some inbuilt features which are designed to keep the system itself safer for users. They make use of a blockchain, which is a database that is shared by users. The blockchain makes record of all the transactions that happen using cryptocurrencies. It basically validates the transaction and keeps note of it in case the information is needed later. While it is not possible to see the information of the users who took part in the transaction, all transactions that take place using cryptocurrency can be seen via the blockchain.

Some people prefer cryptocurrency because they believe it is the best way for us to preserve our privacy when using money online. The only information that you need to give when you make an account to use a cryptocurrency is a public key and a private key, and the private key is like a password that only you have access to. While the system may have its flaws, it isn’t difficult to see how this is more private than providing an institution with your address and date of birth.

The Origins of Cryptocurrency

People have been trying to make digital currencies since the 1990s, but the first successful one was arguably Bitcoin, which many people have heard of and associate the concept of cryptocurrency in general with. The creator of Bitcoin launched the blockchain in 2009, and he made the first trade with a coder, who he sent ten coins to.

Silk Road was an online black market, and many people began to use Bitcoin to shop on the Silk Road, as it offered them far greater protection from authorities because it made it so much easier to hide their information when using the service. After only two years, Silk Road was shut down in 2013 because there were many illegal services and products that were offered on the site. The FBI seized the Bitcoins held by the site, which arguably led to the wide publicization that Bitcoin received and is perhaps the reason the name is so well-known to this day.

Bitcoin has become steadily more valuable since its launch, as more and more people have begun to use the currency. This has caused its value to increase steadily, in a similar sense to physical currency – more people agree that Bitcoin has value, and each individual Bitcoin is therefore worth more than it would be if nobody agreed that Bitcoins are valuable. On launch, one Bitcoin (BTC) was worth $1. The value of the BTC fluctuates, but on its best day, 1 BTC was worth $20,052.

The popularity of cryptocurrencies has led to others using the concept to develop similar, and arguably superior, technologies. One example of this is Ethereum, which utilizes the blockchain idea but builds upon it by making it more substantial. Ethereum actually allows its users to develop contracts that they can agree to between the two of them, which is an promising concept, especially as it should mitigate much of the concern people have regarding the safety of using Bitcoin.

How Can I Buy and Invest in Cryptocurrencies?

You may be wondering whether or not it is good idea to invest in cryptocurrencies, given their growing relevance in the world. The primary argument for investing in cryptocurrencies is that physical currency is likely to eventually lose its value due to our increasing reliance on digital technologies. You may or may not buy into this, but it is regardless a potentially good way to diversify your portfolio. It may not be wise to invest solely in cryptocurrencies at this stage though, given that many of them can be somewhat unstable in terms of value.

Many of the earliest investors in Bitcoin and Ethereum made considerable profits, as the value of the currencies skyrocketed as they grew from year to year. However, cryptocurrencies should be seen as somewhat different from the other asset classes, as they are so much more volatile. If you intend to invest in cryptocurrencies you need to understand that it is riskier to invest in them than perhaps any other class of assets. With that being said, it is possible to mitigate the risks associated with investing in Bitcoins in many cases, as long as you take care to invest wisely.

It is also worth mentioning that Bitcoin is not the only cryptocurrency out there. While it is still the dominant force in cryptocurrencies in many respects, as of 2018, it represented 50% of the cryptocurrency market. As such, if there are other cryptocurrencies that have your attention and you are interested in investing in them, it might be the right thing for you to do, instead of turning to Bitcoin because of the value of its name.

If you want to purchase a cryptocurrency, the easiest way to do so is to go to the website of the relevant cryptocurrency and decide on the quantity that you want to buy. For example, the Bitcoin website lists various trusted exchanges that you can go to in order to buy Bitcoin. If you want to branch out into other cryptocurrencies but are unsure which would be best for you, CoinMarketCap.com is a website that provides a list of cryptocurrencies in order of their value. This is a good way to get a fairly comprehensive understanding of the market as it stands.

On the other hand, you can invest in cryptocurrencies without storing them by simply investing in them the same way that you would any other stock. There are several products which can be used to invest in Bitcoin, for example, and these are supported for several different markets and exchanges. The XBT tracker can be used for investing in Bitcoin, and as of 2018, it was supported for the German and Swedish stock exchanges. This can be a great way to reap the benefits of the rise of cryptocurrencies without having to go through the headache or potential hassle of storing them, especially if you don’t intend to use them for anything.

There is often a good and bad time to invest in a particular asset class. This is also true of cryptocurrencies, but there are not necessarily any rules with regards to when is a good time to buy a cryptocurrency and when is not. You should keep an eye on the trends in the market and the performance of the currency and then avoid buying either at a peak or a crash in terms of its value, but this is not unique to cryptocurrencies. A good rule of thumb regarding cryptocurrencies is perhaps that, given how unusual they are, it is simply best to avoid comparing them to other currencies at all.

How to Buy Ripple Cryptocurrency

There’s no denying that Bitcoin sits atop the cryptocurrency food chain. This respect and popularity are not misguided though, as it was the one that started the whole revolution with this new form of digital currency as a means of exchange.

It singlehandedly holds almost 40% of the market. Though you may only hear of a few, this is a market that is home to over 1,000 different cryptocurrencies. Bitcoin attempted to launch a medium that is decentralized and allowed for ease of transaction processing. Most importantly, there is a workflow that promotes fairness and equality.

The fact that the cryptocurrency realm didn’t become a Bitcoin monopoly is a testament to the effectiveness of the execution. This is the reason that people can talk about other currencies that have been gaining steam.

Ethereum, for example, is an alternative that stands out with 18% of the market share. Not only does it provide a means of exchange, but there is also a platform, which serves developers as they build and run autonomous applications.

Both these currency types have made amazing strides, which is obvious in their numbers. After all, Bitcoin started out being next to worthless and now trades for over $9,000 per coin. This isn’t even its best performance, as it peaked at over $17,000 in 2017.

Bitcoin and Ethereum have been the subject of much focus though, so this article isn’t about either of them. Today, the focus in on XRP, which is more affectionately known as Ripple. Here lies a cryptocurrency that is picking up steam in the world of business. This is especially true in the area of banking and finance.

The idea of this read is for you to understand a little more about Ripple, and for you to have an idea of where to go if you’re interested in purchasing some of the increasingly coveted currency.

Understanding Ripple

The current banking system created the need for Ripple. Most of the things average people do in a bank work out fine. There are deposits, withdrawals, and even balance inquiries. However, these aren’t the only things that can be done in a bank.

There are many reasons why you’d want to do international transactions, and many of these transactions are transfers. However, you may get a bit annoyed and antsy when you hear that your transfer may take up to a week to complete. This is because of the path that the funds take once the transfer is initiated. There isn’t a transfer from one bank to another in many cases. What you get is a transfer that goes through a series of banks until it gets to the destination. There are delays at every node because of validations, currency conversions, etc. So while you have the speed of the internet at your disposal, your transactions can’t fully capitalize on it.

This is where Ripple comes in to make a difference. One of the things that cryptocurrencies aim to do is establish single standards for single operations. Ripple wants financial institutions to use one protocol, which can move money around the world at the speed of a click.

This is the reason that Ripple targets financial institutions. The source and destination fund currency may not be Ripple, but it can easily be converted. Once the conversion is done, the Ripple Transaction Protocol (RTXP) takes care of the transfer.

Of course, there are the matters of capacity and speed. Well, a transfer using the protocol reaches completion in four seconds, and 1,500 transactions can be processed per second. This means that 22,500 transactions can be processed to transfer completion every 60 seconds.

Ripple is still a cryptocurrency though, which means that there is always the question of stability. It may not look to be too unstable because of the low-cost bracket that it stays in. However, the percentage changes can be astronomical. One also must imagine that, as more institutions adopt Ripple, it only stands to increase in value, which means that the changes would have a great effect. Therefore, the current focus is to stabilize Ripple at least as well as currencies, such as the US dollar.

The focus of Ripple can be a turnoff for some, so you should ensure that you have a specific reason for wanting to acquire the currency. Initially, the idea was to allow private users to complete money transfers at high speed and low cost. Now, the focus has shifted to financial institutions, which doesn’t sit well with many users for obvious reasons.

Purchasing Ripple (XRP)

The actions necessary to purchase Ripple aren’t very complicated. The problem is all the options that exist for you to achieve the same thing. For example, the first step, which isn’t even initiating a transaction, has multiple ways that you can achieve it.

Your Ripple Wallet

This one is straightforward enough to understand. You don’t keep the money that you walk around with in your hands all the time. You also don’t keep it in nothing. Most people keep their money in their pockets or in a containment medium such as a wallet or purse.

Imagine that Ripple consists of coins that are very valuable and coveted by everyone around you. If you keep them in your palms, they are liable to be stolen. So the safest thing for you to do is to keep them in your wallet. This wallet can be hidden, and it prevents unauthorized access from unscrupulous individuals.

Cryptocurrency wallets tend to be software or hardware driven, and Ripple wallets are no different. Of course, there is software embedded into hardware wallets, but there is also a physical device, which is not the case with pure software wallets.

Software wallets are less secure and are mostly free. Hardware wallets are usually removable devices, such as flash drives that have your private key embedded within. Of course, the thing that you can remove and take along with you is the more secure alternative.

There are several hardware wallets available to store your XRP. It’s important to note that many of these also store other cryptocurrencies. There are also a couple of reserves that you should bear in mind.

Before you can submit transactions, you must have at least 20 XRP in your wallet. This simple barrier, which is known as the base reserve, prevents spamming, so the ledger growth is more easily contained. There is also an owner reserve, which is required for each object (i.e., transaction offers and trust lines) that an address (your wallet) owns.

Some of the top XRP wallets on the market are:

  • Ledger Nano S
  • Rippex
  • Gatehub
  • Edge Wallet
  • Toast

Locating an Exchange

Once you have your wallet sorted out, the next step is for you to find an exchange to complete all your transactions on. You can think of an exchange as a place where traders come together to make and accept offers for purchase and sale.

It works in a similar manner to a stock exchange. Of course, since you got a wallet and you’re looking to do trading on your own, you’re not going through the equivalent of a stockbroker. There are brokers available for cryptocurrency trading, but people prefer not to use them because of the contract that is necessary to use them. It is known as a Contract for Difference (CFD), and though the broker trades on your behalf, you don’t own the digital resource, i.e. the cryptocurrency.

Note that a wallet is not needed if you don’t have the currency, as is the case with brokers. You also put yourself in a similar situation by investing in XRP funds, such as eToro. In this case, you can use an accepted monetary currency to buy and sell XRP, but you can’t transfer the XRP because you don’t have the ownership to move it.

Depending on the exchange you choose, the purchase methods can vary. The most common method of purchase is to use an accepted monetary currency, such as USD, to purchase the Ripple equivalent. You also have the option of trading XRP for Bitcoin on some exchanges.

On most of the available exchanges, you can use your bank funds to buy XRP. This can be done via debit card, credit card, or wire transfer. Not all exchanges support all three methods, so some research is required on your part. Many of them support one or two of the three options. Some of the exchanges you can check out are:

  • Binance
  • Coinbase
  • Bitstamp
  • CEX
  • Coinmama
  • Huobi
  • Upbit
  • Exmo
  • Poloniex
  • Kraken

Note that some exchanges also support using Bitcoin as a payment method. If you have the Bitcoin to do so, you may find that this is the cheapest way to acquire Ripple cryptocurrency.

Using Your Wallet

Note that the XRP that you buy is not sent directly to your wallet. The coins stay in the confines of the exchange you used until you move them to your wallet. Note that coins that reside on the exchange are beyond your control, considering that you don’t have the private keys for them. Getting the coins into your wallet is the true final step required to complete your purchase.

Feasibility

While Ripple seems promising, it is still a cryptocurrency. These currencies have shown much promise over the past decade, but it’s still way too early to assess the likelihood of the entire industry crashing.

Is Crypto Coming to a Phone Near You?

With all the talk of cryptocurrency hitting mainstream projects, such as Bakkt’s launch of crypto-related products for use at chains like Starbucks, crypto is seeing integration in more and more common places. In conjunction with this trend, some major smartphone players have made announcements regarding the integration of crypto into the hardware of their phones. While the Bitcoin price has risen in 2019 regardless of mass mainstream adoption, the joining of forces between the world of crypto and major phone producers may play a large role in accelerating the adoption rate of crypto in the coming years. 

Integration with Native Apps

Just like you might manage your finances on your phone through apps like Chase Mobile, Mint, or another preferred provider, cryptocurrency apps offer the same opportunity.  Whether you’re putting money into crypto as a long-term investment, buttressing your savings habits by investing extra cash regularly into cryptocurrency, or staking your stablecoins or other funds for the interest earned, having an app on your phone to handle the task makes the whole business infinitely easier. With crypto, like any other app, you can download many of the apps necessary to interact with crypto from the Apple AppStore or Google Play Store. However, smartphone manufacturers like Samsung have decided to make their phones with crypto capabilities coming standard at purchase. 

Samsung’s Move Into Crypto

Samsung accounts for roughly twenty percent of global smartphone sales. Selling almost 300 million phones just last year, its recently launched smartphone models S20, S20+, and S20 Ultra support blockchain and cryptocurrency transactions with a built-in crypto wallet. Touting on their website the security of the wallet through their proprietary Knox platform, Samsung’s new line of phones include support not only for Bitcoin, but also for smart-contract platform Ethereum, and many of the “ERC-20” tokens that comprise the majority of other crypto offerings – from collectible, non-fungible tokens, to utility tokens, and almost all other assets that are tradeable on the blockchain. Additionally, Samsung is also incorporating support for decentralized applications. 

Decentralized applications – or “dApps,” for short – are apps that function just like the other, centralized apps on your phone that come from the Apple AppStore or Google Play. They can include games, finance apps, or any other array of tools and entertainment. However, because they run on a distributed computing system, rather than in a centralized location, they require a different type of app store to use. More and more apps are being built on distributed networks, and Samsung has clarified that they seek to be at the forefront of development when it comes to the “fairness, security, and transparency” that decentralized systems can offer. While games are leading the pack in dApp creation at a rapid clip, Samsung also sees value in blockchain applications across multiple industries, such as finance, medicine, and real estate, as well as other types of entertainment.

Why is integration important?

One of the risks of crypto has long been leaving one’s funds on an exchange, where trust is relegated to the exchange and dependent upon the merits of those running the exchange, as well as the solidity of the exchange’s own security. Additionally, exchanges traditionally tend to be more frequent targets for hacks or other security breaches. This is owing to the volume of people who may have access to sensitive information – as well the sheer volume of funds being held, offering a significant payoff for anyone who may manage to breach their systems. By having an individual wallet with funds stored by a single user, sensitive information is kept private. Likewise, the targets of a potential hack become greater in number, with each one holding fewer funds, making the payoff for a single hack less appealing. “Not your keys, not your coins,” is a common mantra in the cryptocurrency world, and its implication is that, if you’re not in control of your own security, you don’t know what might happen to your funds. Samsung, with their built-in wallet, aims to give its smartphone users that control.

Expanding Integration

Samsung is not alone. Smartphone maker HTC has also already launched its Exodus 1 with blockchain integration, and includes even greater crypto capabilities – such as running a Bitcoin node straight from the phone – in its Exodus 1s model, which hit markets in October of last year. Apple, meanwhile, has launched a “CryptoKit” for developers to use in conjunction with its upcoming operating system, iOS 13. Just before the company’s highly anticipated iPhone 11 launch, Apple executive Jennifer Bailey, vice president of Apple Pay, touted cryptocurrency as having “interesting long-term potential.” LG, lastly, has applied for a trademark of the “ThinQ Wallet” as of July, an app whose filing documents purport its purpose would be to facilitate financial transactions, including crypto settlements. 

While smartphone behemoth Samsung has already taken its first steps into the crypto world by integrating native tools for interacting with dApps, trading tokens, and using cryptocurrency, other major players like Apple may not be far behind. Meanwhile, the current AppStore and Google Play hubs already support a large number of crypto offerings, despite the insistence by some that cryptocurrency is simply a passing fad. As cryptocurrency and crypto assets develop into the future, and with groundwork being laid across the board for crypto innovation, it may be very likely that the next time you upgrade to the latest smartphone, you’ll find some interesting new options. 


Quick-read guide to some of the terms in this article:

ERC-20: The “model number” that describes the format on which most non-fungible tokens, as well as a large majority of all other tradeable tokens, are built. 

Non-fungible token: NFTs represent digital collectible items whose ownership is recorded on the blockchain, from trading cards to digital real estate and more.

Utility token: A token that offers access to a specific provider’s products or services, much like how credit on a store card functions at a retailer (as one example).

dApp (Decentralized Application): An app that functions similarly to an app of any kind from the Apple AppStore or Google Play, but that runs on a distributed, rather than centralized, network. 

The New Collecting Craze: What Is the Non-Fungible Token Market?

You may not have heard about non-fungible tokens, per say, but it’s possible you did hear once upon a time some crazy story in the news about someone paying a ridiculous amount of money for a digital cat – or “Cryptokitty.” The Cryptokitty market blew up near the end of 2017, with what appeared to simply be little digital cat drawings selling for as high as $110,000 and mainstream news lambasting the “Cryptokitty bubble.” However, the Cryptokitty craze, while Cryptokitties were not the first group of non-fungible tokens (NFTs), did bring NFTs into the light.  

So what exactly is a non-fungible token, and why is it cool?

“Non-fungible” makes something actually quite simple sound complicated. Fungibility, for example, is – well, first and foremost, the opposite of non-fungible – but beyond that, it’s the property that makes something interchangeable. Money is fungible. If you have a five-dollar bill, you can exchange that for my five-dollar bill, and your new five-dollar bill will work the same way as the one you just swapped to me. They’re exchangeable, interchangeable, or fungible.  Most of the other stuff you have – your phone, your house, your real-life cat, or your sibling, for example – are non-fungible, meaning they’re unique. They’re special, and they’re not interchangeable. You can’t just swap out one for another.

These are examples of things that are non-fungible, and in a more true-to-life example, they could describe things such as artwork, collectible cars, or trading cards. The only difference on the blockchain is that (at the current moment) most of the things you can purchase are digital – like digital cats. But like a card trading game, since the blockchain allows you unique ownership of your unique kitty, Cryptokitties were also traded, “bred” to make new cats, and a host of other activities (like buying accessories for your cat) that grew into popularity just like they might in real life (let’s remember Beanie Babies, shall we?) The only difference is the whole shenanigan is played out on the internet. So besides blockchain allowing undisputable ownership (more on that here for curious minds) of whatever your obsession of choice is, the digital properties of the items themselves allow for an almost infinite host of offshoots and opportunities when it comes to what you can do with your stuff, not the least of which becomes the potential to sell it in the event your item becomes popular.  

A Little History of NFTs

NFTs didn’t begin with Cryptokitties. It actually started with what were called “colored coins” on the Bitcoin network. At that time, a coin could be “colored” with a little bit of extra metadata that made it unique, turning it into a token that could represent whatever it was labeled to identify – from a share in a new project to a physical vehicle or anything else the creator wanted it to represent. Pieces of digital art depicting some of the cryptoverse’s favorite characters were some of the first items to be represented by colored coins, and traded amongst enthusiasts as such, on eBay and even at a live auction in New York.  Later, the first NFT based on the Ethereum network hit the scene. CryptoPunks, built by a couple of talented developers, offered 10,000 unique digital characters that could be traded on the blockchain, and while thousands of NFTs have arrived online since CryptoPunk’s inception pre-Cryptokitties, they’re still considered some of the first real original – and now “antique” – NFTs on the market.  

NFTs Today

The NFT market today, while somewhat hard to pin an exact amount on, does roughly two to three million or so in sales per month.  Through sites like OpenSea, Worldwide Asset eXchange (WAX), and others, users are trading everything from digital land in virtual worlds to digital art and trading cards. The largest use of NFTs today, meanwhile, is so far in gaming. Character “wearables” like cool shades or hats, or special items like unique weapons, can sell for a pretty penny on the NFT market. My Crypto Heroes, a role-playing game that has a massive number of in-game items easily transferable to the secondary NFT market, did almost two million in sales in the second half of 2019. With the option to play the game as a farmer, a trader, or a warrior, any character can find and earn items that can be transferred out of the game for potential sale in real-world money (if the owner chooses to do so).

Trading card games, meanwhile, have been a natural fit for the transition to non-fungible tokens. Simply moving card trading and gaming online, ownership and transfer of cards are recorded on the blockchain, with – just like real life – rare, powerful, and simply super cool cards selling for more and those with less rarity or not as cool selling for less. NFTs are a collector’s dream, with a worldwide marketplace for a savvy seller’s wares, as well as a virtually infinite number of items to choose from. Sites even exist to make your own NFT, and some businesses have used them to give away unique swag items at events and conferences (all transferable online). 

Virtual worlds, like Decentraland and Cryptovoxels, extensively utilize NFTs. With virtual districts inside them for shopping, socializing, gaming, and more, non-fungible tokens identify ownership of everything inside the worlds, from avatars to land and art. What makes the markets different from say, SecondLife, is that, while you might have been able to find a buyer for your Linden dollars (the currency of SecondLife), exchanges around the world already are in place for easily onboarding and off-ramping digital to fiat currency, and the cryptocurrencies used to buy and sell these NFTs are used extensively across multiple platforms. The third-largest NFT asset class by market size is naming services. Just like you would own a domain name like “Iamsupercool.com,” the Ethereum Name Service, which launched in 2017, offers decentralized domain names on the Ethereum blockchain. Shortly after launch, ENS Domains had about 170,000 ETH (or, by today’s count, over 44 million dollars) in names claimed. Other ventures like the “.crypto” domain came along shortly after, backed by venture capital, and, just like any other NFT, the names can be bought and sold at will through the online markets.  

The future of NFTs is bright. Some even expect it will be a ten-plus billion dollar market.  Meanwhile, with the price of certain Beanie Babies alone selling for over five thousand dollars at the height of their craze (and some people still wishfully listing prices like half a million on eBay), it’s not hard to imagine that it’s possible with a market with infinitely greater use cases. Gaming, for example, is already a multi-billion dollar market by itself, outside of the potential applications of virtual reality worlds, and the benefits of indisputably identifying ownership of rare items like art on-chain, all of which fall under the NFT umbrella. And while not all projects succeed, or have sternly serious, professional use cases – Cheese Wizards, with your pasteurized and unpasteurized wizards, I’m looking at you – the world of NFTs will no doubt be a formidable market to be taken quite seriously indeed.

Is Cryptocurrency the Money of the Future?

With the rise of a new technological era comes a flurry of curiosity, questions, speculation, and even suspicion.  Cryptocurrency, while it has in fact been around for more than a decade already, still feels new and scary to a lot of people, with many writing it off as a fad.  However, as the trend continues and businesses, banks, and even governments begin to recognize the value of cryptocurrencies as legal tender, they are laying extensive groundwork to shift their payment patterns to accommodate crypto and digital payments.  Amongst the rush to cover the latest developments and posit each’s opinions on the state of the digital money world, one of the world’s largest banks has come out with a three-part report on their own take regarding crypto. Deutsche Bank, a global multinational and financial services company, discusses what they see in the future of cryptocurrency by taking a look at the past, present, and future of the payments industry.  Here’s what they have to say.

Part 1: Will Cash Remain King?

Even Deutsche has acknowledged the eminence of digital payments.  Entitled “The Dinosaur Will Survive…For Now,” Deutsche highlights the development of a less-cash (not entirely cashless) society as a positive development straight off the bat.  Citing the natural evolution of payments over the last century, from cash and checks to credit cards, Deutsche suggests the next step in evolution for mobile payments will be to digital currencies.  From early days using barter as commerce to the time when cash became king, payment systems have developed alongside society and technology as more efficient systems evolved. While people still tend to prefer cash in times of crisis – the tangible effect of paper money implying somewhat of a sense of security – the rapidity of settlements and cost efficiency of cryptocurrencies make them appealing to businesses and governments as well as individuals.  In the past, for example, a corporation may have had to wait up to 70 days to receive payment from a business due to inefficient internal processes. For consumers, people can track their spending easier, faster, and with fewer cards to keep track of, essentially cutting out the middleman. Governments, perhaps ironically (considering the large amount of hubbub surrounding the implication that cryptocurrency is used for illicit purposes), also have an interest in pursuing the elimination of cash, as digital currencies actually reduce the potential for criminal use.  Large notes, such as the EUR 500 note, have already been taken out of circulation, while in 2016 the article “Time to Kill the $100 Bill” was penned by Lawrence H. Summers, a former United States Treasury Secretary, for this very same reason.  

Part 2: Moving to Digital and the Extinction of Plastic

Rather than suggesting that digital currencies spell the end of an era for cash, Deutsche Bank takes the angle that cryptocurrencies may mean the end for plastic cards.  Eliminating the need for a third party (as well as most of their fees), cryptocurrencies make good business sense and fintech companies are rapidly filling the gap. Advancing faster in developed countries, the adoption of cryptocurrencies and the use of e-wallets, according to Deutsche, is expected to cause digital transactions to become a preferred method of payment by 2025.  Meanwhile, the growth of the payments industry and the participation of global tech giants has spurred a payments revolution that has doubled over the last ten years, reaching almost two trillion today and expected to continue into the future. Beyond convenience and efficiency, the use of digital payments also allows businesses to interact more with their customers, tracking consumer engagement more readily and providing valuable data – the “new gold” – to businesses about their customers purchasing habits and preferences.  Citing the now-defunct criticism of the smartphone upon its first arrival, Deutsche points to payment systems like AliPay and ApplePay that have become increasingly popular across the globe in recent years. While the United States lags behind other countries like China in adoption, trends globally suggest that the future will see more and more of money going digital.

Part 3: The Keys to the Financial Kingdom

Nobel Prize winning economist Milton Friedman stated in 1999 that the internet – a powerful tool for “reducing the role of government,” – would take on new life with the development of “a reliable e-cash.”  Deutsche, meanwhile, puts that timeline in the short term, with their prediction that a digital currency could become mainstream as soon as the next two years. Spotlighting Facebook’s Libra currency – which has come under intense regulatory scrutiny, faced avid criticism from around the globe, and been labeled as a threat to monetary stability – along with China’s planned national digital currency as lead contenders, the report highlights how the race to digital payments is molding the global balance of power.  Suggesting that digital currencies become more appealing when backed by a central power such as a government, Deutsche expects to see potentially two hundred million blockchain wallet users by 2030. The development of central bank stablecoins could also help make digital currencies less volatile, while providing governments with a form of tender that would reduce identity theft and other forms of fraud.  The development of China’s digital renminbi, meanwhile, has significant implications for multinational corporations in global trade, with the race to capture and tame the digital currency market prompting adaptation as a necessity to remain relevant in a rapidly evolving financial environment.  

Among many others moving towards a digital future, Deutsche is also of the mind that “our twentieth-century payments system needs to be upgraded and digitized.”  While cryptocurrencies still face hurdles – such as forming cohesive regulation, stabilizing prices, and considering the energy consumption necessary to produce them – the benefits of using digital money suggest that the prospect of using cash in the twenty-first century does seem dim.  Despite being in the early stages, the developments of the next few years will be integral in shaping the new monetary order in global payments systems, and the conclusion, according to Deutsche Bank, is emphatically that the future of cash is indeed digital.  

To read the full report, go here:

Part I: Cash: The Dinosaur Will Survive… For Now

Part II: Moving To Digital Wallets And The Extinction Of Plastic Cards

Part III: Digital Currencies: The Ultimate Hard Power Tool

“How To Crypto” – Part Three: Keeping Your Account Secure

This article is one of a three-part series on the basics of getting started in crypto. To read from the beginning, visit Part One here.

One of the reasons crypto is unique, as well as advantageous over traditional money, is its speed and efficiency.  It doesn’t require an intermediary, and transactions take place often over minutes or even seconds. Another distinction of cryptocurrencies is that they’re largely anonymous.  Outside of exchanges or certain on-ramps that might require KYC (Know-Your-Customer procedures), crypto itself is essentially set up to allow parties to send and receive funds without having to disclose any personal information.  These are two of the things that draw people to crypto, at the same time that they are also the reason you need to be extra vigilant with your crypto funds.  

In the traditional system, it’s possible that someone could steal your password or other personal information and be able to access your account.  They might even be able to transfer funds. The catch, however, is that anyone attempting to steal your funds will still have to input a traditional receiving account – and this account will have a name, address, and other personal information attached to it that creates a trail authorities can follow in order to find the offending party.  Even in the event of a transaction such as a wire transfer, where funds are automatically sent without waiting periods, the possibility still remains that the transaction, if discovered to be fraudulent, may be able to be reversed. The traditional banking system, with all its checks and balances, is a large part of what makes it slower than using crypto, but also what makes it more secure.  

In the crypto ecosystem, once your funds are sent – they’re sent.  If someone has managed to get into your account, by either cracking your password or hacking in some other way, your funds are gone the second they’re sent from your wallet, as no third party is there to intervene.  Likewise, discovering the identity of the address they were sent to will also be virtually impossible. (Again, while some of the large exchanges can identify stolen funds, this is a unique circumstance that usually applies only in connection to large events, such as a hack from another exchange, and does not occur regularly with individual account breaches.)  So what’s the best way to protect yourself, since you’re responsible for your own account security? 

What to Do If Your Funds Are on an Exchange

There are multiple levels of personal account security that are available on exchanges, depending on which exchange you use.  We’ll go over some of the most generally available ones, and you can find in your account – usually in some form of “Security” section in your account settings – which ones are available to you.  It’s important to keep in mind as well that you can usually put into place multiple layers of security – so whichever forms your exchange offers, it’s best to use as many as you can.  

First and Foremost: Your Login Information

It goes without saying that you need to create a strong password.  However, the aspect you may not have considered is to not only use a strong password, but use one that you only use on the exchange and nowhere else.  This is because in the event that your passwords elsewhere get compromised – as they often do these days – the hacker of that site won’t automatically get the password for your funds as well.  Along the same lines, you should use an email address that is unique to your crypto account. Creating a new one is easy, and having an email that is only used for your crypto funds protects you in the same way as having a unique password.  Not having it out there anywhere else on the internet minimizes your chances of it being acquired without your knowledge. One note: you’ll want to make sure you have a copy of your new information so you don’t make your exchange account or new email account (which will receive messages from the exchange that you may need) secure from yourself by forgetting what unique password or email you used.  Just remember to keep copies of sensitive information somewhere secure (offline is best).     

2FA

2FA stands for two-factor authentication.  Without going into exactly how it works, the point is that it protects your account by generating a one-time code that only you have access to in order for the exchange to verify the person trying to log in is really you.  It comes in the form of an app, and most people use Google Authenticator or Authy, though there are other forms out there as well that also work fine. You can download the app to the same device you use to access the exchange, or another device if you have one – which, if you do, puts an extra degree of separation between your account and the tools needed to access that account.  2FA requires the times of your devices to be the same to work properly, so if you use another device, just make sure the clocks on both are correct. While doing two-factor authentication via SMS is an option, using an app is more secure. There are, though fairly uncommon, ways for hackers to access your phone number (and thus texts), which just makes it one risk you don’t need to take when there are other easy options.   

Whitelisting Addresses

As we mentioned earlier, crypto funds are always sent to an address.  While there’s really no way to recover funds after they’ve gone, there is a way to restrict the addresses to which they can go in the first place.  Called “whitelisting,” it’s where you designate what addresses are approved for withdrawals. It has similarities with whitelisting an email address, in that you’re telling the provider (or, in this case, the exchange) what addresses you specifically consider safe.  Adding whitelisted addresses will require you to verify them through your email, 2FA, or both, and will sometimes even have a waiting period before new addresses can be used, adding an extra layer of security (and an added deterrent) in the event that an unauthorized person were to also try to whitelist an address.  

A Bit About Mobile Wallets

Some of the same features offered on exchanges can also be implemented on mobile wallets, such as 2FA.  Meanwhile, like a strong password, the PIN you designate for your mobile wallet should be unique to your wallet and not used elsewhere.  Since your funds are theoretically stored “in” your device, however, your phone’s security itself also becomes an important part of protecting your account when using mobile wallets.  Ensuring you have a strong pin on your phone itself in addition to other security measures, such as enabling remote lock or even remote wiping of your phone, can help protect your wallet from unauthorized access (and the subsequent sending of your funds) in the unfortunate event your phone is lost or stolen.  As with the importance of remembering your login information on exchanges, with mobile wallets the essential thing to always have stored somewhere secure is your recovery seed. This is how you can recover your wallet and your funds if you ever lose access to your device.

This list is not exhaustive.  However, these options, in addition to others you may find in your security settings, are some of the first and best security measures you’ll want to take to protect your account from unauthorized access.  Crypto is a seamless and efficient way of transacting, investing, and sending money that will likely be a large part of the future. As with any new endeavor, like driving a car or learning to swim, understanding personal account security and how to keep your funds – and thus yourself – safe is an important step as you dive into the exciting new world of cryptocurrency.