Since the creation of Bitcoin in 2008, it has become easier and easier for individuals to create their own new forms of cryptocurrency. All you need to do is create a copy of a coin type already on the market and adjust a few parameters to create your own new cryptocurrency. Because of this, there are a plethora if cryptocurrencies currently floating around the web, and it can be difficult to determine which ones are safe, trustworthy, and profitable.
Unfortunately, a lot of the newer cryptocurrencies available are actually scams, and it can be very hard to determine which ones are legitimate. Those that do serve a more nefarious purpose are just as well-managed and can often gain a good deal of publicity before being unmasked. Some of these currencies will steal your private information, while others simply aren’t worth anything and excel at making it look as though they have value that simply isn’t there.
There are three different areas of importance when deciding which cryptocurrency you should select and trade. Those three areas are Store of Value, DApps, and Privacy.
Best Store Of Value – Bitcoin
Bitcoin is the very first cryptocurrency that hit the market, and many other virtual coins are just copies, clones, and shadow of this original code. In addition, Bitcoins also currently have the largest hashrate of all available cryptocurrencies at around 4.3 billion ghz and climbing. This large hashrate means that bitcoins are the safest digital currency and are the hardest to hack.
Because Bitcoins were the first to appear and are the blueprint that all other alt-coins are based on, they are also usually used as the standard for comparison. Most exchanges will match alt-coins against Bitcoins for transfer, and it is unusual to see two alt-coins paired up in this way. However, Bitcoin’s popularity doesn’t stop users from purchasing alt-coins, and the popularity of other coins still continues to rise.
Benefits of Using Bitcoins
- Bitcoin is the base of all cryptocurrency
- Because it was the first, Bitcoin has the most secure blockchain and the largest hashrate
- It has been around since 2008, so you can be confident that it’s not a scam
Downsides to Using Bitcoins
- Because Bitcoin has such a large blockchain (1MB block size), you are limited to 3 transactions per second.
- This 1MB block size also causes there to be increased fees.
- Lastly, the 1MB block size also cause there to be transaction delays.
All of these block chain issues make trading and mining bitcoins slightly slower than when using other cryptocurrencies.
Best DApps – Ethereum
One of the primary benefits of using cryptocurrencies is that they are not centralized to any individual government, and no one country controls them or affects their value. This idea is used when creating the software that cryptocurrencies run on, which are known as ‘decentralized applications’ or DApps. How decentralized a cryptocurrency’s applications are go a long way in determining how many people will want to use it and how strong it’s value is. The more developers are involved in creating and maintaining the currency, the more decentralized it becomes. The same is true for how open source the code is and how easy it is to have a say in any changes made to the code.
Unfortunately, Ethereum coding language is pretty hard to understand, so it’s got a bit of a barrier to entry in that right. Etherium’s project Metropolis makes the cryptocurrency much easier to use, so it’s release may cause this particular alt-coin to rise in price in the coming years.
Benefits of Using Ethereum
- Etherium also has a rather large hashrate, second only to Bitcoin
- Ehterium is very well-managed and has a very clear leadership team
- Etherium develops and releases the best DApps on the market
- Etherium is backed by actual organizations, such as Microsoft
Downsides to Using Ethereum
- The coding language can be very hard to learn
- The entire system is often too complex for all but the most tech savvy individuals
Best Privacy – Monero (XMR)
Monero is a prime example of the principle that every positive improvement comes with its own downside. In this case, it’s the fact that every bit of added privacy takes a small bit away from a currency’s true usability.
On the one hand, Monero has a dynamic blockchain size, which means that it can grow exponentially without having to worry about the downsides to growth that Bitcoin and many other alt-coins deal with. This means that Monero’s growth doesn’t cause any added fees, and it’s doesn’t make it too difficult for the network to handle. This means that the rewards for mining Monero won’t dry up, and it’s value will always be able to sustain itself.
Monero’s biggest benefits is that it provides a ridiculous amount of privacy to the user. A viewkey is needed to even so much as look at a transaction, and any personal details such as who sent it, how much it was for, and who received it are all encrypted. The FBI has actually expressed concerned about Monero specifically, because it is all but impossible to trace transactions made using this form of cryptocurrency.
The problem with this level of security is that it makes Monero a bit difficult to use. You have to jump through a good deal of hoops to get transactions completed. If you really want to be 100% anonymous with little to no possibility of being traced, Monero is the way to go. Just be prepared for the extra hassle it’s going to involve.
Benefits of Using Monero
- Monero is scalable due to its dynamic blockchain size
- Monero is private no matter who uses it (it’s not an option)
- Monero is fully fungible
- Monero mining does not rely on GPUs
Downsides to Using Monero
- Monero’s GUI is imperfect and still needs some improvement
- Monero is not easy to use, and you’ll have to be prepared for more hassle than a usual transaction
Final Words On The Cryptocurrency Holy Trinity
There are many forms of cryptocurrency on the market today, and just as many factors involved in deciding which one is best for you. All three of the cryptocurrencies listed above are the best in their respective classes, and we hope that one of them will be able to meet your needs perfectly.