Cryptocurrencies are a relatively new phenomenon but they have quickly become one of the most talked about financial markets. These digital currencies are not backed by any government or central bank and instead rely on cryptography to secure transactions and validate digital balances. There are many benefits to using cryptocurrency. One of the biggest is that they’re decentralized and can be traded without interference from a third party. This means that you don’t have to pay anyone else to buy your coins, which decreases their risk of being stolen.
Cryptocurrencies also offer anonymity, which might appeal to those who do not want their financial activity monitored by third parties. Furthermore, cryptocurrencies can act as a medium of exchange that is fast, cheap, and easy to transfer between different locations without needing a central intermediary like a bank or other financial institution. Finally, because no specific authority backs them they’re more resistant to inflation than traditional currencies would be over time if demand for them remains stable (or so goes the theory). Read on for our list of the top 5 cryptocurrencies by market cap
Bitcoin
Bitcoin is the oldest and most established cryptocurrency. In the early days, investors flocked to the digital currency because it was new and had the potential to disrupt the financial system like no other asset had done before. Bitcoin was specifically created to be an unregulated and decentralized currency that is not controlled by any government or outside entity. It allows people to send money to each other without the need for a third party like a bank or financial institution. Since its inception in 2009, Bitcoin has maintained its place as the biggest cryptocurrency by market cap.
Ethereum
Ethereum is another cryptocurrency that has been around since the early days of Bitcoin. It was originally launched with the aim of competing with Bitcoin and quickly grew to become the second most valuable cryptocurrency by market cap. Ethereum offers a decentralized platform for developers to create decentralized applications and programmatic contracts that are verified and processed using smart contracts. It also uses an underlying blockchain network to allow people to exchange money, buy goods, and perform other financial activities without the need of a third party like a bank or financial institution. Unlike Bitcoin, Ethereum has a vibrant community of developers and investors who are continually innovating and improving the functionality of the network.
Ripple
Ripple is one of the newer cryptocurrencies on the block and has become increasingly popular over the past couple of years. Originally launched in 2013 as XRP, it was rebranded to Ripple in 2015. Like Ethereum, Ripple is a fully functional decentralized digital asset platform that allows people to send money to each other without the use of a third party like a bank or financial institution. The Ripple network utilizes its own native digital asset called “XRP” which powers its distributed financial network. At the moment, Ripple is in the top 10 cryptocurrencies by market cap and is one of the most widely used digital assets in the world.
NEO
NEO is one of the newer cryptocurrencies that was launched in 2017 following a digital asset “ crowdsale ” that raised $5 billion worth of cryptocurrencies. Like most cryptocurrencies NEO is decentralized and blockchain based. What makes it stand out from the other digital assets is that the blockchain software is open source and is designed to be used for a variety of applications including digital identity, contracts, and commerce. NEO can also be used to issue and manage digital assets such as financial contracts, property titles, financial services, and other things. The NEO network also has its own native digital asset called “GAS” that is used for paying for transactions on the network and holding to power the smart contracts being created on the platform.
Cardano
Cardano is a relatively new cryptocurrency that was launched in 2017 following a “ crowdsale ” of its own cryptocurrency called “ADA”. Like NEO and Ethereum, it is a decentralized blockchain platform that aims to power a variety of applications including decentralized apps and smart contracts. Like Ethereum, it has its own native digital asset “ ADA ” that powers the network. ADA is also used to pay for network transactions and to power the various applications being built on the Cardano blockchain. Another noticeable difference between Cardano and the other top 5 cryptocurrencies is that it is partnered with multiple reputable companies such as the World Bank and has partnerships with financial institutions. Ultimately, Cardano is one of the fastest growing cryptocurrencies on the market and has a bright future ahead of it.
Stellar Lumens
Stellar Lumens (XLM) is one of the newer cryptocurrencies on the market that was launched in 2017. Like many of the other cryptocurrencies, it is decentralized and powered by its own blockchain network. However, what makes it stand out from the crowd is that it is a decentralized open-source platform that aims to connect people, institutions, and corporations together to facilitate cross-border payments and financial transactions. However, unlike some of the other top 5 cryptocurrencies, it is not designed for digital asset trading or investment. It is designed to be a “gateway” for people to send money across borders using the Stellar network. Like the other cryptocurrencies on this list, Stellar is not designed for digital asset trading or investment. Instead, it is designed to allow people to send and receive money using the Stellar network.
Conclusion
There are many different types of cryptocurrencies that exist today, and the top 5 that were highlighted above are only a small sample of the many types available. The best way to choose which cryptocurrencies to invest in is to research them and pick out the best ones that suit your risk appetite and investment goals. When it comes down to it, the best thing to do is to educate yourself on the various types of cryptocurrencies available and pick the top 5 that you think have the best long-term potential.
