Stablecoins could gain widespread adoption as a digital currency, and Tether is the leading U.S. dollar stablecoin.
Entering the world of crypto investing can be a daunting experience. A massive number of cryptocurrencies exist — over 15 million, according to CoinMarketCap data. Because of how easy it is to launch a new cryptocurrency, the number is only growing.
But most of them have little to offer for investors. Crypto is a top-heavy market, and it’s full of scams and projects with no legitimate use or value.
So, which cryptocurrencies are worth your time? Start with these three to better understand the use cases for crypto and the top investment opportunities.
Launched in 2009, Bitcoin (CRYPTO: BTC) is the first cryptocurrency and the most successful. Remember how I said that the crypto market is top heavy? Well, with a market cap of $2.4 trillion (as of Aug. 14), Bitcoin makes up 56% of the entire market.
Bitcoin’s purpose was to be a decentralized currency, meaning one that wasn’t beholden to banks or any governing body. To accomplish that, it uses a blockchain — a digital transaction ledger that’s maintained and updated by a network of computers. Anyone who wants to participate in the Bitcoin mining process can become part of this computer network and help verify transactions.
While Bitcoin was originally intended as a currency, most people don’t actually use it that way. It’s too volatile, and transactions are slow and expensive compared to newer cryptocurrencies.
Bitcoin has instead become a digital store of value. There’s a limited number of Bitcoin available, as it has a maximum supply of 21 million. Bitcoin proponents believe that the built-in scarcity will lead to continued growth.
Early cryptocurrencies used blockchains solely to record transactions. Ethereum (CRYPTO: ETH) changed that when it launched in 2015. Ethereum was unique because it could run smart contracts, which are programs built into a blockchain.
The introduction of smart contracts significantly expanded what could be done with blockchain technology. Smart contract blockchains aren’t just transaction ledgers; they’re platforms where developers can build decentralized apps (dApps) and launch projects.
One of the notable use cases for smart contract blockchains is decentralized finance (DeFi). DeFi refers to financial systems built on blockchain technology, such as crypto borrowing and lending protocols. For example, Aave is a peer-to-peer crypto loan service that was originally built on the Ethereum blockchain (it’s also now available on other blockchains). The Aave protocol is able to facilitate crypto loans entirely with smart contracts.
