What Are Cryptocurrencies?
A cryptocurrency is a digital asset that can circulate without the centralized authority of a bank or government. To date, there are more than 20,000 cryptocurrency projects out there that represent the entire $1.07 trillion crypto market.
Purchasing cryptocurrencies is just the first stage of the crypto investment, most traders then need to store they’re digital assets in a secure cryptocurrency wallet. We recommend reading our Exodus wallet review for more details on the best crypto wallets in 2022.
While you can use cryptocurrency to make purchases, most people treat it as a long-term investment. However, volatility makes investing in cryptocurrency risky, as demonstrated by the recent freefall among cryptocurrencies, including stablecoins pegged to the U.S. dollar. It’s important to know what you’re getting into before you buy in.
1. Binance Coin (BNB)
- Market cap: $45 billion
Binance Coin (BNB) is a form of cryptocurrency that you can use to trade and pay fees on Binance, one of the largest crypto exchanges in the world. Since its launch in 2017, Binance Coin has expanded past merely facilitating trades on Binance’s exchange platform. Now, it can be used for trading, payment processing or even booking travel arrangements. It can also be traded or exchanged for other forms of cryptocurrency, such as Ethereum or Bitcoin.
BNB’s price in 2017 was just $0.10. By early August 2022, its price had risen to around $284, a gain of approximately 283,900%.
2. Ethereum (ETH)
- Market cap: $201 billion
Both a cryptocurrency and a blockchain platform, Ethereum is a favorite of program developers because of its potential applications, like so-called smart contracts that automatically execute when conditions are met and non-fungible tokens (NFTs).
Ethereum has also experienced tremendous growth. From April 2016 to the beginning of August 2022, its price went from about $11 to around $1,640, increasing around 14,800%.
Ethereum is a network that allows developers to create their own cryptocurrency and deploy smart contracts utilizing the network. While ethereum is far behind bitcoin in value, it’s also far ahead of the other competitors.
Even though it came out years after some other cryptocurrencies, it has far exceeded its place in the market because of its unique technology. It’s currently the most popular blockchain and the second-largest cryptocurrency behind bitcoin.
The Cardano network has a smaller footprint, which is appealing to investors for several reasons. It takes less energy to complete a transaction on Cardano than on a larger network like Bitcoin. This means transactions are faster and cheaper.
Last year, Cardano launched a “hard fork,” an upgrade that increased functionality — in this case, enabling smart contract deployment. Another hard fork, this one called Vasil, has had its June 29 release date postponed, but once it launches, it should improve the Cardano blockchain’s scalability, The Daily Hodl reported.
Cardano recently launched a test version of a platform called AdaSwap where developers can build decentralized finance apps. AdaSwap could elevate Cardano’s status as a Web3 network and drive up the price of its coin.
4. Dogecoin (DOGE)
- Market cap: $9 billion
Dogecoin was famously started as a joke in 2013 but rapidly evolved into a prominent cryptocurrency thanks to a dedicated community and creative memes. Unlike many other cryptos, there is no limit on the number of Dogecoins that can be created, which leaves the currency susceptible to devaluation as supply increases.
Dogecoin’s price in 2017 was $0.0002. By Aug. 1, 2022, its price was at $0.067, up 33,400%.
*Market caps and pricing sourced from coinmarketcap.com, current as of Aug. 1, 2022.
5. Binance USD (BUSD)
- Market cap: $17 billion
Binance USD (BUSD) is a stablecoin that Paxos and Binance founded to create a cryptocurrency backed by the U.S. dollar. To maintain this value, Paxos holds an amount of U.S. dollars equal to the total supply of BUSD. As with other stablecoins, BUSD gives traders and crypto users the ability to engage in transactions with other crypto assets while minimizing the risk of volatility