Money makes the world go ‘round, at least according to the song featured in the musical “Cabaret.” However, we could present a strong argument for changing that today to “digital data makes the world go ‘round.” Come to think of it; there is a resource that fuses money and digital information into a single powerful and fast-growing entity.
We’re talking, of course, about cryptocurrency. But unlike your mundane dollars, pounds, rupees, or yen, cryptocurrency brings a more substantial element of speculation into the financial equation. People don’t just use cryptocurrency; they invest in it.
So, with 2022 around the corner, we are looking at why cryptocurrency is gaining ground and the eight cryptocurrencies best suited for long-term investment in the new year.
But before we explore the best cryptocurrency investments, let's ensure that we're all up to speed on precisely what we mean by "cryptocurrency." Then, it's time to go back to basics and define the term.
Cryptocurrency: A Basic Definition
Cryptocurrency is a form of payment ucoinsed to purchase goods and services online. Many companies have created their own currencies, also called tokens, which are traded for their products and services. However, would-be customers must use real money to purchase the best cryptocurrency.
Cryptocurrencies rely on a technology known as blockchain. Blockchain is a decentralized technology across many computers, managing and recording transactions. Cryptocurrency appeals to users due to the level of security that blockchain provides.
Consider cryptocurrency the digital equivalent of going to a video arcade and purchasing gaming tokens to play the games or going to a casino and buying chips to gamble. In cryptocurrency’s case, however, it’s all digital.
Why Is Cryptocurrency Popular?
At this point, many people have at least a passing knowledge of Bitcoin, one of the most often mentioned cryptocurrencies. However, other cryptocurrencies such as Dogecoin and Ethereum have made more significant inroads into the public limelight. Cryptocurrency acceptance is gradually becoming a thing.
But what is it about cryptocurrencies that have fired up people’s enthusiasm? There are seven oft-cited reasons for the popularity of the best cryptocurrencies.
- Cryptocurrencies aren’t linked to any government: Governments rise and fall, and their nation's currency is usually affected for better or worse. However, since cryptocurrency isn’t defined by nations, it is more likely to remain stable, regardless of any nation's internal difficulties. This borderless stability is desirable to investors.
- Cryptocurrency fees are comparatively low: Cryptocurrency has few fees attached to it, and those fees are less painful than those of other forms of online payment. Thus, people who conduct many online financial transactions discover the benefits of cryptocurrency.
- It’s increasingly easy to use: The more people hear about cryptocurrency, the faster its acceptance grows, and the more merchants accept it. And as more businesses accept cryptocurrency, it becomes a more realistic and viable payment option, sending cryptocurrency acceptance on an upward trajectory.
- Cryptocurrency is very secure: Today, people are justifiably concerned about securing their identity and funds. Thanks to blockchain technology, cryptocurrency offers a high degree of protection.
- You can make money from cryptocurrency: Cryptocurrency offers people the investment potential. Investors can purchase Bitcoin at low prices and, if the price increases, make a decent profit.
- Cryptocurrency is easy to get: How easy is it to buy cryptocurrency? Well, here’s a link that lets you make a Bitcoin purchase. That is how easy it is! Cryptocurrency’s popularity is rising with the ease of obtaining it, which isn’t surprising.
- It’s…THE FUTURE!: Cryptocurrency's advantages drive up its acceptance numbers, but there is still much untapped potential. Consequently, it's seen as a field with many opportunities, and that's attractive to many forward-thinking people. It also helps that blockchain, the technology that has made cryptocurrency possible, is being used in other roles such as data storage. So, people who want to be on the cutting edge of digital technology adopt blockchain and its primary beneficiary, cryptocurrency.
The Top Eight Best Cryptocurrencies
There are many cryptocurrencies available, but here are eight cryptocurrencies to watch in 2022.
Algo is a cryptocurrency for the Algorand blockchain platform with almost $14 billion in market capitalization. The platform supports smart contract functionality and uses a consensus algorithm based on a pure proof-of-stake system. Algo is one of the fastest-growing coins in the world of cryptocurrency, with experts projecting that it will double or triple in value by 2025. Silvio Micali, an MIT professor, founded Algo. Algo's proof-of-stake platform makes the cryptocurrency more sustainable than its rivals, a quality that is becoming increasingly vital in the environmental, social, and governance (ESG) business world.
Of course, Bitcoin, the grand-daddy of them all, must be on this list. BTC accounts for around 40% of overall market capitalization. El Salvador, the first nation to make BTC a national currency, took advantage of the recent bear market to buy 150 coins in early December. Bitcoin is a risky proposition for short-term investors, but it’s a solid bet for the long haul, so it makes the list.
BNB is currently the third-largest token as measured by market cap, which sounds impressive until you look further and realize that’s only 4.1% of the overall cryptocurrency market. Still, it means that there’s plenty of room for growth, and Binance is taking advantage of that, seeing its market dominance rise from 0.7% at the beginning of 2021 to its current 4.1% status. BNB is the Binance Smart Chain’s native coin. Binance Smart Chain is an increasingly popular blockchain, and Binance is the world's single largest bitcoin and altcoin cryptocurrency exchange.
Cartesi attempts to distinguish itself from the cryptocurrency pack by billing itself as an answer to the problems of scalability and other blockchains’ high fees. As of this writing, the cryptocurrency has gained over 3000% in value, with a YTD trading of $1.20. In addition, Cartesi has taken advantage of its ease of trade to become an increasingly popular currency.
We've already mentioned that Bitcoin has the most extensive dominance, and Binance Coin is ranked third, which invites the question, "Who is number two?" Presenting Ethereum, a cryptocurrency with a 21 percent dominance. Ethereum happens to be the most used blockchain worldwide and the favorite network choice in the young but fast-growing field of decentralized finance. And speaking of Ethereum…
Loopring is an Ethereum-based cryptocurrency whose value has skyrocketed in the closing weeks of 2021. The coin currently trades around the $2.98 mark and boasts almost $4 billion market capitalization. The two main reasons for a 700% increase over the last month are rumors floating around about using Loopring in the “metaverse” concept and buzz about GameStop planning to use Loopring to build an NFT marketplace. Thus far, however, neither rumor has been verified.
Shiba was created in August 2020 and has passed market capitalization's $28 billion mark. The cryptocurrency has quickly increased in popularity, breaching the world's top ten list of coins by market cap earlier in December 2021. Shiba is a spinoff from Dogecoin, a cryptocurrency developed as a meme in 2013, but has transformed itself into a versatile coin used to trade for food, shopping, and other services. Although Shiba’s price tends to fluctuate, it has a rosy future thanks to the sustained interest from Redditors and talks of its presence on big cryptocurrency exchanges.
Solana made its cryptocurrency debut in 2020, but its value has quickly exploded more than 15,000% in 2021 to become the sixth-largest coin in the world, boasting a market capitalization of $69 billion. At the start of 2021, a single coin was worth around $1.51, but as of this writing, it’s trading around $229. Solana is one of the most popular coins because it's competing convincingly with Ethereum and has been crowned as the future of blockchain. Solana is also one of the fastest coins, offering 50,000 transactions per second. Additionally, companies like PayPal Holdings have heavily contributed to crypto coins like Solana gaining mainstream acceptance.
So, Where Do We Go From Here?
Like any other investment, even the best cryptocurrency is a risk. After all, if it were a sure thing, then everybody would be doing it. Cryptocurrency could become the wave of the future, but that hinges on greater public acceptance and government policymakers putting together a regulatory framework that makes sense. There are no guarantees that the latter is a solid lock, although if more people use cryptocurrency, it may serve as an incentive to prioritize regulation, which would feed even more growth.
However, all the cryptocurrency market needs is one high-profile incident to scare off investors, and things could turn sour. The advantage of the best cryptocurrency lies in tight security; a single hacking attack could ruin that narrative and destroy confidence.
Nothing is certain, and that's the nature of investments. However, cryptocurrencies have a lot of potential, and if you want a long-term investment that stands a greater than average chance of paying off, you need to look no further.
Are You Interested in Blockchain or Cloud Computing Certifications?
The best cryptocurrency relies on blockchain technology — and the blockchain relies on the cloud. As a result, both are essential parts of today's digital world, so the demand for certified cloud computing and blockchain professionals is still thriving.
If you’re interested in careers in this exciting space, Simplilearn offers a Post Graduate Program in Cloud Computing (in collaboration with CalTech CTME) and a Professional Certificate Program in Blockchain (in collaboration with IIT Kanpur) that can get you on your way. What are you waiting for?