Back in 2017, you could still buy an entire Bitcoin for less than $1000. These days, a single Bitcoin is worth more than $26,000. This is the kind of incredible growth that attracted so many people to the cryptocurrency space.
The growth of the cryptocurrency market also means that there are now many different types of cryptocurrency. This is news to some people who think that Bitcoin is the only cryptocurrency there is. However, not only are there many other crypto coins you can invest in, but many of them are also very unlike Bitcoin.
Many investors consider it essential to invest in a variety of types of cryptocurrency if you want to enjoy the best returns possible. However, that means it is first necessary to understand what kinds of crypto coins there are.
Read on to learn all about the most important types of cryptocurrency you can invest in!
Transaction Crypto Technology
The first kind of cryptocurrency is the simplest. Many crypto coins are designed to allow people to make transactions. In this way, they can be compared to traditional currencies.
Bitcoin is the largest and most famous example of a transaction crypto coin. Because it is the oldest cryptocurrency, it also has some of the simplest technology. At the end of the day, the only thing you can do with Bitcoin and other transaction crypto coins is buy and sell goods and services.
Of course, it is worth noting that transaction cryptocurrencies have some advantages over traditional currencies. First, many of them can provide extra anonymity. This was one of the main things that attracted many people to Bitcoin in the early days of the crypto space.
On top of that, transaction crypto coins allow people to buy and sell with anyone else anywhere in the world. Without transaction crypto, many people would have to pay expensive fees to exchange their local currency for another currency so that they could make a purchase.
Many people are also attracted to transaction crypto coins because they do not have centralized authorities. The crypto system is set up so that no institution has to approve a transaction for it to occur.
The blockchain allows the system to keep perfect track of who owns how much of each transaction crypto coin without a regulating body. Many people prefer the greater freedom that comes with this lack of institutional regulation.
Investing in Cryptocurrency as a Joke Crypto
The world of crypto investment is unlike traditional investment spaces in many ways. For one thing, many people have made a lot of money by investing in joke coins. These are also called meme coins.
The first joke crypto coin was Dogecoin. Everything about this crypto coin was designed to be funny.
For example, one of the biggest benefits of transaction crypto coins is that they do not have to suffer from inflation. However, Dogecoin was designed to allow for an unlimited amount of inflation.
The picture for Dogecoin is a famous picture of a chubby dog. The designer of Dogecoin says that they designed the whole thing in a single day.
Considering all of these facts, you might imagine that this coin would never succeed. However, enough people thought it was funny that Dogecoin exploded in popularity.
Because so many people wanted this coin, the value of each individual Dogecoin went way up.
Since then, other coins have attempted to copy this strategy. There are now many joke crypto coins you can invest in. Again, it is worth noting that some people have actually made a lot of money by investing in these coins.
Trading Based on Capabilities
Some crypto coins generate demand by offering extra capabilities. As we have discussed, transaction crypto coins are only good for buying and selling things. However, blockchain technology allows for much more.
The second largest crypto coin in the world is Ethereum. Its popularity is based on the fact that it can provide smart contracts and other capabilities.
Smart contracts allow people to make agreements without having to know or trust each other. These contracts are designed to execute themselves when the designated conditions are met. They do not even depend on a legal system to ensure that the contractual parties fulfill their agreements.
Even if someone attempts to back out of a smart contract, it will execute itself.
This amazing capability is part of what has made Ethereum the most popular crypto coin in the world after Bitcoin.
Of course, there is a lot more to know about the capabilities of certain cryptocurrencies. You can check out The Crypto Merchant to learn more about how crypto coins might change the future.
The Value of Stablecoins
Although there are many benefits of investing in crypto coins, some of the biggest crypto coins do not provide any potential for profit at all. These coins are called stablecoins.
They are designed to maintain the exact same value at all times, no matter what happens. This may not seem useful, but it can come in handy for the right crypto investing strategy.
Many platforms charge a fee for buying a crypto coin with traditional currency. People often put their money into stable coins to keep it stable while they are between investments. That way, they can keep their money in the crypto market and avoid unnecessary fees.
Know the Main Types of Cryptocurrency
Although more people are finding out about the cryptocurrency space than ever before, some people still think of cryptocurrency and Bitcoin as synonymous. However, it is essential to understand the many other types of cryptocurrency out there. Many experts predict that newer coins with advanced capabilities will replace Bitcoin at some point.
To learn more about the latest information in cryptocurrency, business, and more, take a look through our other articles!