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Today, the cryptocurrency market has grown by hundreds of times compared to 2009, when it was just emerging. The vast majority of people are still puzzled about what cryptocurrency is and why so many cryptocurrencies are needed. How to understand which cryptocurrency is better and what to focus on when choosing a cryptocurrency as a tool for investment. All these questions we will try to close today and tell about the top of the best cryptocurrencies based on their capitalization.
What is cryptocurrency?
So, what is a cryptocurrency after all? A cryptocurrency is a digital asset that uses cryptography for security and operates independently of a central bank. It allows for decentralized transactions and transfers, allowing people to buy and sell goods and services without the need for intermediaries such as banks. Cryptocurrency transactions are recorded in a public registry called a blockchain, which ensures the integrity and security of transactions.
Types of cryptocurrencies
Basically, all cryptocurrency can be divided into two camps: bitcoin and altcoins (all other cryptocurrencies). Bitcoin is the first cryptocurrency that appeared on the market in 2009. To date, its share of the market is 43.3%. Despite the fact that there are already more than 22,000 cryptocurrencies on the market, no other cryptocurrency has such a big impact on the cryptocurrency market. That's why the price of all other altcoins is directly related to the price of bitcoin. In addition, most altcoins cannot be purchased directly using fiat currencies. Instead, most buyers first buy bitcoin and then exchange it for the altcoin of their choice.
Now, let's move on to our top cryptocurrencies that have the most impact on the market at the moment.
1)Bitcoin
Everyone knows and repeatedly mentioned the number 1 cryptocurrency in the world. The cryptocurrency was created back in 2009 by Satoshi Nakamoto. The first decentralized digital currency, also known as cryptocurrency, which allows peer-to-peer transactions without the need for intermediaries. Like most other cryptocurrencies, Bitcoin has its own blockchain, which records transactions distributed across a network of thousands of computers. The limited supply of 21 million bitcoins helps prevent inflation. Now bitcoin serves more as an exchange currency for all other cryptocurrencies on exchanges.
Bitcoin's value is determined by market demand and can be volatile. It has been adopted by individuals, businesses and even governments as a form of payment and investment. However, its decentralized nature has also made it a target for illegal activity and sparked a debate over its regulation. Although bitcoin has a huge capitalization, the bitcoin network itself is very slow and is not designed for a huge number of transactions.
Market capitalization: $441,045,543,043
24h volume: $24,712,633,168
Bitcoin Price: $23,153
2)Ethereum.
The favorite of all developers and the second most capitalized cryptocurrency in the world. Ethereum is a blockchain platform with its own cryptocurrency called Ether (ETH) or Ethereum. Ethereum's goal is to become a global platform for decentralized applications, allowing users from around the world to write and run software that is resistant to censorship, downtime and fraud.
Ethereum's particularity
Ethereum has become popular because of blockchain smart contracts. Smart contracts are agreements between multiple parties on the Internet that are executed automatically, without third-party involvement. The Ethereum network is designed to replace traditional financial services firms, such as banks and brokerage firms, using decentralized applications, commonly called "DeFi," for financial applications. Ether is the fuel required to trigger transactions on the Ethereum blockchain.
Despite the fact that Ethereum tried to solve the problem of slow Bitcoin transactions, as users grew, problems emerged that the team is still solving to this day. These problems include high transaction fees, scalability issues, and slow transactions.
Market capitalization: $192,149,012,434
24h volume: $8,200,343,402
Ethereum price: $1,591
3)Tether(USDT).
The third largest coin is drastically different from the previous two, as it is a centralized cryptocurrency and is a stable coin, hence the name, Stablecoin. Tether is backed by fiat money, such as U.S. dollars, and is the equivalent of that denomination. Essentially, we have a peg to the dollar and yet it is a digital asset. This Stablecoin is owned by iFinex. Today, they are very common on major exchanges and act as a secure vault for your money. Unfortunately, since Tether is centralized, there is no guarantee in the reliability of this cryptocurrency, as there were cases when stabelcoin collapsed.
Market capitalization: $67,813,736,027
24h volume: $34,162,185,089
Tether Price: $1.00
4)Binance Coin (BNB).
One of the most popular altcoins is BNB. Binance Coin (BNB) originally started out as a way to pay trading fees in the popular ecosystem of the Binance cryptocurrency exchange. Now, BNB can be used on most cryptocurrency exchanges to trade, process payments, book tickets, or pay for online purchases in-store. It can also be used as an exchange coin for other cryptocurrencies on exchanges. The cryptocurrency is relatively new, but since 2017 the price has risen by 313,000%.
Market capitalization: $48,913,630,415
24h volume: $553,882,947
Price of BNB: $312.45
5)USD Coin (USDC)
The second largest staplecoin is USD Coin, or USDC for short. USD Coin was developed in 2018 and is a good alternative to USDT. Circle and the cryptocurrency exchange Coinbase were responsible for the creation of the stabelcoin. Like USDT, USDC is centralized and backed by U.S. Treasury bills. Stablecoins target a 1:1 ratio to USD. USDC runs on the Ethereum blockchain and is used on most exchanges. Compared to USDT, USDC is more predictable and is more trusted by investors.
Рыночная капитализация:$42,720,204,923
Volume per 24h: $3,487,722,993
USD Coin Price: $1.00
6)XRP.
XRP is the native cryptocurrency in the Ripple network, and it is one of the top 10 cryptocurrencies by market capitalization. Ripple's goal from the beginning has been to develop one that could be a replacement for SWIFT (the leading money transfer network) technology or otherwise replace the settlement layer between large financial institutions. The standard transaction fee on Ripple is set at 0.00001 XRP, which is minimal compared to the large fees charged by banks for cross-border payments. XRP could become a key currency for cross-border payments in the future. Confirmation of transactions is incredibly fast. They typically take four to five seconds compared to the days it can take for banks to complete a bank transfer, or the minutes it takes Bitcoin to verify transactions.
Market capitalization: $20,224,470,384
24h volume: $1,080,284,794
XRP Price: $0.40
7) Binance USD (BUSD)
BUSD is a stabelcoin founded by Paxos and Binance and is one of the few stabelcoins that meet the strict regulatory standards of the NYDFS. BUSD acts as a bridge between traditional finance and DeFi, providing a level of freedom that traditional currencies cannot offer. Even though Stablecoin is related to the Binance exchange, this does not prevent it from going outside of it as well. Otherwise, BUSD has all the same characteristics as its predecessors.
Market Capitalization: $15,726,292,770
Volume per 24h: $9,108,894,736
BUSD Price: $1.00
8)Cardano(ADA).
The cryptocurrency that caused a stir in 2021. Many people called it the killer of Ethereum (though it's not the first time). But is it worth it? Cardano is a blockchain project with more than 70% common currency (ADA) delivered to test the network. One of the reasons so much ADA is at stake is due to the lack of decentralized applications (dApps) available on its blockchain. The Cardano project began in 2015 in an attempt to solve some of the problems that Ethereum faced from its Proof-of-Work consensus model. Despite the faster transactions on the Cardano blockchain network, Ethereum is still the leader in DeFi, so calling Cardano an Ethereum killer seems inappropriate to me.
Market capitalization: $12,891,814,635
24h volume: $334,405,375
Cardano price: $0.38
9)Dogecoin.
Here we get to the cryptocurrency, which was originally created as a joke coin by crypto-enthusiasts in 2013. It also got its name from an internet meme that was forcing its way online at the time. In early 2021, Dogecoin gained cult status on Reddit's WallStreetBets message board - a major GameStop starter in January of that year - where enthusiasts promised to push its value "to the moon." Elon Musk, the CEO of Tesla, gave the coin extra hype. Thus, the coin climbed to the 9th position in the list of all cryptocurrencies and has a capitalization of more than $12 billion at the moment.
Like many other coins, Dogecoin runs on its own blockchain. The cryptocurrency can be used for payments and purchases, but it is not a very efficient means of savings, at least because Dogecoin has no limit to the number of coins that can be created by mining. Dogecoin may be a good mining solution, as its mathematical complexity is much lower than that of Bitcoin.
Market Capitalization: $12,213,466,652
24h volume: $1,311,219,020
Dogecoin Price: $0.09524
10)Polygon(MATIC)
Well, and closes our top no less useful cryptocurrency than the previous ones in the list. MATIC is a cryptocurrency network Polygon, founded in 2017 by three programmers: Jaynti Kanani, Sandeep Nailwal and Anurag Arjun. The network itself addresses problems that have arisen in Ethereum. In particular, solving problems of scalability, high transaction fees, and low speeds. MATIC, Polygon's native token, is an ERC-20 token based on the Ethereum blockchain, which means it can be stored in any Ethereum Wallet. This token is used to manage and protect the Polygon network and to pay transaction fees for the network. MATIC supports over 7000 decentralized applications (dApps).
Market capitalization: $9,459,099,173
Volume per 24 hours: $513,122,350
Polygon price: $1.12
What should you focus on when choosing a cryptocurrency as an investment vehicle?
In order not to lose your money on cryptocurrency projects, you need to have a rational approach to their choice. In particular, you need to pay attention to a number of factors, such as:
1)Market capitalization and liquidity: The market capitalization and liquidity of a cryptocurrency can indicate its growth potential and stability. The higher the market capitalization and liquidity, the more established and reliable a cryptocurrency can be.
2)Technology and security: The technology behind the cryptocurrency must be robust, secure and scalable. Check the code, audit reports, and the development team behind it.
3)Adoption and use case: Cryptocurrency with real use cases and actual implementation can provide a better investment opportunity than those with only speculative value.
4)Community: A strong and supportive community of developers, users and investors can help drive the growth and popularity of cryptocurrency.
5)Expert Opinions: Consider expert opinions and insights from reputable sources in the crypto industry to help you make informed investment decisions.
Conclusion
Of course, this list of digital coins is not limited to the 10 positions you can consider for investing. But the coins discussed above have the highest demand in the cryptocurrency market. You need to clearly understand the differences and advantages of this or that coin and evaluate the potential for further development. Therefore, one should not neglect to study information about each of these coins in depth. After all, our task was to acquaint you with coins, not to recommend you to buy them.