Anyone who wants to invest in the crypto market cannot ignore Bitcoin. However, there are also many other interesting cryptos. Did you know that there are more than 7,500 crypto coins in circulation around the world? It is therefore wise to look beyond Bitcoin alone.
Cryptocurrencies can be very different from each other. In addition to the number of coins in circulation, they can also have different transaction speeds and other uses. Examples of applications include making payments and storing information.
All cryptocurrencies that are not bitcoin fall under the collective name ‘altcoin’ or ‘alternative bitcoin’.
Developments
Bitcoin, Ethereum and Ripple (XRP) were the largest cryptocurrencies by market cap between the years 2017 and 2020. However, in February of the following year, something curious happened: Cardano was suddenly in the top 3 list of most valuable cryptocurrencies. This was, however, short-lived.
In this article we will tell you more about the altcoins Cardano and Ripple, starting with Cardano.
Cardano (ADA)
This cryptocurrency was in the top 10 list of largest coins by market capitalization for a while. This year, it suddenly reached the top 3, but then dropped to number 6 on the list of largest cryptocurrencies. But by being in the top 3 – for a short time – many people got to know the coin.
Cardano’s goal is to run financial applications that can be used by various types of consumers worldwide. It is so far the only currency where the blockchain has been developed on the basis of scientific research.
Cardano was founded by Charles Hoskinson; the co-founder of Ethereum. It is therefore no surprise that Cardano and Ethereum are very similar. In fact, Cardano does the same thing as Ethereum, but in an efficient, democratic and decentralized way.
The coin works with Proof of Stake (PoS), the main advantage being that it requires much less computing power – compared to Proof of Work (PoW) – meaning less power is required per transaction and subsequently lower transaction costs.
What advantages does Cardano have?
- Easily adaptable, which can quickly improve the technology of the coin.
- Cardano takes into account the regulations in different countries.
- Great plan for the future: Cardano has many ambitious projects for this year, including improving decision-making and adding scalability.
Are there also disadvantages?
This coin is still under development, so you will not be able to pay with Cardano anytime soon.
Ripple (XRP)
Ripple works with financial institutions and banks – including Santander Bank and American Express.
The purpose of Ripple is to enable fast and cheap payments. You can use this cryptocurrency to make international transfers. It also offers financial institutions the option of using a digital payment protocol.
What sets Ripple apart from other cryptos is that it does not work with blockchain technology. For processing and verifying transactions, Ripple has its own technology – Ripple Protocol Consensus Algorithm (RPCA). In this way, transactions are relatively cheap and consume less power.
What are the benefits of Ripple?
- It focuses on financial institutions and banks: Ripple’s digital payment system tackles the problems of existing payment systems.
- Your payment can be processed within just five seconds.
- Ripple is versatile: it works with financial institutions, allowing the coin to be used to exchange any currency, including crypto.
- You pay $0.0001 per transaction; that is extremely cheap compared to other cryptos.
What are the disadvantages?
People had little faith in Ripple at the beginning of this year. In December 2020, Ripple CEOs were accused of unregistered sales of securities worth $1.3 billion. Fortunately, the case has not had a negative impact on the XRP price , as the price got a boost in the middle of the process, even reaching a three-year high.
Which cryptocurrency should I buy?
It is difficult to determine which are the best coins to buy, and when to do so. Timing is of great importance here. If you buy cryptos for a low ADA price and then sell them for a high price, you can achieve a high return.
It is also not always easy to understand the underlying technology of a crypto coin. However, it is important to thoroughly research a currency before you decide to invest in it.
Ask yourself the following questions:
- Who developed the coin and what was its purpose?
- What are the advantages and disadvantages of this crypto?
- Are there competing cryptocurrencies?
- Who uses the coin?
- How many coins are in circulation?
Keep following the developments and make analyses. As a final tip, we would like to inform you that it is better to focus on several crypto coins instead of only betting on one horse.
