Cryptocurrency is a system designed to work as a medium for virtual transactions of crypto coins using strong cryptography to create, exchange and verify the transfer of coins. Unlike our traditional or fiat currency, cryptocurrency is only stored in computerized ledger databases.
Best Cryptocurrencies to Buy – Overview
Cryptography secures the cryptocurrency making it almost impossible to double-spend or create counterfeit. They are based on blockchain technology and are decentralized, having a distributed ledger enforced by a different network of computers. These are financial-based blockchains, in other words, they are not governed by any monetary authority or central bank.
The reason behind creating cryptocurrency was to fix the problems of fiat currencies. It makes sure that the power and responsibility are completely in the currency holders’ hands. The process of solving cryptographic equations using computers and gaining cryptocurrencies is called crypto mining. In this process, the miner has to validate data blocks and add transaction records to a ledger which is known as the blockchain.
In today’s world, cryptocurrency has become a very popular investment, and is no more just a currency. We can draw parallels between investing in cryptocurrency and investing in the stock market. And like the stock market, it is both volatile and tempting for people to invest in. Since a cryptocurrency is created and used privately, it has multiple benefits. On the other hand, there are many disadvantages of cryptocurrency too like use in illegal transactions, a large amount of electricity used during mining, volatility in the market, thefts from exchanges to name a few.
Disclaimer – Do not make decisions to invest in cryptocurrencies from the suggestions here. Cryptocurrencies prices vary drastically, and the following information may become outdated very soon. Also, we are by no means experts in the financial or the cryptocurrency sector, so please do not base your decisions on the following list. It is just intended to make you informed about different cryptocurrencies.
Let us study the best cryptocurrencies to invest in the market today.
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15 Best cryptocurrencies to Buy in 2021
1. Bitcoin (₿)
Bitcoin, one of the best cryptocurrencies to buy, makes up 79% of the cryptocurrency market. Bitcoin (₿) is considered the very first cryptocurrency and was founded in 2009 by Satoshi Nakamoto. Bitcoins are created as a reward for a process known as mining. They could be exchanged for other currencies, products, and services, but the real-world value of the coins is extremely volatile. Bitcoin transactions can be verified by network nodes and are recorded in a public distributed ledger called a blockchain.
More and more people are choosing to use bitcoin for various reasons, like decentralization of the currency, convenience, investment, and secure untraceable transactions to name a few of them. Popularity has encouraged governments to consider it for regulations to tax, facilitate legal use in trade, and for other reasons (such as investigations for money laundering and price manipulation).
When Bitcoin came up as the first peer-to-peer cryptocurrency, it paved the way for many more to follow suit. Altcoins, short for alternative cryptocurrencies, was launched after Bitcoin’s success in the market. They showcase themselves as a better replacement for Bitcoin.
2. Ethereum (ETH)
Ethereum is the second-largest cryptocurrency in the market and also one of the best cryptocurrencies to buy, after Bitcoin. This is also a decentralized and open-source blockchain with smart contract functionality generated by the Ethereum platform.
Since this utilizes smart contract blockchain, it is decentralized finance so this doesn’t require the typical financial intermediaries. Transaction fees are generally lower with Ether and are dependent on computational complexity and not on transaction size.
People can also create and exchange NFT. NFT, a non-fungible token is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and not interchangeable. NFTs can be used to represent digital items such as audio, photos, videos etc. Ethereum has also started implementing Ethereum 2.0, a series of upgrades, which includes a transition to proof of stake and aims to increase transaction throughput using sharding(Sharding is a DB partitioning technique used by blockchain companies for scalability, and to process more transactions per second).
3. Tether (USDT)
Tether is designed to be used as a means of converting fiat currency to digital currency with tokens issued by Tether Limited. It was first created in 2014 by Brock Pierce, Reeve Collins, and Craig Sellars. Tether intends to hold all of US dollars in reserve so that they can meet customer withdrawal upon demand.
After the $31 Million of US Dollar Tether (USDT) tokens were stolen in 2017, Tether suspended trading and implemented an emergency ‘hard fork’(is a sudden change in network protocol to make previous blocks or transactions as valid or vice-versa) to render all of the stolen Tether tokens untradable. Tether, as some experts say is one of the best cryptocurrencies to buy, re-enabled cryptocurrency wallet and began processing pending backlogs again in 2017. As of May 2021, there are 59.9 billion USDT in existence.
4. Cardano (ADA)
Cardano is a public blockchain platform, decentralized and open source. This includes transactions to proof of stake and can facilitate peer-to-peer transactions using its cryptocurrency, ADA. The Cardano platform was launched in 2017 by Charles Hoskinson, co-founder of Ethereum.
As people started investing more in February 2021 thinking that Cardano was one of the best cryptocurrencies to buy, ADA saw increasing activity on the blockchain. It was also among the most traded virtual currencies in the market. This is because it has an open-source format and shares the same co-founder with Ethereum.
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5. Dogecoin (Doge)
If you are active on social media, you must have come across Dogecoin (DOGE) and it’s memes. The purpose with which it was created was to provide tips to creators on social media. It was created in 2013 by software engineers Billy Markus and Jackson Palmer, as a joke, making fun of the cryptocurrencies at the time.
However, some consider it as a legitimate investment prospect and as the best cryptocurrency to buy. After every Dogecoin-related tweet released by Elon Musk, the price of Dogecoin has experienced a sharp price shift. DOGE/BTC and DOGE/LTC trading are offered on several online exchanges. DOGE is often used for trading items that are tangible, on Twitter and Reddit where there is a lot of conversation about this coin as well.
Dogecoin started with a supply limit of 100 billion, which was more than the other top digital currencies. The 100 billionth coin was mined by mid-2015, with another 5 billion coming every year into circulation post that. The number of Dogecoins in circulation will be doubled by 2075.
6. Ripple (XRP)
Ripple was released in 2012 by Ripple Labs Inc., a technology company based in the US. It is a gross settlement system that operates in real-time. Ripple also provides a remittance network and currency exchange built upon an open-source protocol.
The ledger employs the cryptocurrency known as XRP. They offer international transactions which usually take 10-30 business days in fiat currency. Ripple claims to provide instant and secure transactions. This makes Ripple an interesting proposition for the coveted title of the best cryptocurrencies to buy.
7. Polkadot (DOT)
The Polkadot protocol is a heterogeneous architecture that enables customized layer and external networks. In simpler words, it means that instead of having a single “lane” to complete a transaction, Polkadot has several “lanes”.
Polkadot’s first token sale closed on October 27, 2017, and raised a total of 485,331 ETH (Ether, the currency of the Ethereum blockchain). The technology used in creating Polkadot is going to help support the decentralization of the web, a concept pioneered by Dr. Wood as he coined the term ‘Web 3.0′. Polkadot has been on the stock market only since 2020, so there is not much historical data for comparison, making it a riskier investment for potential buyers, but this one of the best cryptocurrencies to buy may give higher rewards.
8. Uniswap (UNI)
Uniswap is a decentralized finance protocol and was created in November 2018 by Kayden Adams, a mechanical engineer formerly working at Siemens. Uniswap protocol is used to exchange cryptocurrencies. Through the use of smart contracts, the Uniswap protocol can facilitate automated transactions between cryptocurrency tokens on the Ethereum blockchain. It uses liquidity protocols to facilitate users in trading Ethereum tokens.
Uniswap was the largest decentralized exchange and fourth-largest cryptocurrency exchange by daily volume trading as of October 2020. This makes it one of the best cryptocurrencies to buy, if you are looking for something other than the conventional coins. By March 2021, it was generating approximately US$2–3 million daily as a fee from the liquidity providers who facilitate cryptocurrency exchange in the liquid market. It is expected to do exceedingly well and it is still at a very early stage of its development.
Chainlink, created in 2017 by Sergey Nazarov, is a decentralized network and cryptocurrency that provides real-world data to blockchain smart contracts. It uses an Ethereum-based token and delivers tamper-proof data to many finance applications that operate decentralized. Chainlink can integrate third-party data with smart contracts, this means that smart contracts can now respond to other global events, API calls, and asset rates.
Chainlink stands as the 11th most valuable cryptocurrency on the Coinbase list as it recently surpassed the $20 billion mark, thanks to the increasing optimism that Chainlink is one of the best cryptocurrencies to buy. The motto of Chainlink is to enable more trustworthy source data.
10. Monero (XMR)
Monero is an open-sourced decentralized cryptocurrency that is focused on privacy, thereby this is among the most valuable and best cryptocurrencies to buy. It was introduced in 2014. Its privacy features attracted users looking for privacy measures that were not provided in other cryptocurrencies. It is notoriously famous to be used illicitly in money laundering, darknet markets, ransomware, and crypto-jacking.
As we know that blockchains of the participants’ activities are all public ledgers, these display all the transactions. Monero’s protocol uses privacy-enhancing technologies that obfuscate transactions to achieve anonymity and fungibility, preventing anyone from viewing transaction details.
11. VeChain (VET)
Developed by the VeChain Foundation, this provides a wallet for Android and iOS platforms. It supports tokens such as VTHO, VET and VIP180. Apart from being a tool for node management, and featuring a dApp browser, the wallet provides a marketplace for nodes.
This is fairly cheap and one of the best cryptocurrencies to buy. The VeChain Thor Blockchain was created and designed specifically for supply chain management and business processes through the use of distributed ledger technology.
12. AAVE (AAVE)
Aave is a marketplace for borrowing and lending many digital assets and this is based on Ethereum.
The Aave protocol is governed by AAVE holders. Aave’s origins go back to 2017. The idea enables users to give loans or borrow funds in the form of cryptocurrencies. Through Aave, users can take loans in another cryptocurrency than the one they deposit. It allows its holders to influence change in the Aave protocol. It also protects the protocol against black swan events (possibility to occur unexpected events), therefore consider this in your list of the best cryptocurrencies to buy.
13. IOTA (MIOTA)
IOTA is designed for the Internet of Things; it is an open-source distributed ledger. Transactions can be issued without fees, facilitating microtransactions as IOTA does not use miners to validate transactions. It makes nodes that issue new transactions on the network approve two previous transactions. The network transactions do not charge any fee. IOTA has been hailed as one of the best cryptocurrencies to buy under $1 due to these factors.
14. Polygon (MATIC)
Polygon is an Ethereum-compatible blockchain. It has attempted blockchain interoperability and scaling. It uses the MATIC token for staking, governance, and gas costs. Ethereum has few shortcomings such as throughput, poor user experience, and lack of community control. Polygon uses sidechain solutions to overcome these, as well as projects like Polkadot.
15. EOS.IO (EOS)
EOS.IO is a protocol based on EOS cryptocurrency. It has a smart contract platform and it claims to eliminate transaction fees and conduct millions of transactions per second. Therefore, consider this when you are finding out the best cryptocurrencies to buy.
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Best Cryptocurrencies to Buy – Summary
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Final Thoughts – Best Cryptocurrencies to Buy
Cryptocurrency, being fairly new, is here to stay for a long run, and will continue to grow. However, due to its volatile nature, it proves to be tough to decide which are the best cryptocurrencies to buy. But instead of treating them as a fast-money-minting opportunity, one must consider it as a long-term investment.
Frequently Asked Questions
Can cryptocurrency be converted to cash?
Many platforms such as Coinbase and Kraken etc. are there in the market that enables cryptocurrency users to buy, sell and withdraw directly from an account.
Is investing in cryptocurrency safe?
We know that cryptocurrencies are not regulated. This poses a risk of being very volatile in the market and risky for investors. However, because of cryptography, it is highly secure to use cryptocurrency as it provides security and reduces the chances of fraudulent transactions. One must also keep in mind that purchases cannot be traced since the transactions are highly secure.
Why was cryptocurrency created?
It was created in 2008 during the global financial crisis. Since the cryptocurrency is a decentralized system of transaction, this proved to be a good option for people, in general, to take control of their money themselves, without having to depend on banks or governments.
Is cryptocurrency real money?
Cryptocurrencies can be treated as virtual assets that people can use to invest in and can also be used for online purchases. You will exchange real currency, like US dollars or GB Pounds, to buy the coins of any kind of cryptocurrency and use it similarly as the real money where they have accepted mode of transaction.
What is the difference between cryptocurrency and digital currency?
Digital currency is the electronic currency or money that can be stored in the digital wallet. While cryptocurrency is the encrypted or cryptographed form of digital currency. Currently, cryptocurrency is still very volatile in the global market.