With thousands of crypto assets in circulation, how can you choose the most promising ones? The most reliable criteria for comparison is market capitalization. The overall value of a coin reflects investor appetite. However, each cryptocurrency has unique technological properties and a complex story behind its numbers. Which coins should you invest in in 2021? Here are the most robust assets.
1. Bitcoin (BTC)
Bitcoin was the first cryptocurrency based on the blockchain technology. It was created in 2009. Since then, BTC has attracted millions of investors and traders around the world. It still dominates the market with the largest market cap.
The limited supply (just 21 million Bitcoins may be in circulation) makes the asset inherently scarce. The blockchain introduced the proof-of-work protocol, which has been adopted by many altcoins in the systems of decentralized consensus.
2. Ethereum (ETH)
This coin emerged in 2015 within the namesake blockchain. This system is different from Bitcoin, as it is based on smart contracts. While Bitcoin is primarily viewed as a store of value, Ether gains value from facilitation of smart contracts in decentralized financial systems known as DeFi.
Today, Ethereum underlies most decentralized projects. Its supply is unlimited — the total number of coins in circulation is undefined, and it may only be decided by the members of the community. In the near future, the system is expected to replace its proof-of-work (PoW) mechanism with proof-of-stake (PoS).
3. Stellar (XLM)
The Stellar network, which is an open-source blockchain, has its native token called Lumen. The system was founded in 2014 to facilitate low-cost transactions in markets that lacked development at the time. The network does not use the standard mining principle. Instead, all transactions are validated based on the so-called “federated byzantine agreement” algorithm.
4. Binance Coin (BNB)
The Binance network has the native token that facilitates transactions within it based on PoS. The users may pay their trading fees (which are also lower when paid in BNB) and buy different products or services on the network. Relatively quickly, BNB became so popular that it attracted speculators and day traders beyond the exchange.
5. Cardano (ADA)
The Cardano project, which was launched in 2015, also uses the proof-of-stake mechanism. The native cryptocurrency Ada is secured by the Ouroboros protocol. It regulates permission and permissionless blockchain.
The project is supervised by the Cardano Foundation, a not-for-profit group, based in Switzerland. This organization conducts extensive research and experiments with new technologies. So far, its members have written over 90 papers on the subject of blockchain.