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There are a whopping 6 500 cryptocurrencies out there globally, but not all will make you rich. Bitcoin is the most desirable and is currently available for about $60 000 (about R900 000) per coin with a market cap of about $1 trillion.
However, here are some cryptocurrencies that have the potential to join the big league in the near future.
Bitcoin (BTC)
Market cap: $1 trillion
Billed as the mother of all cryptocurrencies, Bitcoin which is a decentralised digital currency was created by someone called Satoshi Nakamoto (possibly a pseudonym) in 2009.
As with most cryptocurrencies, Bitcoin is without a central bank or single administrator that can be sent from user-to-user on the peer-to-peer Bitcoin network without the need for intermediaries.
Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a Blockchain.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products and services, but the real-world value of the coins is extremely volatile.
Five years ago, you could buy Bitcoin for about $500. Today, it is hovering around $60 000.
Ethereum (ETH)
Market cap: Over $472bn
Available for around $4 000 per coin, Ethereum is a favourite among crypto developers because of its applications like smart contracts that automatically execute when conditions are met and non-fungible tokens (NFTs). It is both a cryptocurrency and a Blockchain platform.
Among cryptocurrencies, Ethereum is second only to Bitcoin in market capitalisation.
Ethereum was conceived in 2013 by programmer Vitalik Buterin. In 2014, development work commenced and was crowd-funded, and the network went live on July 30, 2015.
The platform allows anyone to deploy permanent and immutable decentralised applications onto it, with which users can interact. Decentralised finance (DeFi) applications provide a broad array of financial services without the need for typical financial intermediaries.
Ethereum also allows for the creation and exchange of NFTs, which are non-interchangeable tokens connected to digital works of art or other real-world items and sold as unique digital property.
In just five years, its price went from about $11 to almost $3 000, increasingly more than a whopping 27 000 percent.
Binance Coin (BNB)
Market cap: About $80bn
Binance Coin is the cryptocurrency issued by Binance crypto exchange which is the largest cryptocurrency exchange in the world, supporting more than 1.4 million transactions per second.
Since its launch in 2017, Binance Coin has expanded and can now be used for trading, digital payments, or even booking travel tickets.
In 2017, its price was just $0.10 per coin and now it trades around $400.
BNB was initially based on the Ethereum network but is now the native currency of Binance's own blockchain, the Binance chain.
Binance was founded by Changpeng Zhao, a developer who had previously created high frequency trading software. Binance was initially based in China, but later moved its headquarters out of China following the Chinese government's increasing regulation of cryptocurrency.
Cardano (ADA)
Market cap: Over $71bn
Cardano is recognised for its early adoption of proof-of-stake validation, which means that a person can mine or validate block transactions according to how many coins they hold.
Cardano also works like Ethereum to enable smart contracts and decentralised applications.
In 2017, ADA's price was $0.02 and now, its price hovers around $2.
Tether (USDT)
Market cap: $70bn
Available for just $1, Tether is a stablecoin, which means it is backed by fiat currencies like US dollars and euro.
"Tether represents to users that any holder of tethers can redeem them from Tether the company at the rate of one tether for one US dollar," according to its 2021 settlement by Tether developers with the New York Attorney-General, Letitia James.
In May 2021, Tether published a report showing that only 2.9 percent of Tether was backed by cash, with over 65 percent backed by commercial paper.
Tether is liked by investors who are wary of the extreme volatility of other coins.
Other than these, there are more popular cryptocurrencies like XRP, Solana (SOL), USD Coin (USDC), Polkadot (DOT), and Dogecoin (which has been popularised by Elon Musk).
IANS
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