Table of Contents
Introduction to Cryptocurrencies
Cryptocurrencies is the terms used to describe digital money as it is known today. Terms such as Alt Coins and Tokens are also used interchangeably when referring to cryptocurrencies in general. As a rule of thumb any currency other than Bitcoin is known as an Altcoin.
Cryptocurrencies owe there origin to the bitcoin blockchain. As bitcoin paved the way for a new generation of transaction and a new means of doing them, other blockchain technology companies sprouted and with them their own cryptocurrencies such as Ethereum and Litecoin. Every single day there are new blockchain ICO startups that release their own currencies.
The main considerations you should become familiar with regarding cryptocurrencies is the following:
- Top 10 Cryptocurrencies by market CAP
- Not all blockchains are equal
- A brief on ICO’s
- Which cryptocurrencies solve which problems
Its important to note that cryptocurrencies are highly volatile and subject to radical shifts in value at any time. They can grow by over 100% in 24 hours and drop by more than that in a week. Most people don’t take the time to conduct a due diligence on these cryptocurrencies for one of two reasons: Firstly, they don’t have the time and would rather trust expert sources and secondly there are so many [about 1340] that moving with consumer behavior is easier.
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At present the current top 10 cryptocurrencies by market capitalization are listed below. Be aware that this list may change at any point. The feed is live and you can refer back to it at any point. Additionally we have listed the TOP 5 cryptocurrencies in the sidebar to the right >>>>>>>
Not all Blockchains are equal
Many people believe that cryptocurrencies and blockchains are the same thing. They are worlds apart. In fact the blockchain technology is the underpinning foundation that allows for cryptocurrencies to exist in the first place. Cryptocurrencies like Bitcoin came about as an incentive for the mining of the blockchain which keeps it stable.
Moving further into the advancement of blockchain technology we find that many different cryptocurrency start-ups will either develop their own blockchain or they use theBlockchain as a Service such the Ethereum or NEO blockchains. Read more on Ethereum here and why it is so sought after. The blockchain is critical in determining the value of the cryptocurrency and need for it in the market place.
- Read more on Blockchains 101
A Brief on ICO’s
ICO stands for Initial Coin Offering. These days you cant really avoid seeing an ICO listing on social media. With the rapid increase of cryptocurrency adoption the rate of ICO development has skyrocketed. At the time of writing this there are approximately 1340 ICO’s available and more springing up every day. It is safe to assume that many of these will not make it past 12 months and it also safe to assume that many are scams otherwise known as ‘pump and dump’ schemes.
The reality is that is very easy to create your own ICO and for this reason people need to research and be more vigilant. Thousands of people have lost their money to failed ICO’s promising high returns for investment.
Essentially when an ICO plans to launch they invite the public to invest their cryptocurrencies for the ICO’s currency. Normally these ICO’s will request Ethereum which will immediately tell you they use the Etheruem blockchain. An ICO will require a minimum investment from the each participant and they will normally have the backing on an investor.
- Read more on ICO’s
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Which Cryptocurrencies solve which Challanges
Well this heading should be which blockchain solves which problems but you will see they become interchanged when you start talking to people about all this. The main determing value of a cryptocurrency in the market is the challenge it is solving. What is the need it is answering in the market place?
If we look at Bitcoin, it answered the need of trust and transparency. Etheruem answered the need for others to create applications on a stable blockchain already without building their own. Other players like Litecoin answers the need for micro payment transaction, speed and confidentiality.
When deciding what cryptocurrency to purchase and support make sure they are solving a real tangible need in the market place. Use the Top 10 cryptocurrencies as a benchmark comparison to give you an idea of what to look for is a good start.
In closing a cryptocurrency is really digital money that has its value based on the challenges its underpinning blockchain is solving. Added to this a cryptocurrency is also measured by its token supply. Limited tokens such as Bitcoin tend to have a higher value provided they are solving real world challenges.