Top 10 Best Cryptocurrencies to Invest in in the World

Top 10 Best Cryptocurrencies to invest in in the world

From Bitcoin and Ethereum to Dogecoin and Tether, there are thousands of different cryptocurrencies, which makes it overwhelming when you're just starting out in the crypto world. To help you get your bearings, here are the top 10 cryptocurrencies based on their market capitalization or the total value of all coins currently in circulation.

What are cryptocurrencies?

A cryptocurrency is a digital asset that can circulate without the centralized authority of a bank or government. As of today, there are over 20,000 cryptocurrency projects which represent the entire $1.07 trillion crypto market.

1. Bitcoin (BTC) Market cap: $441 billion

Bitcoin (BTC)
Bitcoin (BTC)

Bitcoin (₿) is a decentralized digital currency that can be transferred over the bitcoin peer-to-peer network. Bitcoin transactions are verified by network nodes through cryptography and recorded in a distributed public ledger called the blockchain. Cryptocurrency was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto. The currency began to be used in 2009, when its implementation was released as open source software.

Bitcoin has been described as an economic bubble by at least eight Nobel laureates in economics.

The word bitcoin was defined in a white paper published on October 31, 2008. It is a compound of the words bit and coin. There is no uniform convention for bitcoin capitalization; some sources use bitcoin, in capital letters, to denote the technology and the network and bitcoin, in lower case, for the unit of account. The Wall Street Journal, The Chronicle of Higher Education, and the Oxford English Dictionary advocate the use of tiny bitcoin in all cases.

A few local and national governments officially use bitcoin to some extent; El Salvador and the Central African Republic have adopted bitcoin as legal tender, while Ukraine accepts bitcoin donations to fund resistance against the Russian invasion.

2. Ethereum (ETH) Market cap: $201 billion

Ethereum (ETH)
Ethereum (ETH)

Ethereum is a decentralized and open source blockchain with smart contract functionality. Ether is the native cryptocurrency of the platform. Among cryptocurrencies, Ether is second only to Bitcoin in terms of market capitalization.

Ethereum was designed in 2013 by programmer Vitalik Buterin. Other founders of Ethereum included Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin. , with which users can interact. Decentralized finance (DeFi) applications provide a wide range of financial services without the need for typical financial intermediaries such as brokerages, exchanges or banks, such as allowing crypto users -currency to borrow against their holdings or lend them for interest.Ethereum also allows users to create and trade NFTs, which are unique tokens representing ownership of an asset or associated privilege, recognized by a number of institutions. Additionally, many other cryptocurrencies use the ERC-20 token standard in addition to the Ethereum blockchain and have used the platform for initial coin offerings.

A series of upgrades called Ethereum 2.0 includes a transition to proof-of-stake and aims to increase transaction throughput using sharding.

3. Tether (USDT) Market cap: $66 billion

Tether (USDT)
Tether (USDT)

Tether (often referred to by one of its currency codes, USD₮), is an asset-backed cryptocurrency stablecoin. It was launched by Tether Limited Inc. in 2014. Tether Limited is owned by Hong Kong-based iFinex Inc., which also owns the Bitfinex cryptocurrency exchange. Since July 2022, Tether Limited has minted the USDT stablecoin on ten protocols and blockchains. Tether is described as a stablecoin because it was originally designed to be valued at $1.00, with Tether Limited maintaining $1.00 in asset reserves for every USDT issued.

Tether tokens are assets that move around the blockchain as easily as other digital currencies, but are pegged to real-world currencies on a 1-to-1 basis.

Tether tokens are called stablecoins because they provide price stability as they are pegged to fiat currency. This provides traders, traders and funds with a low volatility solution when exiting market positions.
All Tether tokens are pegged 1 to 1 with a corresponding fiat currency (e.g. 1 USD₮ = 1 USD) and are 100% backed by Tether reserves.

4. U.S. Dollar Coin (USDC) Market cap: $54 billion

U.S. Dollar Coin (USDC)
U.S. Dollar Coin (USDC)

The USD Coin (USDC) is a digital stablecoin pegged to the US dollar. USD Coin is managed by a consortium called Centre, which was founded by Circle and includes members of cryptocurrency exchange Coinbase and bitcoin mining company Bitmain, an investor in Circle. USDC is issued by a private entity and should not be confused with a central bank digital currency (CBDC).

Circle claims that each USDC is backed by a dollar held in reserve, or by other "approved investments", although these are not detailed. Wording on Circle's website changed from the former "backed by US dollars" to "backed by fully reserved assets" by June 2021.

The tokenization of the US dollar into USD Coin takes place in three stages:
A user sends US dollars to the coin issuer's bank account.

The issuer uses a USD Coin smart contract to create the equivalent amount of USD Coin.
Newly issued USD coins are sent to the user and replaced US dollars are held in a reserve.
Exchanging USD coins for US dollars follows the process shown above, but in reverse.

USDC reserves are regularly certified (but not audited) by Grant Thornton, LLP, and monthly certifications can be viewed on the Center Consortium's website.

5. Binance Coin (BNB) Market cap: $45 billion

Binance Coin (BNB)
Binance Coin (BNB)

Binance Coin is the cryptocurrency issued by the Binance exchange and trades with the symbol BNB. As of the second quarter of 2022, Binance Exchange is the largest cryptocurrency exchange in the world, with a volume of $7.6 billion.

KEY POINTS TO REMEMBER

  • Binance Coin is the cryptocurrency issued by the Binance exchange and trades with the symbol BNB.
  • BNB was initially based on the Ethereum network but is now the native currency of Binance's own blockchain, the Binance Chain.
  • Each quarter, Binance uses one-fifth of its profits to buy back and permanently destroy, or “burn,” Binance Coins held in its treasury.
  • Binance was created in 2017 as a utility token for discount trading fees, but its uses have expanded to many applications, including payment of transaction fees (on the Binance Chain), travel reservations, entertainment, online services and financial services.

  • At the time of writing, Binance has a market capitalization of over $56 billion and ranks behind Bitcoin, Ethereum, and USD Tether in terms of market capitalization.

6. XRP (XRP) Market cap: $18 billion

XRP (XRP)
XRP (XRP)

Ripple is a real-time gross settlement system, currency exchange and funds transfer network created by Ripple Labs Inc., a US-based technology company. Released in 2012, Ripple is based on a distributed open-source protocol and supports tokens representing fiat currency, cryptocurrency, commodities, or other units of value such as frequent flyer miles or mobile minutes. Ripple claims to enable "secure, instant, and nearly free global financial transactions of any size, with no chargebacks." Ledger uses the native cryptocurrency known as XRP.

In December 2020, Ripple Labs and two of its executives were sued by the United States Securities and Exchange Commission (SEC) for selling XRP tokens, which the SEC classified as unregistered securities.

7. Binance USD (BUSD) Market cap: $17 billion

Binance USD (BUSD)
Binance USD (BUSD)

BUSD is a fiat-backed stablecoin pegged to the US dollar and issued by Paxos. BUSD is available for purchase and redemption at the rate of 1 BUSD for 1 USD. The stablecoin was launched in September 2019 in partnership with Binance and is now the seventh largest cryptocurrency by market capitalization and the third largest stablecoin.

BUSD is an ERC-20 token issued on Ethereum. There are also BEP-20 and BEP-2 Binance-Peg tokens available with multiple use cases on BNB Chain and Binance.com. Nomic Labs has audited its smart contract, and leading US auditor Withum attests to its reserve account balance.

How does BUSD work?

To maintain its value of one dollar, Paxos holds an amount of US dollars equal to the total supply of BUSD. BUSD and USD are exchangeable at any time through Paxos. Let's look at exactly how:

  • A user sends USD to the Paxos bank reserve account.
  • The issuer (Paxos) creates the equivalent amount of BUSD on Ethereum.
  • The newly created BUSD is delivered to the user while the USD is held in the bank reserve account.
  • The mechanism always works in reverse too. Users can burn BUSD with Paxos and receive $1 in return.

8. Cardano (ADA) Market cap: $17 billion

Cardano (ADA)
Cardano (ADA)

Cardano is a public blockchain platform. It is open-source and decentralized, with consensus achieved using proof-of-stake. It can facilitate peer-to-peer transactions with its in-house cryptocurrency, ADA.

Cardano was founded in 2015 by Ethereum co-founder Charles Hoskinson. The development of the project is overseen and supervised by the Cardano Foundation based in Zug, Switzerland. It is the largest cryptocurrency to use a proof-of-stake blockchain, which is considered a greener alternative to proof-of-work protocols.

9. Solana (SOL) Market cap: $14 billion

Solana (SOL)
Solana (SOL)

Solana is a blockchain founded in 2017 by Anatoly Yakovenko with a unique Proof of Stake consensus mechanism. The Solana network focuses on high transaction throughput and fast processing times. It achieves this through its Proof of History technology. Solana claims to be able to process around 50,000 transactions per second, making it one of the fastest in the industry.

The Solana blockchain linearly chops transactions to create verifiable order of all network activity to achieve these speeds. For this reason, there is no need to rely on a block creator's timestamp or network validators to verify that transactions occurred in the correct order.

Solana's native SOL token is primarily used for staking and transaction fees and has an unlimited supply. However, the blockchain burns 50% of the SOL used in each transaction fee to maintain a set level of year-over-year inflation. Anyone with enough SOL can become a network validator and support the consensus process needed to run the blockchain. This mechanism generates rewards for users who participate in supporting the blockchain.

10. Dogecoin (DOGE) Market cap: $9 billion

Dogecoin (DOGE)
Dogecoin (DOGE)

Dogecoin (code: DOGE, symbol: Ð) is a cryptocurrency created by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system as a "joke", mocking wild crypto speculation -currencies at the time. It is considered both the first "meme piece" and, more specifically, the first "dog piece". Despite its satirical nature, some consider it a legitimate investment prospect. Dogecoin features the face of the Shiba Inu dog from the "doge" meme as its logo and namesake. It was introduced on December 6, 2013 and quickly grew its own online community, reaching a market capitalization of over $85 billion on May 5, 2021. It is the current shirt sponsor of Watford Football Club.

Dogecoin.com promotes the currency as the "fun and friendly internet currency", referring to its origins as a "joke". Software engineers Billy Markus and Jackson Palmer launched the satirical cryptocurrency as a way to poke fun at Bitcoin and the many other cryptocurrencies touting grand plans to take over the world. With the help of Reddit, the site became an instant hit. Within two weeks, Dogecoin created a dedicated blog and forum, and its market value reached $8 million, once becoming the seventh largest electronic currency in the world. Dogecoin is based on the Scrypt algorithm, and the transaction process is more convenient than Bitcoin. Dogecoin only takes a minute to confirm, while BTC takes 10 minutes.

Crypto FAQ

What are cryptocurrencies?

Cryptocurrency is a form of currency that exists only in digital form. Cryptocurrency can be used to pay for online purchases without going through an intermediary, such as a bank, or it can be held as an investment.

How is trading cryptocurrency different from stocks?

Although you can invest in cryptocurrencies, they are very different from traditional investments, such as stocks. When you buy stock, you are buying a piece of ownership in a company, which means you have the right to do things like vote on the direction of the company. If that company goes bankrupt, you may also receive compensation once its creditors have been paid from its liquidated assets.

Purchasing cryptocurrency does not grant you ownership of anything other than the token itself; it's more like exchanging one form of currency for another. If the crypto loses value, you will not receive anything afterwards.

There are several other key differences to keep in mind:

  • Trading Hours: Shares are only traded during trading hours, generally 9:30 a.m. to 4:30 p.m. ET, Monday through Friday. Cryptocurrency markets never close, so you can trade 24 hours a day, seven days a week.
  • Regulation: Stocks are regulated financial products, which means that a governing body checks their credentials and their finances are public knowledge. In contrast, cryptocurrencies are not regulated investment vehicles, so you may not be aware of the internal dynamics of your crypto or the developers working on it.
  • Volatility: stocks and cryptocurrency carry risk; the money you invest may lose value. However, stocks are directly tied to companies and generally rise and fall based on the performance of those companies. Cryptocurrency prices are more speculative - no one is sure of their value yet. This makes them much more volatile and affected by something as small as a celebrity tweet.

Do you have to pay taxes on cryptocurrency?

If you are buying and selling coins, it is important to pay attention to tax rules related to cryptocurrencies. Cryptocurrency is treated as capital, like stocks, rather than cash. This means that if you sell cryptocurrency for a profit, you will have to pay capital gains tax. This is the case even if you are using your crypto to pay for a purchase. If you receive a higher value than what you paid for, you will have to pay taxes on the difference.

Are there cryptocurrency exchange-traded funds (ETFs)?

Given the thousands of cryptocurrencies in existence (and the high volatility associated with most of them), it's understandable that you would want to take a diversified approach to investing in crypto to minimize the risk of losing money. silver.

Several companies have offered crypto ETFs, including Fidelity, but regulatory hurdles have slowed the launch of any consumer product. As of June 2021, no ETFs were available to average investors in the market.

How to buy crypto?

You can buy cryptocurrencies through crypto exchanges, such as Coinbase, Kraken, or Gemini. Additionally, some brokerages, such as WeBull and Robinhood, also allow consumers to purchase cryptocurrencies.

Why are there so many cryptocurrencies?

Cryptocurrency is an emerging field with over 19,000 crypto projects underway, with very few barriers to entry. Last year, in particular, saw a boom in the crypto market, with thousands of new crypto projects being added.

While some cryptos function as currencies, others are used to develop infrastructure. For example, in the case of Ethereum or Solana, developers build other cryptos on top of these platform currencies, which creates even more possibilities (and cryptos).

What is an Altcoin?

When we first think of crypto, we usually think of Bitcoin first. Indeed, Bitcoin represents more than 45% of the total cryptocurrency market. So, when we talk about cryptos apart from bitcoin, all these cryptos are considered as altcoins.

Ethereum, for example, is considered the most popular altcoin.

Why is Bitcoin valuable?

Part of what makes Bitcoin so valuable is its scarcity. The maximum Bitcoin supply is limited to 21 million coins. Currently, there are 19 million coins in circulation.
To create supply, Bitcoin rewards crypto miners with a fixed amount of Bitcoin. (To be exact, 6.25 BTC is issued when a miner has successfully mined a single block.). To keep the process under control, the rewards given for mining Bitcoin are halved almost every four years.

Why are cryptocurrencies important?

Cryptocurrencies are growing in importance and are not going away any time soon. While the original premise of cryptocurrency was to solve problems with traditional currencies, there are now a whole host of utility cryptocurrencies that have emerged, thanks to the creation of the blockchain.

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