Looking to take your stocks to the next level? Investing in cryptocurrencies can be very lucrative, but also very risky. And there are many different types of cryptocurrencies to consider.
Before you dive in with a purchase, learn about the most popular kinds and about what cryptocurrencies are. Then you can make the best and most informed decisions for your portfolio and your money.
Different Types of Cryptocurrencies
Cryptocurrencies are either coins, like Bitcoin, or tokens. Both are blockchain-based cryptocurrencies but differ in a few ways. Coins are made to be a currency, with a coin, either Bitcoin or an altcoin (any coin that isn’t Bitcoin) equaling a certain amount of money.
Tokens can represent different things of value, be it money or electricity or a contract of some sort. They tend to act like stocks and are generally built from a blockchain of a coin cryptocurrency.
Bitcoin is the first and most known cryptocurrency out there. It started in 2009 and has a limit of 21 billion coins, with a current 18.8 in circulation now. It is not based in a bank and works independently as a digital currency.
Bitcoin is by far the most popular cryptocurrency available, but like all of them, it is very volatile. The best cryptocurrency isn’t always the most stable, so while the price will likely grow in the future, it’s already very expensive to buy in.
Etherium is another popular cryptocurrency but began as a programmable blockchain, and there is no limit to the amount that can exist. Etherium is also behind the newest trend of NFTs.
Cardano is one of the more recent cryptocurrencies in the game and markets itself as a new and improved version. It has the potential to use less power to process, making it more energy-efficient than currencies like Bitcoin. It was developed to help in data collection from numerous sources.
Dogecoin made a splash in the crypto scene this past year thanks to some publicity and is the first joke cryptocurrency. While it has grown from where it started, it still trades at an incredibly low price.
This might look tempting if you’re trying to buy different types of cryptocurrencies, but it fluctuates a lot. There are a lot of resources available to help you know more about dogecoin and decide if investing is a good choice for you.
Tether is a cryptocurrency based on stabilization. While it is still a digital currency, it’s tied to the US dollar, and though it can’t be exchanged for the dollar, in theory, this helps it be more stable in the market and can be used by other cryptocurrencies.
I’ll Pay In Cryptocurrency
While cryptocurrency is still not common, with the many different types of cryptocurrencies developing and growing, it’s likely here to stay. The best advice if you’re considering investing in digital currency is to proceed with caution. You will likely see big dips and sometimes big growth, so don’t panic and don’t overinvest.
And if you found this helpful in preparing your next stock steps, keep reading for more financial advice.
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