If you are just getting started in the world of cryptocurrency investing, you may be wondering where to start. With thousands of cryptocurrencies available, the selection can seem overwhelming. For example, there are more than 7.700 cryptocurrencies listed on CoinMarketCap. This includes everything from the world's most popular cryptocurrency, Bitcoin, to popular meme coins like Shiba Inu.
So there are many possibilities. And there's a lot of risk involved too. Some cryptocurrencies don't offer much in the way of real-world utility. This means that it is difficult to say whether they will grow (or even exist) in the future as well. If you are unfamiliar with cryptocurrency investments, we recommend that you stay away from these names. Instead, it's best to start with a competitor who is already demonstrating how useful it can be ...
The second largest cryptocurrency
I'm talking about the second largest cryptocurrency in the world after Bitcoin. Ethereum (ETH). Ethereum's currency is called Ether. But Ethereum isn't just designed as an alternative currency system.
The main feature of Ethereum is its ability to run decentralized applications (dApps). These are performed on a network rather than on a server. The advantage? No person or organization controls or can interfere with operations. This minimizes the risk of fraud. And downtime isn't an issue because you don't need an individual to handle transaction processing.
So what are the transactions? Developers can create and individuals can use dApps for a variety of purposes, including finance, gaming, and even for investment in works of art.
Ethereum could leave an important mark on the financial world in particular. The platform promises to make your money "programmable". This is because you can do more than just buy this cryptocurrency and keep it. On Ethereum you can borrow money with or without collateral. Other uses include scheduling payments or even purchasing insurance.
For example, farmers can purchase crop insurance on the shelf, and natural disasters such as floods involve automatic payments. Right now, around 3.000 dApps are running on Ethereum, according to State of the DApps, a website.
An even brighter future
And it looks like the future could be even brighter for Ethereum. This is because cryptography is doing an upgrade that should eliminate a big problem right now: the speed of transactions. Today, Ethereum can only process around 30 transactions per second. But an update slated for release next year aims to speed it up to 100.000.
Hopefully with the update, we could see some gains in Ethereum. And since that update is supposed to make the platform more efficient, we may see increases later on.
This does not mean that Ethereum has zero risk. As with any cryptocurrency, you should invest only what you can afford to lose. Because cryptocurrencies are so new, it's impossible to predict what will happen, even if a particular cryptocurrency has a solid development plan. But if you accept it, now is a great time to enter this growing industry. And Ethereum, due to its strong presence today and potential for tomorrow, is a good starting point.
