Whether we are buying cryptocurrency or breakfast cereal, we have a long list of alternatives to choose from. What is the top cryptocurrency? That is a vague question because “top” can mean trust, popularity, volatility, security, and several other parameters.
Also, smart investment is not just about the right currency, but also about other questions like “What are the top cryptocurrency exchanges?” and “What is the right time to invest?”.
But for now, let’s answer the question, “What are the top 5 cryptocurrencies?”
Table of Contents
1. Top 5 Cryptocurrencies? Bitcoin:
Bitcoin, being the pioneer of cryptocurrency and the blockchain, is so popular that sometimes it is used synonymously with cryptocurrency. People have gone to the extent of calling it digital gold and speculating that government organizations will adopt it in the years to come.
Currently, it has a market cap (total value of all mined coins) of 1 trillion dollars and sells for 55,000 dollars per coin. The supply of Bitcoin has a cap of 21 million coins, of which 18.9 are currently in circulation.
2. Litecoin:
Litecoin is the next best thing; it is called digital silver. The market cap value of Litecoin is about 13 billion dollars, and it sells at a price of about 200 dollars per coin. The supply of Litecoin is limited to 84 billion coins, of which 66 billion coins are currently in circulation. Launched 2 years after Bitcoin, Litecoin was created as an improvisation over Bitcoin. While the Bitcoin blockchain updates transactions every 10 minutes, Litecoin does it every 2.5 minutes.
3. Ethereum:
Ethereum is a platform that supplies a currency named Ether. Ether has a market cap of $460 billion, and it sells for $4000 per coin. Ether has no supply cap, and currently, there are 115 million coins in circulation. While Ethereum was meant to complement Bitcoin, today, they compete as rivals. Ethereum is superior to bitcoin in several ways.
- The bitcoin blockchain updates itself after every 10 minutes, while Ethereum does it every 14 seconds. So, while Bitcoin can make 4 transactions per second, Ethereum can make 20.
- While Bitcoin makes every computer in the network process all data in the blockchain, Ethereum allows them to divide the work, so that each computer processes only a tiny bit. Hence the total amount of data that the blockchain can process together is much more than Bitcoin.
- Ethereum has smart contracts. A smart contract is the terms and conditions of a contract written into computer code. Whenever certain conditions are met, the consequences are automatically executed without anyone enforcing them. For example, suppose we use smart contracts for a fundraising website when donations have reached the target. In that case, the amount will be automatically transferred to the people in need without a middleman.
4. Cardano
Cardano,started in 2017, supplies a cryptocurrency called ADA. It has a market cap of 55 billion dollars and sells at the price of 1.75 dollars per coin. The supply of ADA has a limit of 45 billion coins, out of which 31.9 billion are in circulation currently.
Cardano has found a thoughtful alternative to the proof of work used in Bitcoin. In order to verify transactions in a blockchain, Bitcoin makes crypto miners compete to solve complex puzzles. Those who win the race get paid in bitcoins, and their records become the official records of the blockchain. In this process, crypto miners have to put in a lot of effort and electricity when they don’t know if they are going to win.
But Cardano has created a proof of stake system, wherein the winner is decided not by a race but by a lucky draw, wherein the more ADA you have, the more likely you are to win. This is more effective for incentivizing users to stay on the blockchain, keeps them happy with small rewards and also saves electricity.
Another interesting feature of Cardano is its ambition to become the internet of blockchains. They want to link blockchains to each other so that we can exchange all kinds of cryptocurrencies on one platform.
5. Internet computer
Internet computer, abbreviated ICP, is a currency launched by a company called Difinity. It was launched only a week ago, and currently ((May 2021), its market cap value is over 30 billion dollars. It employs smart contracts and has a blockchain that works much faster and uses much fewer resources compared to Bitcoin and Ethereum.
The defining feature, however, is its vision to decentralize the internet. They want to get rid of the problem of platform insecurity, which means that if your business is based on a platform typically owned by private organizations, the downfall of the platform can mean the complete collapse of your business. For example, if Google was to shut down suddenly, your blog or your company website will abruptly close. Difinity, through its blockchain, wants to create a system where we don’t need Google or Facebook to support our online presence.
As you can see, there is no one parameter of deciding what the best cryptocurrency is. Some currencies have higher prices, some have innovative blockchain features, while some are based on revolutionary ideas.
All the cryptocurrencies listed above are at different stages of development. Bitcoin is starting to live out its youth, Ethereum and Cardano are securing strongholds, while ICP is showing promise in its infancy. You need to identify what parameter is most important to you and research accordingly.