Understanding blockchain assets can be a difficult task, especially if there are over 2,000 of them. Fortunately, there are categories in which they fall. We can learn these assets, also called as cryptocurrencies, by categorizing them. We can then understand the types of cryptocurrency on their basis.
The majority of crypto assets fall in the following categories:
- Utility Tokens
- Privacy Coins
- Blockchain Economies
- Payment Currencies
Unlike digital assets, whose values fluctuate greatly, the prices of these assets remain constant. Therefore, these kinds of assets are the most common among traders. The methods for stabilizing the assets vary from coin to coin. The examples of these coins include Dai, Tether, Gemini, Paxos, etc.
The digital tokens that are utilized for a service or product based on blockchain are called utility tokens. Examples are Civic, 0x, OmiseGo, Basic Attention Token, etc.
Privacy is focused on while creating certain digital assets. In transactions of these, only the receiver and sender are aware of the number of coins that are transacted. For example- Monero, PIVX, ZCash, etc.
The functionality of blockchain technology is taken further than simply payments by blockchain economies. These allow an individual to create their own digital assets, decentralize applications, etc. Instances include Ethereum, Tron, NEO, EOS, etc.
The assets that are majorly for payments are called as payment currencies. One can use these currencies to pay their bills, for goods and services, etc.
In particular, Bitcoin Cash, Litecoin, and Bitcoin are among the well-known cryptocurrencies that are used as Payment Currencies.
Best types of cryptocurrency to invest in this year
In case you have heard of only one of all types of cryptocurrency, then it would perhaps be Bitcoin (BTC). The biggest cryptocurrency, it has around 40% shares in the total market of cryptocurrency. Because it is the oldest, since 2009, it dominates the market. Therefore, if it continues to augment the way it did a couple of years ago then investing in this cryptocurrency would be the best idea for this year.
However, if you are still looking for another cryptocurrency, the following is a list of the best types of cryptocurrencies that you can invest in:
By the end of 2018, the price of this cryptocurrency was slightly higher than $720. Whereas, at the beginning of the same year, Ethereum climbed to reach its highest price on January 4 – it was worth $1423! It evolved by 3000% two years ago and became the second biggest cryptocurrency after Bitcoin.
XRP or Ripple used to be one of the best performing cryptocurrencies in 2017 – it grew by 36,000%. The price began from almost $0 and reached $2.4 by the end of that year. However, like all other types of cryptocurrency, the price of this one has also decreased.
The list of the best types of cryptocurrency is incomplete without Litecoin. Similar to Ripple, this cryptocurrency portrayed a tremendous growth of 8000% in 2017. Launched in 2011, this cryptocurrency is named as ‘silver to Bitcoin’s gold’.
This cryptocurrency offers selective transparency and privacy of transactions. Therefore, like https, it claims to give additional privacy or security where all transactions are recorded and published on a blockchain. Nonetheless, the details like amount, recipient, and sender remain private.
An untraceable, private, and secure currency, this open-source cryptocurrency was launched in April 2014. Soon after its launch, it spiked rapidly at great interests among the enthusiasts and cryptography community.
Launched last year, EOS is one of the newest digital currencies. Since this cryptocurrency is also designed posterior Ethereum, it offers a platform on which the developers can build decentralized applications.
Why Make Long-Term Investments?
- You heartily believe in the future of cryptocurrency
- You believe that certain cryptocurrencies will provide a better return in the long-run
- Long-term investing will help in making your life easier since you will not be required to keep an eye on the market all the time.
Bitcoin still continues to lead the pack of cryptocurrencies in terms of popularity, user base, and market capitalization. However, virtual currencies like ripple and Ethereum are becoming popular since they are being utilized more for enterprise solutions. Going by the present trend, cryptocurrencies are here to stay but how many of these will develop, as leaders among the growing population within space will only be revealed by time.
While cryptocurrencies can provide you with great profits, it is always best to keep yourself prepared for a loss. Always remember that your predictions are not always going to be right.
The best advice that the expert cryptocurrency investors give is that one should invest only that much amount of money as much they are not afraid to lose.
We wish that, by now, you would have understood and decided that which among all types of cryptocurrency you would prefer to invest in.
If the concept of cryptocurrency confuses you there are many blogs online that can help you learn more about what a cryptocurrency is.