Out of literally thousands of options in altcoins, how does anyone choose which is worth investing in?
Altcoins, stablecoins, dApps, smart contracts, borderless payment systems, proof of work, proof of stake, tokens, ICOs, blockchain, nodes, mining, forks…. navigating crypto jargon alone can bring one to the brink of madness. How anyone is supposed to sort through all of the terms, the ins and outs, and the subtle nuances between technologies in order to discover which cryptocurrencies are worth investing in is a headache in itself.
Navigating markets, on the other hand, can be quite a bit simpler. Finding a good exchange that’s purpose-built to help new traders adjust to the sphere is perhaps the most simple “step one”. Platforms like Bitvavo are specifically designed for this purpose and simple to use. The trading terms associated with crypto are often similar to those used in traditional markets.
There’s a ton of super accessible information out there that can help you start, secure, and use a cryptocurrency to its fullest abilities, what seems to be missing from most of these fundamental guides is how exactly do you pick which cryptocurrency to start with anyway?
Perhaps the best place to start really getting into the nitty-gritty of investing in and trading crypto is to start with one of the widely adapted “big name” cryptos. Cryptos like Bitcoin or Ethereum are excellent networks to get your feet wet in. Bitcoin is an ideal investment because it’s so widely known, and has been running the longest game by far. Giving you access to better data and information. Where it becomes difficult is finding the right buy-in window, as even at its biggest dump, one bitcoin was worth several thousand dollars. But because this is a great indicator of just how strong the market is for the famous coin.
In contrast, Ethereum is far less expensive, but comes with a much deeper well of available tech exploration. The network not only has its own token (ether) that can be traded speculatively, but the network also offers some really unique technological aspects. From it’s very own network pricing structure (Gas), to access to dApps and smart contracts- if you’re looking to get into investing into the techy side of things, Ethereum is the granddaddy you’re looking for.
When choosing either one of these cryptocurrencies for investment purposes, it’s important not to invest your entire nest egg all at once. Buying a few tokens of each can help get you comfortable with not only how crypto markets and exchanges work, but also incentivize you to learn as much as you can about the underlying workings of the networks themselves.
For every altcoin out there, there’s some manner of associated tech. Oftentimes, people assume that cryptocurrencies are just that: currencies. And sometimes they are- but in a wider market, each coin and token is just a share of something much bigger.
Some cryptocurrencies represent borderless payment systems, and ways to conveniently move money around the world with few fees and even smaller wait times. Coins like Ripple hope to address these same issues as they occur within fiat banking institutions. While others, like bitcoin itself- just offer a better format for making global purchases.
Still other tokens exist to create great strides in further supporting the “internet of things”, a specific type of technology that is wildly necessary for our current predicament. A system that serves to link devices, computers, and mechanical machines with one another, transferring data seamlessly between them. Think of how you can use Alexa to order groceries off of amazon. You interact with a device, that device interacts with a company on your behalf, and then the device and the company carry out the order you have given it.
These are just a few of the literally thousands of types of beneficial technologies that underlie cryptocurrencies. Helping to give them their value. The more useful a token’s technology, the more in demand that token will be. The more in demand… well, you get it. Understanding the technology and the current or projected demand for it can offer savvy investors a window into penny stocks and ICOs that could prove very profitable in the future.
General media isn’t really the best place to glean your crypto investment info. If you trade with a platform like Bitvavo, check out the info that they send your way. Interact with online communities and crypto-focused blogs and groups. Reddit, a type of social media outlet, is an excellent place to get access to some really valuable crypto information.
Do your homework. Really, that’s the only way you’ll be able to figure out which of the thousands of altcoins available will be right for you to invest in. Decide if you like the tech. Find a platform where you can trade it, then just enjoy immersing yourself in all the data and information you can find on your new-found financial hobby.
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Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
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