The recent sharp rise in the price of bitcoin and other cryptocurrencies has made a lot of people quite wealthy. Naturally, this has lead to a large number of newbie investors pouring their money into what has become known as the “altcoin” or “crypto coin” arena.
These are essentially digital versions of traditional currencies such as the euro, the yen, and the dollar. Some of the more popular ones are ethereum, ripple, litecoin, and many others.
Their price increases when mainstream investors become interested in purchasing them. What exactly is driving the interest? Let’s take a closer look.
Why Are People Interested In Investing In Crypto Currencies?
The price of bitcoin and other cryptocurrencies can fluctuate significantly, making this a very risky investment for a layperson. However, many newcomers to the arena have decided to ride the wave of success and are looking to diversify their portfolio with a cryptocurrency that they can understand.
Since cryptocurrencies are not controlled by any government or central bank, they are essentially risk-free investments. Moreover, the number of people engaged in cryptocurrency mining makes for huge interest in this market as well. As the complexity and difficulty of mining increases, so too does the price of bitcoin and other cryptocurrencies.
What Is Bitcoin?
Bitcoin is the most popular and arguably the most popular cryptocurrency. Launched in 2009, it is decentralized and operates without any central authority. Moreover, bitcoins can be traded for other currencies or stored as an asset that can be used for online purchases.
As of February 22, 2020, one bitcoin is worth $12,928. This is an all-time high for the flagship cryptocurrency and reflects its increasing popularity.
Is Bitcoin A Safe Investment?
Given its decentralized structure and status as a precious metal, many people consider investing in bitcoin to be a low-risk venture. Since there is no governments control over the bitcoin network, investors cannot lose their money due to government interference or unusual market fluctuations.
Moreover, due to its increasing popularity and desirability as a store of value, many mainstream economists, investors, and analysts consider bitcoin to be a safe haven for your money.
Is Ethereum The Next Big Thing?
Ethereum is the second-most popular cryptocurrency after bitcoin. It was launched in 2015 and is also decentralized. It is considered the “crypto token” because it is a platform that can enable developers to build and deploy decentralized applications (dApps).
These are essentially software applications that operate without a central authority and are often used for sending and receiving payments.
The developers of ethereum are working hard to ensure that their cryptocurrency is as useful and applicable as possible. For example, they recently collaborated with global brands to develop solutions to fight online fraud. These brands invested in the development of the ethereum ecosystem and now have the opportunity to work with the security team behind the curtain.
Is Ripple The Next Big Thing?
Ripple is the most popular cryptocurrency designed for use in cross-border transactions. It was originally developed as an open-source platform that enables financial institutions to quickly and efficiently send money globally. It was launched in 2012 and is considered a “crypto-asset” because it serves as a store of value and an investment.
One of the distinguishing features of ripple is that it uses a blockchain. This is a digital ledger that is always accessible by the public and which is continuously updated and verified by the network. This makes it much more secure than a regular database because there is no single point of failure. For instance, if a hard drive fails, the entire ledger is still recoverable. This is one of the reasons why so many investors are choosing to purchase ripple.
What About The Future Of Crypto?
The future of cryptocurrencies is certainly promising, but it is also extremely volatile. It is still quite early in the evolution of cryptocurrencies and blockchain technology, so much remains to be seen. Fortunately, many practitioners, experts, and analysts are keeping a close eye on the emerging technologies and preparing for the next big wave of adoption.
Some are even going so far as to say that 2020 is going to be the year of blockchain and crypto. Many people consider these technologies to be the future of finance, especially given their ability to disrupt traditional industries such as real estate, banking, and insurance. In addition, many countries have banned or restricted the use of cryptocurrencies, making it difficult for individual investors to participate in this market. However, with so much attention and interest focused on cryptocurrencies, it is quite possible that regulation will take a back seat and allow wider adoption.