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Dec 21, 2017
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Whether you call it a scam, passing fad, or a big bubble just about to burst, Bitcoin’s popularity and its rally against the dollar continue to baffle both cynics and enthusiasts. However, is bitcoin the only cryptocurrency worth the risk? There are other altcoins to watch. Read on to find out.
As crypto faithful investors continue to look for the next bitcoin, it is equally important to note the financial implications that surround the cryptocurrency craze. Right now bitcoin is playing out in such a big way that no one wants to miss out. According to George Tung, co-founder of Cryptos R Us and a prominent investor in digital currencies, there is an untapped investment opportunity in lesser-known coins. Asked about the possibility of another coin exceeding Bitcoin’s market cap, he said, “Yes, I believe that is definitely possible within the next three to five years.”
Another financial expert concurs:
The alts industry is new and it will take at least a few years to become mainstream…we can see 10x gains—like the bitcoin this year, in many altcoins,
said Hitesh Malviya, a consultant associated with ItsBlockchain.com. Hitesh believes that bitcoin might be leading the way right now, but eventually, the big achievements in cryptos are elsewhere.
Altcoin Market Situation in 2018
Currently, the crypto market has more than 1,300 altcoins. With that big number, it’s not easy for both aspiring and existing investors to filter through the maze and uncover a coin with investment potential other than bitcoin. Tung provides a four-part checklist to determine which alt-coin may be a long-term winner.
- Study the source. “Where do they come from? Have they been involved with other cryptos before? Are they backed by anyone? What kind of experience do they bring? The alt-coins that have done the best and have the highest market caps have the most proven teams.”
- Consider the why. “How useful is this? Are they trying to solve a problem that doesn’t need solving? Some alt-coins coming out are simply ridiculous.”
- Find out their position in the process. I look at the roadmap of the alt-coin and see how far along are they. Do they have a test-net or beta? Are the new features being released? Are there soft or hard forks coming up?”
- Review the valuation. “Since all alt-coins get pumped and dumped a lot, I look at the current market evaluation and see if they are priced right. A lot of alt-coins are priced way too high and I tend to stay away from them.”
Abreast with these tips, analysts recommend seven digital currencies, other than bitcoin, which you should watch in 2018. Even so, the disclaimer is that all cryptocurrencies, Bitcoin included, are prone to great volatility and risk. Before you take the plunge, it’s advisable to do your due diligence and dig up more information about your preferred currency.
Cardano (ADA)
The #1 currency for us in 2018. 10x potential.
Market cap, as of Jan. 5: $27 billion
Performance in 2017, as of Jan. 5: +5100%
Source: Ethereum Co-Inventor and former CEO Charles Hoskinson
Takeaway: People praise this altcoin as the 3rd generation of blockchain and cryptocurrency! Bitcoin being the first one. Ethereum the second one.
Cardano (ADA) is a
cryptocurrency that is developing a smart contract platform which seeks to deliver more advanced features than any protocol previously developed.
One of the advanced features is to input more information in each transaction. Bitcoin and other Altcoins have only the function to reasign value. With Cardano, the developers want to give out the possibility to also give out access to deeper accounting and other data, so the blockchain can be used in more business cases.
It will also offer quantum resistance signatures, meaning that there are even more combinations of characters to form a private key, which means that in future computers will not be able to guess the private keys.
Cardano will also focus on sidechains as much as possible. This is to allow better scaling and more functionalities.
Litecoin (LTC)
Market cap, as of Dec. 19: $19.53 billion
Performance in 2017, as of Dec. 19: +9,080%
Source: Charlie Lee, former Google employee
Takeaway: analysts and investors describe it as the silver to bitcoin’s gold.
Charlie Lee created Litecoin back in 2011. Since then, the currency has been a suitable bitcoin substitute. Without getting too wonky, Lee’s major aim was to reduce the time required to validate new transactions. The creation of Litecoin also sought to give everyone the opportunity to mine cryptocurrency. According to Lee’s statement on Litecoin, “My vision is people would use Litecoin every day to buy things. It would just be the payment of choice.”
In addition, Litecoin was meant to produce more coins in the market. With 84-million coin cap, it exceeds Bitcoin’s 21-million limit by far. Currently, 54 million Litecoins are in circulation against Bitcoin’s 16.7 million.
Monero (XMR)
Market cap: $5.9 billion
Performance in 2017: +3,033%
Source: Anonymous (much like bitcoin)
Takeaway: Monero’s takeaway is the anonymity that it brings to the table. While the coin utilizes the blockchain technology to make everything transparent, every detail remains untraceable. Transaction details including size, senders, and receivers are concealed such that no one can trace them, leading to complete anonymity. However, some analysts argue that the feature might favor the interest and operations of cybercriminals.
Even so, every cryptocurrency has its share of challenges and vulnerabilities. There are cases where hackers demand bitcoin and Monero lovers argue that the currency can be a suitable bet for users who would like to circulate money without the knowledge of their competitors. For instance, a trader who would prefer to remain anonymous or a businessperson in a foreign country trying to conceal identity to avoid becoming a target would find Monero more convenient. According to a recent report by Monero, popular musicians in the entertainment sector already expressed interest in Monero. Currently, nearly 15.5 million XMR is in circulation and the currency has no fixed coin supply.
Neo
Market cap: $5.1 billion
Performance in 2017: +69,219%
Source: Da Hongfei (CEO of Onchain) and Erik Zhang
Takeaway: It is dubbed the “Ethereum” of China.
According to Tung, the Neo will experience an exponential growth when China lifts the conditions imposed on bitcoin and ICOs. With a market cap of 61 billion dollars, Ethereum comes second after Bitcoin. This is a clear indication that the currency has a long way to go.
Recently, the founder Da Hongfei dispelled fears that cryptocurrencies are getting overheated. “I would say that there is a bubble in this industry, but would say it’s OK…Every technology that is so disruptive—there’ll definitely be bubbles, like the train or the automobile.” Da Hongfei said in a recent interview with CNBC. Created in 2014, Neo has a market circulation of 65 million from its target of 100 million coins.
Bitcoin Cash (BCH)
Market cap: $37.08 billion
Performance in 2017 (since July): +488%
Source: a hard fork of original Bitcoin, currently controlled by a team of developers
Takeaway: one of the newest digital currencies in the market
Bitcoin Cash is incompatible with the original bitcoin, making it independent. The currency was created to solve the issue of high fees and network congestion that was associated with the original Bitcoin. The cryptocurrency has the capacity to handle bigger transactions faster, even with lower processing fees. A thoughtful discussion regarding BCH and the original coin is available here. All the same, Bitcoin Cash still struggles with adoption. The main challenge is to convince the businesses and investors to use both the original bitcoin and its rival network. Another challenge is to convince miners to take part in clearing transactions. Sometime in November BCH raced to become the second most valuable digital currency, beating Ethereum. However, it fell back and is currently in the third place. The current supply in the market is 16.8 million out of its cap of 21 million coins.
With the changing cryptocurrency landscape, this guide may not be exhaustive. It’s also important to note that the figures given in this article are as of December 19, 2017. Other digital currencies to watch are Cardano, Ripple, and Iota. However, it does provide a snippet of what to look for in the cryptocurrency ecosystem.
Image from Shutterstock
