What is virtual currency?

Virtual currency is a form of digital money that is not controlled, issued by the government, but created and managed by developers. This currency is used and accepted among members of a particular virtual community.

As defined by the European Banking Supervisory Authority (EBA), a virtual currency is not a digital currency issued by a central bank or public authority, nor is it necessarily tied to money. courthouse. Cryptocurrencies are accepted by specific groups or communities as a means of payment and can be transferred, stored or traded electronically.

Cryptocurrencies are only available in electronic form and not in physical form. It is stored and traded only through designated software, mobile apps, computers, or through a dedicated digital wallet, and transactions occur over the Internet or over secure dedicated networks. Cryptocurrencies are considered a subset of the digital currency group, which also includes cryptocurrencies.

List of the 10 best cryptocurrencies to invest in in 2021

What cryptocurrencies to invest in is a hot question for bitcoin and crypto players. However, there is never a perfect investment, each cryptocurrency has its own pros and cons. According to your judgment, you can find a particular cryptocurrency. Keep in mind, however, that a diversified portfolio is a must for direct risk mitigation.

1. Bitcoin (BTC)

Bitcoin is at the number 1 position in the list of top 5 cryptocurrencies to invest in. Since its release in 2008, Bitcoin has been the best performing and most popular cryptocurrency, both in terms of market cap and transaction volume.

Advantages:

Despite its volatility, Bitcoin is one of the most stable cryptocurrencies because it is difficult to manipulate bitcoin transactions by individuals or some institutions, which requires a lot of money.

Bitcoin is scarce and useful. Take gold as an example. Limited amount of gold. With new gold mining, the remaining gold will decrease. When the market gets chaotic, the price of gold usually goes up, making it one of the best investments to avoid risk. The same is true of Bitcoin. There are only 21 million bitcoins. As time goes by, demand increases and supply decreases, eventually the price will rise.

Compared to other cryptocurrencies, Bitcoin has the highest brand recognition, liquidity, and has become the most favored by the growing number of traders, including well-known companies such as Expedia and Overstock.

Bitcoin also makes cross-border payments easier. You can clearly see how many bitcoins you own or how many bitcoins are in circulation. No bank can block your transaction or close your account because Bitcoin can be sent from anywhere in the world.

Disadvantages:

Bitcoin transactions will cost more as the increasing demand puts pressure on Bitcoin’s network. The bitcoin system only processes about 7 transactions per second, is slow and consumes energy.

The use of BTC coins still depends largely on the availability of the internet.

The Bitcoin system cannot be scaled down, which limits the speed and number of transactions.

Some think that the appeal of Bitcoin is that it can be anonymous so BTC can be used for illegal or anti-social behavior.

Bitcoin’s core strongly invades the powers of governments, banks, regulators, and censorship systems, so BTC can face a lot of opposition and anti-social behavior.

2. Ethereum (ETH)

Ethereum, created in 2015, is a computing platform for the introduction of smart contracts that allows developers to develop distributed applications (dApps) based on blockchain technology. Ether (ETH) refers to the token that supports transactions on the Ethereum platform.

Advantages:

Ethereum is massive with its dApp ecosystem. There are currently 250,000 developers using Ethereum to start their smart contract projects.

Ethereum has investor support. There are large venture capital funds that invest in projects built on ETH, which directly affect the price of Ethereum. For example, the virtual game CryptoKitties, created on Ethereum, received $ 12 million in investment.

Ethereum has a clear future plan. Ethereum has always been at the forefront of industrial innovation and its plans not only in blockchain, but also in the tech community. Ethereum’s project list has many potential projects that will develop in the future, including: crop insurance, agricultural decentralized data, savings wallets, cloud computing, P2P betting, …

Disadvantages

Insufficient guidance and information. Very few online tutorials and documentation make it difficult for beginners to develop on Ethereum.

There are often version upgrades or technology upgrades at any given time. Developers need to move the project’s technology and network from the old Ethereum platform to a newer efficient one, which keeps developers busy.

Using uncommon programming language. Ethereum uses its own programming language, Solidity, which leads to code errors. Platforms similar to Ethereum have emerged. It allows the use of more familiar languages ​​like Javascript.

Technical difficulties. Sometimes, the Ethereum wallet will not sync properly with the blockchain.

For sure, Ethereum has proven to be the most successful altcoin to date, and it is expected to continue to grow in the future with its popularity.

3. Litecoin (LTC)

Litecoin was released in October 2011 through the open source platform, Github. Litecoin is the first altcoin in the world and has been listed in the Top 5 cryptocurrencies with market value since 2017.

Advantages:

Litecoin is open source: Since Litecoin is a fork of BTC and is open source, it is an open source system that makes it easy to update software to meet changing market needs.

Litecoin is scalable. All other cryptocurrencies, including Bitcoin, cannot be miniaturized. It means the more transactions in the world, the more time and cost per transaction.

Compared to Bitcoin, Litecoin is very fast. It processes the transaction every 2.5 minutes, while Bitcoin takes 10 minutes.

Litecoin also has relatively low transaction costs and has a significant advantage over Bitcoin and many other cryptocurrencies. This makes it a great cryptocurrency.

Litecoin mining is intended to be open to amateurs, while bitcoin mining requires more professional miners to use expensive hardware.

Disadvantages

Although it is still more efficient and faster than Bitcoin, its uniqueness has gradually diminished with the technical update of Bitcoin and other cryptocurrencies.

4. Ripple (XRP)

XRP was launched by the Ripple company in 2012 and is now one of the largest cryptocurrencies in the world. The Ripple company has developed a series of solutions to change the global payments industry. Its main goal is to establish a global payment network, thus ensuring more efficient transactions between world financial institutions. XRP is the name of the digital currency whose transactions operate on Ripple’s network.

Advantages:

Blockchain technology allows Ripple to support any need for transactions in different environments, without the limitations of time, location, and even currency. In other words, its biggest advantage comes from unlimited payments.

The Ripple network supports instant transactions at low cost. Cross-border payments, with traditional fiat currencies usually require a 3-5 day confirmation process, but XRP transactions only take 4 seconds.

Fast and cheap transactions are the main advantage of the Ripple cryptocurrency. Currently, the price per transaction is $ 0.3. XRP cannot be mined, so there is no need to pay mining fees.

Ripple works with more than 100 banks, including Bank of America, Swiss Bank, Standard Chartered Bank, American Express Bank and many others.

Unlike many other cryptocurrencies, Ripple is regulated. Because Ripple needs to work with traditional financial institutions, they require more complex compliance.

Disadvantages

To be precise, XRP is not a completely decentralized digital currency. The majority of Ripple (XRP) coins are controlled by a handful of the Ripple company. This means that Ripple is at greater risk of volatility.

Although XRP’s market value is high, its actual circulation is not great. In this case, it means that the risk and volatility will be higher. Historically, Jed McCaleb, one of Ripple’s founders, has stated that he will sell 9 billion Ripple of his own, causing the price to plummet.

While the Ripple system itself has good publicity, cross-border payments are a very complex process, current users are mostly speculative, and they haven’t made good use of Ripple for cross-border payments.

Ripple’s real goal is to replace the Global Interbank Financial Telecommunication Association (SWIFT), from becoming a world currency. SWIFT is used for cross-border transactions between banks in many different countries. There are approximately 7,600 SWift members worldwide.

5. Bitcoin Cash (BCH)

Bitcoin Cash (BCH) is an alternative to Bitcoin and is one of the most valuable cryptocurrencies in the world. Bitcoin Cash (BCH) was first introduced on August 1, 2017 as a hard fork of Bitcoin. The basic idea of BCH is to use the Bitcoin protocol and increase the block size, which will allow the Bitcoin Cash network to process more transactions at lower costs.

Advantages:

Unlike Bitcoin with a block size limit of 1MB, BCH has a larger block size (8MB). As a result, more transactions can be processed at a lower cost, with better efficiency.

Bitcoin cash was created to reduce the time and cost of Bitcoin transactions. If scalability hurdles continue to be Bitcoin’s problem, this could be good news for Bitcoin cash.

Bitcoin cash recognizes the weaknesses of Bitcoin and is technically improved to make the BCH coin more secure.

Like Bitcoin, the total supply of Bitcoin Cash coins is equal to 21 million coins. Before buying, consider the impact of this limited supply on the value of money.

Disadvantages

Bitcoin cash is highly centralized. Currently, there are 3 mining pools, accounting for more than 51% of the amount of BCH. This is quite risky as the future of BCH depends heavily on these 3 mining pools.

Bitcoin cash is not widely accepted yet. Just like any other virtual currency, the value of BCH will be affected by community adoption.

6. Binance Coin (BNB)

Year of birth: 2017

Father: Changpeng Zhao, a Chinese-Canadian business director, former member of the Blockchain.info development team and also the technology director of OKCoin

Advantages:

Binance Coin token allows users to effectively trade dozens of different cryptocurrencies on the Binance platform.

BNB is used to facilitate transaction fees on exchanges, and can also pay for certain goods and services, including travel fees, and more.

Disadvantages

Limit on Binance exchanges:

Since BNB developers plan to buy back a certain amount of money, its value is likely to decrease, leading to a price crash.

The impact of Chinese regulatory policies because of its headquarters in Shanghai, China.

7. Chainlink (LINK)

Although this LINK token was just launched in September 2017, it is currently showing amazing performance. The number must make many people overwhelmed with more than 7347.25%. LINK is fluctuating around $ 11.81 and more likely to grow in the future

8. Stellar (XLM)

Stellar is a fast decentralized open source payment technology from Ripple. His purpose is to connect financial institutions to minimize costs and time. Before the shift of the crypto market XLM also achieved a pretty good performance of 4428.55% and is currently trading around $ 0.134.

9. Cardano (ADA)

ADA is known as the cryptocurrency of the Cardano blockchain network released at the end of 2017. This coin is currently showing its strength and potential when giving a performance of 753.91%.

An extremely impressive figure, with Cardano’s clearly outlined development roadmap, ADA coin promises to have a lot of growth potential in the future. It is currently trading around $ 0.185.

10. TRON (TRX)

TRX is a cryptocurrency that works on the TRON blockchain and is built on the Ethereum ERC-20 standard.

TRX’s purpose is to enforce smart contracts, pay transaction fees and creation fees. By 2020 the coin has achieved a performance of 1234.69% so far and is currently trading around $ 0.027.

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