Figuring out the best cryptocurrency to invest in 2021 and how to invest in cryptocurrency can be confusing to new investors. Investing used to be simple: stocks, bonds and real estate. However, the investment process today is much more complicated. As a result, there are an infinite number of choices that are difficult to understand. One of the new investment choices available to investors is cryptocurrency.
Although we cannot advise you on what you should invest in, we will share information about the best cryptocurrency to invest in 2021, what cryptocurrency is, the pros and cons of owning cryptocurrencies and some future predictions.
It seems clear that the future is bright for Bitcoin and Ethereum. We will discuss why these two cryptocurrencies deserve serious consideration as the best cryptocurrency to invest in 2021. In addition, we talk about some other options for cryptocurrency investing.
What is Cryptocurrency?
Cryptocurrency is a digital asset that can be exchanged. It is a payment method between individuals. It is exchanged among individuals on the internet. Furthermore, cryptocurrencies use cryptography to secure transactions on a block chain network. Miners use powerful computers to solve advanced equations in order to earn Bitcoin or other cryptocurrencies. Finally, mining makes the distributed ledger network secure.
The first successful cryptocurrency was Bitcoin. It was introduced to the world in January 2009. After Bitcoin came Ethereum. If Bitcoin is king, then Ethereum would be the queen. These two cryptocurrencies may be the best cryptocurrency to invest in 2021 in our lifetime. However, all investments come risks and you must do your own research to determine how to invest personally.
Bitcoin: A Peer-to-Peer Electronic Payment System Created by Satoshi Nakamoto
Bitcoin is an open-source, block chain-based technology that was designed as a peer-to-peer payment system. It is designed to be a decentralized electronic payment method. Payments can be conducted semi-anonymously among individuals. Bitcoin is digital cash. Many consider Bitcoin to be the best cryptocurrency to invest in 2021.
Furthermore, it uses block chain technology to maintain its function. In order for users to send and receive bitcoin, the block chain depends on miners. Miners use computers to complete complex calculations. The Bitcoin miners build blocks on the block chain. As a reward, the miners receive Bitcoin as payment.
Satoshi Nakamoto created Bitcoin in 2009. He wrote a 9-page white paper entitled, “Bitcoin: A Peer-to-Peer Electronic Cash System.” Bitcoin was the first cryptocurrency to experience widespread use and adoption. However, its use case has evolved over the years from a peer-to-peer payment method to a store of value model. Many Bitcoin users hold bitcoin much like you would hold silver or gold in an investment portfolio.
Why Bitcoin May Be the Best cryptocurrency to invest in 2021
- First cryptocurrency to experience widespread use and adoption
- $1 Trillion market capitalization
- Use case as a peer-to-peer payment method
- Serves as a store of value much like silver or gold
- Deflationary money: Limited supply of only 21 million Bitcoins
- Replaces the US Dollar as World Reserve Currency
- Independence from Banks
- Borderless Payments
- Low Fees
- Meets all the requirements of the definition of money
Ethereum: A Block Chain Project That Uses Smart Contracts to Power Other Projects
Ethereum is an open-source, decentralized block chain project that is known for its smart contracts. For example, it provides open access to money, via the Ether cryptocurrency coin (ETH), and technology, exemplified by the thousands of applications that are operating on the Ethereum network. The ETH coin of Ethereum is second only to bitcoin in market capitalization.
Like Bitcoin, Ethereum is a Proof of Work consensus system. This means that powerful computers all over the world are continuously solving complexed equations in order to build blocks on the Ethereum block chain. Whichever machine or miner solves the problem quickest, completes the block and receives a reward as payment: ETH coin.
Although Ethereum shares some features with Bitcoin, such as being able to make peer-to-peer transactions, they serve different purposes and audiences. Moreover, Bitcoin was the original decentralized payment system that didn’t require a middleman bank to conduct payments. Although Ethereum is used for payment sometimes, its primary purpose is to serve as the core block chain on which newer projects operate.
Ethereum uses a payment system for ETH. In addition, it implements smart contracts which allows entirely new projects to run on top of the Ethereum block chain. For example, in November 2017, the decentralized application “CryptoKitties” was launched. It is a digital collecting and trading app of virtual felines that works on Ethereum.
Reasons Why Ethereum May Be the Best cryptocurrency to invest in 2021
- Industry leader in smart contracts
- Widespread use and adoption
- $220 Billion market capitalization
- Home of block chain decentralized applications (dapps)
- Well established decentralized payment network
- Serves as the block chain base for hundreds of projects
- Independence from Banks
- Borderless Payments
- Low Fees
Other Cryptocurrencies to Consider
Here are some other cryptocurrencies that are worth looking at more deeply. Although Bitcoin is the most dominant and most secure cryptocurrency, there are many other cryptocurrencies that have strong security and strong use case value. A cryptocurrency investment portfolio may include other cryptocurrencies.
Named after Gerolamo Cardano, a 16th century Italian polymath, the Cardano project began in 2015. It is an open-source software project. Moreover, it innovates the design of cryptocurrency. Cardano has a long-term plan called the Road Map. Cardano’s most notorious feature is its implementation of peer-reviewed research. Research and peer review are a part of project development. It has a $30 Billion market capitalization.
A team of academics, researchers and developers managed Cardano. They focus on solving cryptocurrency problems. Moreover, Cardano doesn’t focus on one use case scenario for cryptocurrency; instead, it appears to be tacking many problems at once, such as currency, proof of stake, smart contracts, scalability, security and even scripting. In addition, Cardano uses the delegated proof-of-stake method to maintain the network functionality. This is different because it is more efficient for electricity consumption. Cardano is definitely one to watch if you are looking for a cryptocurrency to invest in.
Created in 2014 from a fork in the Bitcoin block chain, Monero is a privacy coin. Monero uses what it calls an “obfuscated public ledger” which makes transactions of Monero private. Moreover, Monero is a tested privacy payment method. The project has longevity and a working record of privacy.
Monero gets a bad reputation at times. For example, it has been used on the dark web as an illegal payment method. However, it should be noted that paper currency such as the US Dollar can also be used for illegal purposes. Privacy for legal transactions is an important aspect for money and Monero is the foremost privacy cryptocurrency on the web. Monero is cryptocurrency to invest in for those who love privacy.
Developed in 2017, Chainlink is a decentralized network that connects smart contracts with real world data. Furthermore, the Chainlink decentralized oracle network is operated by node operators. In addition, operators that maintain nodes are paid LINK cryptocurrency. The nodes connect the system like links in a chain. Chainlink runs on the Ethereum network and plays a critical role in execution of smart contracts. It is one of the new rising stars of the cryptocurrency revolution and an important cryptocurrency to invest in.
Another new rising star in the cryptocurrency space is Polkadot. The Web3 Foundation created Polkadot. Its primary function is to facilitate the operation of block chains together. The DOT coin functions in three ways: staking, bonding and networking. Finally, Polkadot contains special tools like specialization, scale and inoperability which act as catalysts between block chains.
Pros of Owning Cryptocurrency
Owning Cryptocurrencies May Save A Failing System
Owning cryptocurrencies requires that you have a future vision that is radically different than our current banking system. In addition, cryptocurrency is inherently risky and volatile for investors. However, many believe that cryptocurrency investment is a vote for monetary freedom and independence from governments.
Currently, many countries throughout the world are struggling with debt. As sovereign debt climbs higher in the United States, there doesn’t appear to be an effort to keep the financial system from boiling over. In addition, inflation for many people has become a problem and prices are going higher. Many investors are looking for an alternative investment from an overpriced stock market and real estate market. Cryptocurrency may be a safer place to invest.
Bitcoin doesn’t require using a bank; the bitcoin holder is the bank. Making borderless payments between friends became easier and more private. In addition, Bitcoin is deflationary, with only 21 million Bitcoins available for use. And, if you are starting to have doubts about government money printing and overspending, then Bitcoin is an obvious candidate for safe-haven status. Clearly Bitcoin is one of the best cryptocurrencies to buy right now.
Cons of Owning Cryptocurrency
Fraud, Theft and Volatility Are Still Issues with Cryptocurrencies
There are some cons to owning cryptocurrency. In addition, cryptocurrency and the block chain space are a very new industry. Bitcoin is only 11 years old and there have been growing pains in the space. First, cryptocurrency has been vulnerable to fraud in the past. For example, $800 Million worth of Bitcoin was stolen from “Mt. Gox” crypto exchange in 2014. Second, scams have been a problem in the industry, especially with new projects. Finally, price volatility has frightened away many new potential Bitcoin users.
Best Cryptocurrency to Invest in 2021
Currently, in 2021, Bitcoin is trading around $50,000 per Bitcoin. There are many analysts who believe it could go much higher. But even more importantly, Bitcoin and other cryptocurrency may break the banking chains that imprison us today. And it’s no longer a conspiracy theory to discuss cryptocurrency. Respected investors are taking it seriously like never before.
Future Predictions of Bitcoin and Ethereum Prices
Reputable Investors Foresee Exponential Growth in Bitcoin and Ethereum Markets
It seems clear that in 2021, Bitcoin and Ethereum have begun the next phase of expansion and adoption. As a result, the price of both cryptocurrencies will likely go much, much higher. In addition, these may be the best cryptocurrency to invest in 2021 in 2021. However, there are other good choices as well.
Anthony Pompliano and Max Keiser, two well-known investors in the Bitcoin space believe that Bitcoin price will exceed $100,000 in the next few years. Other investors like Mike Novogratz and Chamath Palihapitiya believe Bitcoin price is destined to go even higher to levels like $400,000 and $1,000,000, respectively.
As for Ethereum, investors are optimistic about its future price as well. Because Ethereum’s market capitalization is only $40 Billion, there is much room for growth. Continual adoption of Ethereum by institutional investors could easily lead to a $500 Billion market capitalization, equating to a $3,750 ETH price. Investors such as Nigel Green and Blockfyre co-founder Simon Dedic predicted much higher prices ($2,500 – $9,000) for Ethereum in the future.
Several of the investors mentioned are worth Billions cumulatively and have a clear track record of investing in markets. They have been advising investors of which is the best cryptocurrency to invest in 2021 for years. As a result, their predictions are very serious.
Bitcoin Exchanges and More Information
Hopefully this article has helped you make a better decision about the best cryptocurrency to invest in 2021. There are many exchanges that can be used to purchase cryptocurrency. Binance, Gemini, Kraken, Coinbase and so many more. Please do your research if you decide to invest. There are many scams in the crypto industry that are searching for an easy mark. If you want to learn more about Bitcoin and cryptocurrency, there are more articles by Piggy Bank Coins below. Thanks for reading and good luck!
It is important to note that Piggy Bank Coins does not provide financial advice. We don’t endorse or recommend any financial investments. Instead, we provide information for educational purposes to those seeking knowledge regarding personal finance. However, in the spirit of transparency, note that the author is an investor in cryptocurrencies, precious metals and some equities.
In addition, The Federal Trade Commission (FTC) requires that Piggy Bank Coins disclose to readers that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. Moreover, we try our best to keep things fair and balanced, in order to help you make the best choice for you.