Currently, there are many cryptocurrencies available for use and investment. In fact, as of April 2018, the number of cryptocurrencies available over the internet was over 1,570 and the number keeps on growing fast. Although all these currencies promise a good return, the fact still remains that not all cryptocurrencies available on the market are good for investment. If you invest in some, you will get good returns while if you invest in others, you will make will make no profit or in some instance generate a loss. So the big question is what the best cryptocurrency for the long-term investment? In this article, we are going to give an overview of major cryptocurrencies available as well as an insight on which is best suited for long-term investment and why.
The Major Cryptocurrency Types
With a current market cap of over USD 65 billion, Bitcoin is with do doubt the undisputed champion in the cryptocurrency industry. Through the Blockchain, Bitcoin provides decentralized peer to peer electronic cash system. Although Bitcoin is a property, it is behaves like a financial asset. Bitcoin is a property because it is a nonphysical asset whose value is obtained from a contractual claim. Although Bitcoin is not a physical asset, it does not represent any contractual claim meaning that it is not a liability. That is why this cryptocurrency is usually compared to gold. Bitcoin value is derived from people’s perception as a good alternative to Fiat currencies. This means that even if Bitcoin technology is dismissed today, its fixed maximum supply means that they will retain their value. Currently, Bitcoin is the most obvious choice for most investors and traders because it is the most liquid cryptocurrency and can be sold, bought or traded in many platforms than any other alternative.
Ethereum is the second largest cryptocurrency. It was created a by a Bitcoin programmer and went live in 2015. As of September 2018, the market cap for Ethereum was USD 36 billion, meaning that it is half the size of Bitcoin. Currently, Ethereum is accepted as means of payment by few commercial organizations and retail outlets. Ethereum is a decentralized platform that enables distributed application and smart contracts to be created and run without fraud, downtime or being interfered with by a third party. Applications on Ethereum run on specific cryptographic token known as ether. Ether can actually be compared to a moving vehicle that operate around the Ethereum platform. Ethereum is considered a king of Blockchain as a service. Just like Bitcoin, Ethereum provides decentralized peer to peer electronic cash system and allows the creation of smart contracts. However, unlike Bitcoin, Ethereum actually allows developers to create and install decentralized applications like Ethereum based decentralized Facebook.
Bitcoin cash was created in 2017 and is an offshoot of Bitcoin. This cryptocurrency was created because of tension between individuals who proffered Bitcoin as a store of value to those who preferred it as a means of exchange. Some miners also wanted a limit to be raised so as to increase transaction time. As a result, a new cryptocurrency known as Bitcoin cash was created. As of September 2017, Bitcoin cash market cap was slightly over USD 9.8 billion which translated to about 1/8 of Bitcoin. This cryptocurrency is more useful to individuals who do a lot of fast business transaction as well as those who derive their income from cyptocurrencies. Since the split, the price of Bitcoin has risen significantly.
With a market cap of over $9 billion as at September 2017, Ripple is the fourth largest cryptocurrency. This cryptocurrency has been in existence since 2012 but its development started 8 years prior. Ripple is quite different from Etheruem and Bitcoin and feature a more corporate image. It is a decentralized network system that is verified by consensus as opposed to straightforward cryptocurrency. Ripple is widely used by banks because they see it as a more secure than other cryptocurrencies. The adoption of this currency by banks as well as its flexibility has attracted the interest of many investors who project that it will dominate the market in future and even overtake Etheruem and Bitcoin.
Litecoin is the 5th largest cryptocurrency. As at September 2017, Litecoin had a market cap of USD 3.4 billion. Litecoin was released in 2011 and is an offshoot of Bitcoin. It is nearly identical to Bitcoin the only difference being that it has a faster processing speed.
Which cryptocurrency is best suited for long-term investment and why?
Bitcoin. Bitcoin is currently the biggest and most popular cryptocurrency and there is a good reason for that. It currently hold 40% of the total cryptocurrency market cap. It is also the most liquid cryptocurrency on the market and can be traded on many platforms than other cyptocurrencies. It is also accepted by most retail outlets than any other cryptocurrency. Bitcoin mining involves very complex advanced coding and enormous computing power. As a result, it is very hard to copy and hence stable. Considering all these factors, Bitcoin is with no doubt the best suited for long-term investment.