Nowadays, the Internet is all abuzz about cryptocurrencies and blockchain technologies. Although for me, it is way far behind the dot-com bubble phenomena in the latter part of the 90s and early 20s. But, then, it is still a tech bubble, a phantom in the business exchange world, if I may say. The attention and speculations the cryptocurrencies get show that the world of cryptocurrency market only makes it more interesting.
The cryptocurrency system as a whole produces decentralized cryptocurrency. Such regularity defined when the time the system was created and which is publicly known. In centralized banking systems, governments or corporate boards control the supply of the currency. This is done by printing units of fiat money or demand additions to digital banking ledgers. In a decentralized cryptocurrency, governments or organizations cannot create new units. Nor provided support for other businesses, corporate entities or banks holding asset value measured in it.
Introduction to Cryptocurrencies
Transactions with cryptocurrencies are generally irreversible once a number of blocks are confirmed. Furthermore, one feature that is lacking in cryptocurrency as compared to a credit card is consumer protection against fraud, such as chargebacks. However, this is an issue of little importance since a third party multi signature-based escrow can be used effectively to mediate a transaction. This process is equivalent to enabling chargebacks. Actually, this attribute is an advantage, since it is also much easier than performing an irreversible transaction using a system with a native chargeback.
What are cryptocurrencies?
Have you been, in one way or the other encountered such words as cryptocurrency trading, cryptocurrency mining, or bitcoin value? The possibility is 95% YES! But, what really is cryptocurrency?
A cryptocurrency is a digitally designed asset functioning as a mode of exchange utilizing a form of writing called cryptography. It is primarily used as a way to securing transactions in businesses and control the formation of other currency units. They are classified as a subcategory of digital currencies and similarly classified as a subset of alternative and virtual currencies.
The best example is Bitcoin. Bitcoin became the world’s first decentralized cryptocurrency and digital payment system in 2009. This system works without a principal repository or single administrator, hence decentralized. The system is peer-to-peer where the transactions can take place directly between users and without an intermediary. Since then, many cryptocurrencies have been mushrooming all around. These are often called altcoins, a fusion of Bitcoin alternative.
As of July 2019, hundreds of cryptocurrencies do exist. Most of these cryptocurrencies are analogous to and a derivative from the original fully decentralized cryptocurrency, Bitcoin. In cryptocurrency, safety, integrity, and balance of ledgers are maintained by a community of distrustful parties called “crypto miners.” These are members of the general public using computers to help validate and time stamp transactions. These transactions are then added to the ledger in accordance with a specific timestamping system.
How Cryptocurrencies Works?
To fully understand how cryptocurrency works, you will need to understand a few basic specifics concepts, that are:
Publicly distributed ledger: A public ledger stored all transactions at every cryptocurrency’s formation. This is where the identities of the coin’s owners encrypted. To ensure the legitimacy of record keeping, the system also uses other cryptographic techniques. The ledger makes sure that the matching “digital wallets” could compute an accurate spendable balance. Ethereum wallet and Bitcoin wallet or blockchain wallet is the world’s most popular digital wallets.
Peer-to-peer transactions: Any transfer of funds between digital wallets is called “transactions”. A transaction gets to be submitted to the public distributed ledger and waits for confirmation. Once the transaction is consummated, wallets use a cryptographic signature as proof that the transaction comes from the wallet’s owner. The confirmation process takes a little time, usually ten minutes for Bitcoin.
Cryptocurrency mining: In simple terms, this is the process of confirming transactions and adding the same to a public ledger. In order to add a particular transaction to a ledger, “miners” must figure out a progressively-complicated computational problem. This computational problem is somewhat like a mathematical puzzle. The “miners” who solves the puzzle first add a “block” of transactions to the public ledger. This is the system in which the transactions, blocks, and the public distributed ledger work together. This system ensures that not a single person could just simply add or modify a block at will.
The Technology Behind Cryptocurrencies
Bitcoin and with its spin-offs use decentralization of control as against the centralized electronic money/banking systems. Here, all transactions are confirmed and substantiated by network nodes. And recorded in a public distributed ledger technology called blockchain.
A group or individual identified as Satoshi Nakamoto developed the technical system from which decentralized cryptocurrencies are based. The first working version was an open source software. Akin to the internet in its infancy, blockchain technology is difficult to comprehend and predict. This is due to lack of knowledge on how these cryptocurrencies work. But turn out to be omnipresent in the exchange of transactions of digital and physical goods, information, and online platforms. The term blockchain embodies an entirely whole new suite of technologies. Can, therefore, implemented in a lot of ways totally contingent on the objective.
A blockchain is a continuously growing list of records, simply called blocks. It is connected and secured using a writing form called cryptography or cryptology. A block consists of a typical hash pointer as a link to a previous block, a timestamp, and transaction data. On purpose, blockchains are inherently resistant to modification of the data. Blockchain can record transactions between two parties efficiently and permanently. A blockchain can collectively manage a peer-to-peer network, strictly adhering to a protocol for validating new blocks. A data in the one block cannot ex-post facto modified.
Blockchain Technology Applications and Beyond
By design, blockchains are examples of a secure computing system with high Byzantine fault tolerance. Blockchains make a potentially apposite for events recording, medical recording, and other records management activities. Examples are identity management, documenting provenance, transaction processing, or food traceability.
The objective is to apply the technology to other transactions such as keeping track of property ownership. This could revolutionize how businesses and governments operate and citizens carry out their lives. At present, Bitcoin, the most popular cryptocurrency system carries out around two hundred thousand transactions per day. But for wider adoption, the system needs to be able to cope with many millions.
Synopsis in Cryptocurrency Trading
Why Trade Cryptocurrencies Today?
- The field with cryptocurrencies is a fair playing level for retail traders such as us to profit.
- Cryptocurrencies are growing and still a growing market.
- This is a 24/7 market where, you, with the right strategies, can profit heavily from the regular volatility of the market.
Cryptocurrency trading is the Foreign Exchange (Forex) of cryptocurrencies. It means, traders are able to normally trade different bitcoin and altcoin for USD and BTC. Trading cryptocurrencies do not need a mining hardware nor a bitcoin investment in HYIPs (High-Yield Investment Program) or cloud bitcoin mining, which as always bears the risk in their integrity).
Why trade bitcoin or altcoin and not Forex? The reason is, it is easy to go into. In less than an hour, you can start trading bitcoin and earning money. And you should not forget that cryptocurrency trading is too easy to leave.
A huge advantage over Forex is the so-called “smaller spreads”. This is the difference between the asking price and the bid price of the market. For example: In the EUR/USD spread. The asking price and bid price are 1.0933 and 1.0931 respectively. The spread is only 0.0002. Percent-wise, it is just 18% (a spread of 0.0002/1.0933 = 0.018%). Now, for the spread in Bitcoin to USD. The asking price for one BTC to USD is $429 and a bid price is the US $428.999. It amounts to just US $0.001 or 0.0002% percent wise (0.001/429 = 0.0002%). This means that a smaller spread when you exchange, you will have made an almost zero loss while in Forex, after you exchange, you are already at a loss of 0.018%, which is significant.
Margin Trading vs. Leverage Trading
Margin trading and leveraging are possible on some Forex and in addition on Cryptocurrency Exchanges. In Margin trading, peer-to-peer margin fund providers allowed you to use capital from. This means you can borrow buying/selling power, but needed to allocate funds (=margin). But not accessible until you return the lending capital. For example, you want to buy 2 BTC but you only have the US $429. And can done, possibly. But then again on a condition that you will have to pay some interest after you close your position.
Let’s say the BTC closes at the US $450. It will result to making $21 x 2 = $42 winnings. In this example, you only need to subtract a low interest of about 2%, and you have your final winnings. But that is of course if you have predicted the trade correctly. However, you could lose more, when you have a losing position. Or you may opt to use leverage trading on some Forex and Cryptocurrency Exchanges. In leverage trading, you can possibly trade an amount, which at present you do not have at your disposal. Normally, cryptocurrency exchange offers leverage ratio of 1:10. Meaning for each dollar in your possession you get $10 of buying power. To sum up, this means higher risk and possible higher profit.
Investing in Cryptocurrency
Cryptocurrency investing is different than investing in a regular stock. Here’s why? When investing in a company, you are buying shares of that company and essentially owns a percentage of that company. Of course, it totally depends on how big is your investments. When you invest in cryptocurrency, for example, Bitcoin or Ethereum, what you received is digital tokens that serve different purposes. Bitcoin can get you a partially anonymous decentralized cryptocurrency. In Ethereum, what you get is a bit of the ascendancy that runs smart contracts and decentralized apps.
However, there are many other cryptocurrencies (1,300+ as of the last count) and blockchain companies on the stock exchange where prospective investors can channel their money. Many bigger decentralized cryptocurrency exchanges such as GDAX, Bitfinex, Gemini, and Kraken usually proffer solid volume to trade cryptocurrencies via bank transfers or credit cards. Poloniex is another exchange offering more than 80 cryptocurrencies for trading, but the catch is you can just use Bitcoins or any other cryptocurrencies to support this trades. Coinbase is likewise a good choice that is emergent in popularity thanks to its ease-of-use and built-in wallet. However, the tradeoff here is relatively higher fees.
Below we list the 10+ best types of cryptocurrency to invest in now [Q4-2019] based on Market Capitalizations. We hope that this list will further inflame the enthusiasm and understanding of the people interested in cryptocurrency.
10+ Best Next Cryptocurrencies to Invest In Now 
Bitcoin, the most popular cryptocurrency has at present $76.828 + Billion in market capitalization with bitcoin value of $4,469+ each and still rising as of this writing. The price of this cryptocurrencies has multiplied nearly 8x in the last year as of this writing.
Ethereum is arguably the second-most popular cryptocurrency with a market capitalization of around $36,000 + Billion as of this writing. The price of this cryptocurrency has exploded to more than 3000% in the last year. But in spite of the growth, it still remains at less than 1/10th of Bitcoin.
Ripple is a payment protocol that allows instant transaction settlements and reduces transaction fees to cents. By using the power of blockchain, Ripple delivers one frictionless experience to send money globally. It is the quickest and very scalable digital asset, empowering real-time payments worldwide. Banks and payment providers can use Ripple XRP asset to further cut costs and access new markets. As of this writing, it has a market capitalization of around $7,821 + Billion.
Litecoin is a peer-to-peer Internet digital currency acting in a complementary way to Bitcoin. Litecoin price rises more than 2000% in the last year. LTC enables instant, close-to-zero cost payments to anybody in the world. Litecoin offers quicker transaction verification times and value-added storage efficiency than the leading math-based digital currency. As of this writing, it has a market capitalization of around $3.449 + Billion.
NEM is the world’s first Smart Asset blockchain, peer-to-peer cryptocurrency with a market capitalization of around $2.917 + Billion as of this writing. This cryptocurrency (NEM) is responsible for introducing a new blockchain technology features called POI (proof-of-importation) algorithm. With a robust set of features including domain-like namespaces and full on-blockchain Multi-signature control, anyone can completely customize NEM blockchain.
Originally known as Darkcoin, Dash offers more anonymity as it works on a decentralized master code network that makes transactions almost untraceable. Dash’s network has grown to 4,100 master nodes since its launch in 2014, meaning Dash’s peer-to-peer network is one of the largest in the world. It has a market capitalization of about $2.735 + Billion as of this writing.
IOTA is an open-source distributed ledger protocol that goes beyond blockchain through its core invention of their so-called “block-less Tangle”. As of this writing, it has a market capitalization of around $2.465 + Billion. With no fees, IOTA enables companies to explore new business-2-business models by trading on an open market in real time. Blockchains’ consensus is no-longer decoupled but instead an intrinsic part of the system, leading to decentralized and self-regulating peer-to-peer network
Monero is a secure, private, and untraceable cryptocurrency. And as of this writing, it has a market capitalization of about $2,095 + Billion. Monero is more than just a technology. It’s also what the technology stands for. It also gives the full block reward to the miners, who are the most critical members of the network who provide this security. Transactions are cryptographically secure using the latest and most resilient encryption tools available.
Formerly called Antshares, NEO is China’s first ever open source blockchain, claiming to be the Ethereum of China. It has a market capitalization of about $1.787+ Billion as of this writing. It is one of the top 10 cryptocurrencies in the market in terms of capitalization.
OmesiGo is a Fiat & crypto-friendly, cross-chain compatible, and Ethereum-powered with a market capitalization of around $1,075 + Billion as of this writing. OmiseGO has the potential to be a global standard for exchange and payments. OmiseGO is the answer to a fundamental coordination problem amongst payment processors, gateways, and financial institutions.
Last piece of advice
Many cryptocurrencies are mostly duplicates of existing cryptocurrencies circulating in the market with just very minor changes to it. Also, there are so many ways to forever lose cryptocurrency from local storage precisely to malware or data loss. This can happen due to the loss of the physical media which will effectively remove a lost cryptocurrency from the markets forever.
Banning these cryptocurrencies is not the answer or quick fix to ending money laundering and illicit trades, just as banning cash is not an answer to these same problems. Unanticipated events could undermine the bitcoin value as would a superior cryptocurrency could out-compete and replace a bitcoin. The potentialities for failure are infinite, but the one reason for its failure should not because policymakers did not understand its inner workings and possibilities.