With all the different options available in the cryptocurrency market, it’s difficult to understand why many people seem to think that Bitcoin is the only coin worth investing in. There are so many interesting projects in crypto, and limiting yourself to Bitcoin means that you could be missing out on smaller coins with more room for growth. There are also flaws with Bitcoin that could lead it to lose market shares to coins that perform the same functions better in the future. Let’s take a look at some of the coins you should be paying attention to besides Bitcoin.
Ethereum, or Ether, should we say, is the second cryptocurrency in the market in terms of market cap and one every serious crypto investor should have in their wallet. Ether is very different from Bitcoin, however. It was never meant to be purely transactional; it was supposed to be used as a tool for developers to power decentralised apps on Ethereum’s proprietary and very robust blockchain.
This blockchain can be used to power apps of all sorts, like games, but it can also be used for the settlement of smart contracts. Even altcoins have been launched on the blockchain, which means that Ether is likely to increase in value as more altcoins are released.
These are all things that make Ether very interesting as an investment. One of the biggest points in this token’s favor is the strong use case. The fact that Ether is necessary to use Ethereum’s network means that there will likely always be a baseline demand for it. This is why you need at least some in your portfolio.
Litecoin is a very interesting coin everyone should take a look at. Unlike Ether, Litecoin is a bona fide transactional cryptocurrency just like Bitcoin. It actually diverged from Bitcoin to form what is referred to as a hard fork. This is when radical changes are made to the protocol forcing computers in the network to update and making all transactions and blocks before it invalid.
Litecoin is often referred to as the silver to Bitcoin’s gold, but they’re pretty different in many aspects. The main one is that blocks are created much faster on the Litecoin blockchain. This allows it to manage more transactions per second, which was one of the biggest issues with Bitcoin. This means that Litecoin could eventually start getting higher adoption rates as people start to see how much better it is as a transactional tool. It still, however, doesn’t have the same name recognition as Bitcoin which has been a deterrent to mass adoption.
Another obstacle to mass adoption for crypto, in general, is how they’re being perceived by the tax system. Cryptocurrencies are still not viewed as legal tender in the country, and simply exchanging crypto can be viewed as a taxable event, even a business transaction. So, before you invest and start exchanging coins, we suggest you check out Wealthsimple. They have an informative article that explains everything you need to know about crypto tax in Canada. It will teach you which taxes you’re liable to pay, the differences between capital gains and revenue taxes, and why exchanging coins can sometimes count as a business transaction.
Tether is a very interesting coin, but it’s largely different from all the other crypto on this list. Tether is not a transactional coin or a coin that is meant to operate on a platform. Tether is what is called a stablecoin, and this is a term you’ll need to get very familiar with when trading in crypto.
Stablecoins are cryptocurrencies that are meant to follow the movement of more stable assets, like the US dollar, for instance. This is why most cryptocurrencies go up and down while these coins will hardly move. Some people may be asking themselves why they should be investing in a coin that doesn’t move. The reason for this is that it keeps your crypto assets more liquid and gives you ready access to the market without having to deal with the wild fluctuations.
You may not know this, but many exchanges make it either impossible or difficult to trade fiat for crypto, but almost all of them accept Tether. This means that you can have the same stability as the US dollar, but be able to quickly trade crypto on virtually any exchange without issues. This is why you should consider having at least some in your wallet.
Ripple, or XRP, is also very different from most other coins. While cryptos usually try to be disruptive and go against legacy systems, XRP was meant to work with them. The company behind the XRP token and the Ripple network, Ripple, wanted to facilitate the transfer of money between banks and international remittances.
With the SWIFT network, international transfers can take up to 10 days while these same transactions can be completed in mere seconds on Ripple’s. Another thing that makes Ripple a bit different is that the blockchain is not completely decentralised. This means that the owners still and will probably always remain some level of control. This may not be as democratic, but that also means that they can apply measures to restrict or expand the supply of coins and stabilise the coin when needed.
XRP is also one of the few cryptocurrencies out there with a proven use case. Ripple already struck agreements with banks and money transfer companies, and we can expect to see more as it gains more recognition.
Cardano is a name you’ll hear often in crypto circles. It’s one of the preferred altcoins for many reasons. One of them is that it has a true potential for disruption. Cardano’s primary use is the settlement of smart contracts, which means that Cardano can be used to do much more than perform transactions or be used as a simple store of value. It can also be used to denote ownership in assets and facilitate transfer without having to resort to a third party.
However, one of Cardano’s biggest assets is its network and protocol. You may not know about this, but Bitcoin and other cryptocurrencies are attracting the ire of environmentalists because of the massive amounts of energy they consume. One of Cardano’s first goals was to create a cryptocurrency that doesn’t require as much energy by using proof-of-stake technology instead of proof-of-work.
Cardano is a cryptocurrency that should be on everyone’s radar because of its potential for real-life usage. It could also start gaining market shares as it presents itself as the eco-friendly cryptocurrency.
While Ethereum remains the most popular project of its kind, it’s not the only one. You’ll hear a lot about “Ethereum killers” out there, but few come as close as Polkadot. Polkadot originated from a conflict between Ethereum leaders. A group then decided to break out and create a product that would rival Ethereum. They made some significant improvements to their network, such as having multiple lanes for transactions. Ethereum only has one lane, which has been the cause of some bottlenecks and major issues with the network.
Developers also wanted to protect this coin from speculation so it can accomplish its true function, and that is to power apps on its network. That’s why actual investors are much more involved in the governance of the coin.
The only risk about investing in Polkadot is its short history. The network’s founder, Gavin Wood, introduced the whitepaper in 2016 and released the coin in 2020. This makes it very difficult to make historical comparisons.
Golem is by far one of the most interesting projects on this list and one you should definitely look at. Golem might have the strongest use case too, and may serve as a model for other cryptocurrencies. Golem allows users to rent the computing power of its massive network. The goal of the Golem team is to create a decentralised supercomputer that everyone from the everyday user to big companies will be able to use to perform tasks. They also have very lofty goals and aim to become competitors to other major cloud providers such as Amazon, IBM, and Google.
Golem’s strong use case and respected development team are two reasons why everyone should own at least a few. Coins with a strong use case are less vulnerable to speculation and have intrinsic value, which is something Bitcoin doesn’t have. And, if you or your business happens to perform tasks that require heavy computing power, like CGI rendering, for instance, nothing is stopping you from using the token like it was intended to.
Stellar is another interesting project worth mentioning. Stellar tries to be a bridge between banks and cryptocurrency, pushing many to call it the PayPal of cryptocurrency. The only issue with Stellar and other cryptocurrencies that cater to a niche need is that competitors with greater resources and networks could try to replicate them. While there isn’t one on the horizon that can compete with what Stellar is doing yet, it’s still something you need to think about.
These are just some of the coins you should consider investing in besides Bitcoin. While it’s a great coin, there are many out there that have a promising future, so do as you would with any other investment and use diversification to your advantage.
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