With the continuing awareness in the crypto-sphere, the number of cryptocurrencies keeps growing every other day. Since the invention of Bitcoin, many users have come to appreciate the power and benefits of digital currency. By the time of writing this, the number of cryptocurrencies across the internet stood at 1,172.
However, with Blockchain technology, it has become very easy to create a cryptocurrency anytime. Currently Bitcoin leads by market capitalization and also the largest blockchain network. They are closely followed by Ethereum, Bitcoin Cash, Ripple and Litecoin.
Bitcoin has over the years become a major brand to reckon with. When you think about cryptocurrency, the first thing that comes to mind is Bitcoin. Newer cryptocurrencies have borrowed heavily from Bitcoin in terms of technology and route to the market.
Cryptocurrencies are not a replacement to traditional currencies rather; they work together as a complementary. They are decentralized and not controlled by a central authority. Many users agree that crypto are anonymous and no one can spend a digital coin twice.
Blockchain is the technology of the future and investors are shift from the traditional currency (Fiat) to digital currency (cryptocurrency). This is s peer to peer platform and transactions are fast and flawless. You can send and receive money from anywhere across the globe and the distances do not inflate the transaction fee.
Transactions are irreversible but highly secured by cryptography. This makes sure your funds are secured and transactions cannot be manipulated. This give you control of all your transactions. Since the process is decentralized, you do not have to use third parties and other bureaucracies; you get access to your funds on real time basis.
Why are there so Many Cryptocurrencies in the Market?
The adoption of Bitcoin in the digital money markets has opened many opportunities for investors and merchants alike. Cryptocurrencies offer fast and convenient way to conduct business. There are many restaurants, pubs, stores and ATMs that are accepting digital coins as a payment option; a shift from the physical currency.
However, Bitcoin has had its share of drawbacks and limitations. This has led to growth of “better” cryptocurrencies. The blockchain technology uses a simple programming language and any tech savvy developer can create own crytpocurency and push it to the market.
Most of the latest cryptocurrencies seek to improve on Bitcoin. Litecoin, Ethereum and Ripple are good examples. They have better features and are user friendly. Bitcoin transactions are slow thus the need for faster transactions offered by the new entrants in the market.
Dogecoin on the other hand was created to add fun in the crypto-sphere. Gridcoin is designed for a good cause and you can use it to raise funds for community projects. However, there are also scams under the guise of cryptocurrency. Out of 1172 digital currencies in the market, only few are relevant and value for money to the investor.
Blockchain uses source codes and it is easy to create a clone. All you need is modify a few variables, come up with an enticing name and you become the owner of a new cryptocurrency. This takes only a few hours and once you create hype around it, users will buy your idea and you are in business.
These clones account for over 45% of cryptocurrencies in the market today. Investing in in the crypto-niche requires due diligence on your part. This is a fact that has left many cryptocurrency enthusiasts sitting on the fence hence the low uptake across the globe.
Most of these currencies are altcoins that to seek to offers to Botcoin’s bottlenecks. According to Altcoin Calendar website, new altcoins are launched every day. However most of these do not hold any merit technically; they are simple clones that do not have a community support.
These are “flashcoins” that are popularly being used by pump and dump cartels; these are get quick scams. They start like an Initial Coin Offering (ICO) and once potential investors buy into their idea, they go under and resurface under a new brand name later.
Not all altcoins are useless, some offer value and work like penny stocks; they are unpredictable and highly volatile. There is no way to control them since the market is not regulated; you only invest when you know the risks involved.
The existence of these cryptocurrencies is healthy; they have to come up at this early stage. It is a lucrative new technology and developers are cashing out on the boom; they are implementing the concept in different forms and once the user is informed, they will make the right decisions on what platform suits their financial needs.
Lastly, Bitcoin has become so dear for the new investors who are looking for alternative ways of investing in the crypto-sphere. Altcoins become the only entry point for many. Once they get enough funds, they buy into major cryptocurrencies including Bitcoin, Ethereum, Litecoin and Ripple.