There is a great array of different coins in the cryptocurrency trading arena ranging from Bitcoin (BTC) to Sia Coin (SC). There is almost a new altcoin with the potential of changing the crypto landscape popping up every day.
So, with so many choices available for purchase, how do you find the right cryptocurrencies to invest in?
Everything depends on your goals and application areas when it comes to finding the best altcoins to invest in 2020. Also, knowledge about cryptocurrency trading and the market will help minimize the investment risk.
Let’s look at the pros and cons of all the option available and see whether you should buy bitcoin or altcoin in 2020.
Who Creates the Cryptocurrencies in the Market?
Let’s keep bitcoins and altcoins aside. There are so many other cryptocurrencies in the market among which bitcoin happens to be the most successful. What’s more, blockchain, the technology behind cryptocurrencies has made it comparatively easier to recreate coins.
Due to this factor, many entrepreneurs came up with their own digital coins to rival bitcoin trading. This resulted in a wealth of altcoins in the market.
Bitcoin – Cryptocurrency’s Poster Child
Bitcoin released in 2009 taught the world about blockchain technology and the proof-of-work principle. Right from its advent, bitcoin’s popularity rose immensely, and it is still a prominent cryptocurrency. More than 18 million bitcoins are in circulation now and its total value is estimated to be somewhere around $154 billion.
Ethereum closely follows bitcoin being the second-largest cryptocurrency with a total market cap of $16 billion.
Now, you might be wondering how bitcoins are created.
Bitcoins are mined. Individuals called miners find bitcoins and put them into circulation to bag rewards. Additionally, miners are also responsible for maintaining the ledger by validating bitcoin transactions.
So, what are the advantages of bitcoin trading?
- Bitcoins is a widely accepted form of cryptocurrency. In fact, it is also considered an actual form of payment.
- Most people prefer bitcoin trading.
- It is even accepted by certain financial institutions.
- It has a vast community of users who supports its long-term development.
- There is also a mighty pool of miners who ensure the network’s safety.
And, the disadvantages of bitcoin trading.
- Bitcoin’s price took a humongous hit from December 2017 after which it hiked up to $20,000. Though the price is positive currently, we never know it will ever reach such a height in the future.
- Bitcoin was made with the aim to promote super-low transaction fees. However, miners having the ability to choose transaction fees often go for higher fees.
- Bitcoin mining results in heavy energy consumption which can lead to environmental damage. This has led people looking for an eco-friendly alternative.
The Greater Potential Altcoins
As stated earlier, bitcoin is the real cryptocurrency. But, various other alternative coins have been brought into existence under the name altcoins. Look at the list of altcoins available in the market.
Some of the altcoins like Ethereum and XRP are pretty popular in the market with high demand. Check out a few of the altcoins market cap below (as of January 14th, 2020):
- Ethereum: $16 Billion
- XRP: $9.5 Billion
- Bitcoin Cash: $5.1 Billion
- Tether: $4.6 Billion
- Bitcoin SV: $3.6 Billion
- Litecoin: $3.4 Billion
- EOS: $3 Billion
- Monero: $1 Billion
Now, to the advantages of altcoins.
- First thing, they serve as an alternative to bitcoin.
- If bitcoin meets faces a crisis, you can fall back on altcoins.
- Most of the altcoins are created to serve a specific function.
- Altcoins offer various systems that can be processed to Bitcoin.
Disadvantages of altcoins.
- They lack exposure and aren’t widely accepted except for a few altcoins like Ethereum, XRP, and Bitcoin Cash.
- The outlets where you can use altcoins are limited.
Bitcoin’s popularity around the world and the support it receives doesn’t prove altcoins are insignificant. By investing in altcoins, you can diversify your portfolio. Nevertheless, make sure you do your homework and make the right purchase.