Which digital currencies are right for you?
Bitcoin. Ether. Ripple. Litecoin. If you’re a digital currency fan, you may hold one or more of these coins in your wallet. But did you know there are more than 5400 cryptocurrencies in the marketplace? With so many choices, which are right for you?
That all depends on your goals for holding digital coins. For some, it’s the thrill of the hunt – looking for new, emerging coins and getting in on the ground floor where there’s plenty of opportunity to win big. For others, it’s all about populating their wallet with the “gold standard” of digital coins, those coins that are consistently in the top tier for market capitalization. Still others may choose their currencies strictly based on fees or convenience.
Unlike cash or “fiat currency,” the beauty of digital coins is their versatility. Different coins offer different benefits designed for specific needs.
If you’re trading to win, Bitcoin is an obvious choice. It’s the oldest coin with the largest market cap. The notable feature of this coin is that it is backed solely by the trust of the people who hold it. Like stocks, the value of Bitcoin is speculative and continues to climb toward the $10,000 US mark, which is one reason for its huge popularity.
For transaction convenience, try Ether, the coin of the Ethereum network. Ethereum creates “smart contracts” that facilitate the movement of more than money. On the Ethereum network, you can exchange property, stock, just about any asset without going using a third party or middleman.
If you’re looking for speed and lower transaction costs, you may want to add Ripple to your wallet. Ripple’s blockchain technology allows for real-time payments globally, so you can send or receive funds when you need it.
Another feature to consider when choosing a coin is how their value is created. While the value of most coins rises and falls, a new class of coins called “stable coins,” are designed to give users the speed and security of blockchain technology and relative stability. A stable coin’s value can be tied to assets such as fiat currencies or gold, or by a basket of assets valued through algorithmic calculations. Stable coins such as Tether and MakerDao are being joined by large banks and financial institutions that are entering this category of digital currency.
So which coins to choose? It’s really a matter of what a coin can do for you. A good option is to hold a variety of coins in your wallet that offer opportunity for growth, for convenience, and for value. With so many choices in digital coins today, there’s no right or wrong decision when you understand what each coin was created to do in the crypto marketplace.