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Making Money from the Top Six Cryptocurrencies

Posted by International Living on November 23, 2017 in Money Saving Strategies, Personal Finances

Grace Muigai writing on cryptocurrencies…

You know from the global financial crisis of 2008 that you can no longer depend on Big Bankers. In the recession that followed, some people took this breach of trust seriously and decided a new form of money was needed.

So began the search for a crypto or digital currency.

Over the years, many people have become millionaires from investing in these currencies, and it looks like 2018 is going to be a bumper year for them.

But what exactly are these new forms of digital cash?

And what’s the difference between them?

Here are some of the top ones you’re going to come across when you start looking into the money-making potential of cryptocurrency investment:

1. Bitcoin

Bitcoin is the big daddy of digital currencies. It has over ten million users and has topped $7,000 for a single unit. Back in 2009, an anonymous programmer, who goes by Satoshi Nakamoto, created this cryptocurrency using the blockchain open ledger system. New bitcoins were “mined.” Successful miners verified transactions through complex computing on the blockchain are rewarded with new bitcoins.

The opensource code written by Satoshi in 2009, was not perfect, and Satoshi knew that improvements were necessary as more collaborators and users accepted bitcoin. When a contributor proposes a change, its announced publicly, and a computerized voting process begins. If a majority of users accept the new idea, then the bitcoin code changes in what is known as a “soft fork.” However, if only a small number of users accept a new change, the process is called a “hard fork, ” resulting in a new hybrid bitcoin; as was the case in August 2017

2. Bitcoin Cash

Bitcoin Cash (BCH), created in the August 2017 hard fork, made mining more profitable, so miners readily accepted it. The current value (November 2017) of BCH, is under $600 per coin, with a market capitalization of nearly $10 billion, making BCH, the holder, of the number three market cap position.

3. Ethereum

In 2013, a 19-year-old Russian-Canadian programmer, called Vitalik Buterin, created Ethereum, a cryptocurrency that supports smart contracts. For instance, your washing machine could order detergent from Amazon when it noticed that the supply was running low. If Amazon, doesn’t have the brand of detergent you ordered in stock; then the transaction is automatically refunded to your Ethereum wallet. Ethereum is second after bitcoin, with a global market capitalization of over $26 billion.

4. Ripple

The idea behind Ripple is to use the blockchain for Real Time Gross Settlements (RTGS), replacing the archaic wire transfer system used by banks. Over 90 major banks around the world now use Ripple , which has a market capitalization of $7.9 billion, putting it in the number four position, with a coin price of about $0.20. It’s not as widely known as the more popular currencies, and if you want to purchase it you must first have a bitcoin wallet and then use an exchange like Changelly

.Bitcoin and Ethereum can be purchased on the popular Coinbase (coinbase.com) exchange, along with a third popular purchase – Litecoin Charlie Lee, from California, invented Litecoin in October 2011. Lee characterizes it as a supplementary coin to Bitcoin but points to its faster network and lower transaction fees. It’s more suitable for small transactions than Bitcoin. Litecoin, which has a market capitalization of $2.7 billion, holds fifth place after Ripple. Lee believes its success is attributable to its lower transactional costs.

6. Altcoins

Anyone who has the time, coding knowledge, and enthusiasm to create a cryptocurrency – and validate its existence with some philosophical argument – can do so. The cryptocurrency phenomenon has seen the creation of hundreds of Altcoins.

Once such example is Evancoin, founded by Evan Prodromou, in May 2017. Evancoin is a cryptocurrency that is issued by Prodromou as a form of payment when he consults with clients or prospects for his time. Evancoin is not minable, and it’s unclear if the supply is limited as in the case of other cryptocurrencies. Prodromou controls the circulation and determines the value, like a self-appointed Central Bank.

In the coming year, you’ll come across thousands of Initial Coin Offerings or ICOs, and there is an opportunity to make big gains from them. Some of these will be profitable; others will fail. Seek out the experts who know the market before you decide to invest.

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Image: ©iStock.com/Christian Rummel