Bitcoin and other cryptocurrencies are on the brink of getting big. Unlike years past, cryptocurrencies lost credibility as their price increased, and these three have managed to retain their popularity. As they continue to attract new users and prove that there is more to them than the initial hype, here are some predictions for what could happen next.
What’s the difference between Bitcoin, Ethereum, and other cryptocurrencies?
There are more than 1,000 cryptocurrencies on the market today. Although some currencies have attracted significant digital securities investments from major financial institutions such as JP Morgan and Citibank, they still hold very little value compared with established currencies such as the US dollar.
Although some of the most popular cryptocurrencies include Bitcoin, Litecoin, and Ethereum, there is a significant difference between them to help new users pick one over another. And with different trading strategies like hodl, there are many coins that could be successful down the road. Here is a quick rundown:
Bitcoin:
The original cryptocurrency was launched in 2009 by an anonymous programmer known only as Satoshi Nakamoto. Despite this digital currency’s initial hype and popularity, it has struggled to regain its former glory as it lost 50% of its value after reaching a peak of $3,000 in mid-December.
Ethereum:
Launched in 2015 by Vitalik Buterin and Joseph Lubin, Ethereum is a decentralized software platform designed to make blockchain technology more accessible for everyone.
Litecoin:
Launched in 2011 by Charlie Lee, Litecoin is a peer-to-peer cryptocurrency that uses open-source software to generate litecoins. Litecoin has managed to attract significant interest over the years thanks to its ability to handle more transactions than bitcoin. It also has lightning fast transaction times of 30 minutes, far shorter than bitcoin’s average of 10 minutes.
How popular are cryptocurrencies?
The price of bitcoin reached an all-time high in December 2017 when it climbed past $19,000. Despite correcting lower since then, it still remains above $11,000.
Ethereum, on the other hand, has managed to stay above $900. It has shown a steady increase over the years and is likely to continue attracting investors as they look for alternative markets for capital.
Are cryptocurrencies legal?
Although cryptocurrencies such as Bitcoin, Ethereum, and Litecoin were created to enable transactions without the need for a central authority such as a bank or government institution, they are not completely legal. In fact, most countries treat cryptocurrencies as property rather than actual currencies that can be used to buy goods and services.
How can I buy cryptocurrencies?
The easiest way to get your hands on some of the most popular cryptocurrencies, such as Bitcoin and Ethereum, is to buy them using a bank account transfer. If you want to purchase large amounts of bitcoin and other major virtual currencies, make sure to compare fees between different platforms. Coinbase, for example, charges a 1% commission for bank account transfers up to $1 million, while the fee increases are significant when you try to process more considerable sums.
You can also use peer-to-peer trading platforms such as LocalBitcoins. These sites allow individuals to buy or sell bitcoins or other cryptocurrencies in return for fiat currency such as dollars or euros.
How can I store cryptocurrencies?
When people think about how to store bitcoins, they usually choose to either use an online wallet service or a cryptocurrency hardware wallet. While both of these options offer similar features, there are some notable differences between them.
- Online wallets offer many benefits for both new users and advanced users. It is easy to use both beginners and experienced traders due to the easy interface that does not require downloading additional software. When you deposit money through your bank account, your transactions are done quickly and instantly without the need for any other inputs or downloads. However, storing large amounts of cryptocurrency requires substantial security measures because hackers try their best to steal digital currencies every single day.
- Cryptocurrency hardware wallets, on the other hand, offer extensive security features such as extra authentication and encryption. They ensure that you can recover your digital currency even if you lose your private key or forget your login details. However, they are pretty expensive and difficult to use for newbies, and they also do not offer the same convenience as an online wallet.
What to expect in the future?
Bitcoin
The price of bitcoin is likely to continue climbing higher as it fights back against its competitors. It is still the king of the cryptocurrency market, with a market cap of $110 billion.
- Many people believe that bitcoin’s decentralized nature could facilitate faster payments between financial institutions than those offered by traditional online payment methods such as PayPal.
- There are also talks about how bitcoin could facilitate global trade by making payments across borders more efficient. However, despite these positive developments, there are still risks involved with using bitcoin. The cryptocurrency has been marred by massive hacks that have stolen people’s funds. The price crash of bitcoin after China banned ICOs in September 2017 was also a significant setback for investors.
- Many believe that the cryptocurrency’s value will continue to increase as the government crackdown on cryptocurrencies.
- Many countries are now taking steps to regulate digital currencies such as bitcoin instead of banning them, although it remains unclear how these regulations would affect their users.
Despite this, bitcoin is expected to remain an essential asset for investors as long as it remains unregulated by central banks and governments.
Ethereum
The price of Ethereum has been consistently increasing as it attracts more investors. The cryptocurrency has proven its resilience time and again after it survived the crash of the DAO and the split between Ethereum and Ethereum Classic. This resilience is expected to continue attracting investors as they look for alternative markets for their capital.
Ethereum has also attracted considerable attention from giant conglomerates such as IBM and Microsoft. These companies have made significant investments in blockchain technology, specifically in smart contracts. They also use Ethereum’s native token, ETH, to conduct transactions between clients and its businesses.
Conclusion
Bitcoin, Ethereum, and other cryptocurrencies have been subject to many controversies since they were first introduced. Despite the many risks of crackdown using them, more people are starting to invest in them as they look for alternative investment opportunities. However, it is crucial to understand the different types of cryptocurrencies before deciding whether a cryptocurrency wallet or some other related service is right for you.