For a lot of people, cryptocurrency still feels like the Wild West of banking. It’s relatively new, hard to understand and challenging to learn which types of digital coins are worth investing in. While most people have at least heard of bitcoin, other coins exist, too. Are they worth your money?
Dubbed “altcoins,” I asked ChatGPT to explain a bit about these wily little digital coins and which ones are worth investing in. Here’s what it said.
I confess, I wasn’t clear on the nature of an altcoin, so the AI clarified for me that it’s basically “any cryptocurrency that isn’t bitcoin.” Uncreatively, the name comes from “alternative” + “coin.” Some people exclude Ethereum from the category because it’s so big, but technically, Ethereum is an altcoin too.
While bitcoin was designed mainly as digital money and a store of value, ChatGPT told me “altcoins explore all sorts of other uses.”
For example:
The examples above already show how altcoins serve a wide range of purposes. ChatGPT explained that most of them were created “to improve on bitcoin’s limitations,” be that speed, energy use or programming issues, or “offer completely new functions in finance, gaming, NFTs and more.”
While some of them offer real utility, others are highly speculative, and you definitely don’t want to blindly invest in them.
ChatGPT warned that for the average American worker, “balancing safety and upside is key.” You can expect bigger, more established altcoins to offer more stability, whereas newer projects can yield explosive gains — or total losses.
In the realm of the more stable and established picks, ChatGPT offered the following three choices based on insights from Barron’s and Crypto Economy.
Ethereum (ETH): The AI suggested that Ethereum is among the most stable altcoins. “Think of Ethereum as the main ‘operating system’ for most crypto apps,” it said. A lot of digital contracts and new kinds of online finance run on Ethereum. Thus, “big investors are pouring money in, and some experts think it could climb toward $7,000 this year,” the AI said.
Solana (SOL): Solana is an altcoin that’s known for being “lightning-fast and cheap to use,” ChatGPT said, able to process thousands of transactions per second at very low cost, making it practical for things like payments, digital art (NFTs) and other online projects. “Large investors are quietly buying in, which suggests confidence in its future,” the AI said.
Ripple (XRP): XRP is often interchangeably referred to as Ripple, the company that makes it, and is designed for “quick, low-cost money transfers across borders-like sending dollars to Europe in seconds,” the AI said. Though it had some legal battles, they are now settled, giving people more optimism in its staying power.
A couple others that may be on a growth path include TRON (TRX) and Cardano (ADA).
You don’t have to take ChatGPT’s word for it, however, you can do your own due diligence by:
Find out what the altcoin you’re interested in really does, ChatGPT suggested. For instance, does it solve a real-world problem (faster payments, smart contracts, gaming) or is it just hype (like meme coins)?
“The more use cases and adoption, the more likely it is to hold value long-term,” the AI said.
Also look into the team and company behind it. Do they have a solid track record, an active developer community that is continually working to improve it and transparency? If not, be wary.
Before you invest, make sure that you can easily buy and sell it on major exchanges like Coinbase, Binance and Kraken. “If it’s only on obscure exchanges, that’s a risk,” the AI warned. The higher the liquidity, the less chance of getting “stuck” with a coin you can’t sell.
Most of all, don’t let FOMO (fear of missing out) drive you, ChatGPT warned. “Just because it’s trending on TikTok doesn’t mean it’s safe.”
Moreover, if the returns sound too good to be true, trust that instinct. And never invest money you need for essentials like rent or emergency funds into crypto.
