In recent years, cryptocurrencies have catapulted into the public consciousness partly due to their potential to offer faster, cheaper, and more transparent transactions than traditional payment methods. However, with thousands of cryptocurrencies in existence and new ones being created regularly, choosing the ones to invest in can feel like being a kid in a candy store - a vast array of compelling options, each promising a sweet ride to success.
Yet this myriad of choices poses a dilemma. How does one discern between a genuinely innovative cryptocurrency and a flash-in-the-pan digital asset that may be gone tomorrow? How can one navigate these financial waters where price volatility is the norm, scams are not unheard of, and failures are as common as success stories?
This is where understanding the nuances of the cryptocurrency landscape comes into play. While it may be tempting to get swept away by the allure of freshly minted altcoins, they often carry significant risks. They can be aggressively unstable, with prices that swing wildly at a moment's notice. Furthermore, a considerable portion of these fledgling projects may not even survive their first few years, and in the worst-case scenario, some turn out to be outright frauds.
Given these considerations, evaluating cryptocurrencies based on several key factors is essential rather than relying on hype or speculation. In this article, we at PlasBit will use many criteria to evaluate our top 5 cryptocurrencies, such as:
- Market capitalization and ranking: This indicates the size and value of the cryptocurrency in the market and its popularity and demand among investors and users.
- History and origin: This provides context and background information on the cryptocurrency, such as when and why it was created and by whom.
- Features and characteristics: This describes the main technical aspects and functions of the top 5 cryptocurrencies, such as how it works, what it does, and what makes it unique or different from others.
- Advantages and disadvantages: This analyzes the strengths and weaknesses of the cryptocurrency, as well as the opportunities and challenges it faces.
- Regulatory Acceptance: A positive stance from regulatory bodies and governments contributes to a cryptocurrency's legitimacy and widespread adoption.
- Community and Ecosystem: A vibrant community and ecosystem indicate the cryptocurrency's support and potential for growth and innovation.
- Prospects and potential: This evaluates the cryptocurrency's growth potential and future outlook, as well as its impact and influence on the industry and society.
What Are The Top 5 Cryptocurrencies?
1. Bitcoin
Top on our list is Bitcoin, a decentralized cryptocurrency that was created in 2009 by an anonymous person or group using the pseudonym Satoshi Nakamoto. It was designed as a peer-to-peer electronic cash system that does not rely on any central authority or intermediary. The first Bitcoin transaction was recorded on January 3, 2009, when Nakamoto sent ten bitcoins to computer scientist Hal Finney. The first commercial Bitcoin transaction occurred on May 22, 2010, when programmer Laszlo Hanyecz bought two pizzas for 10,000 bitcoins.
Bitcoin uses a proof-of-work consensus mechanism that requires miners to compete for the right to add new blocks to the blockchain and receive rewards. The difficulty of the mining process adjusts every 2016 block (approximately every two weeks) to maintain a constant block time of about 10 minutes. Bitcoin has a limited supply of 21 million coins expected to be mined by 2140. As of June 16, 2023, 19,401,425 bitcoins have been mined. This represents 92.388% of the total supply of 21 million bitcoins. The remaining 1,598,575 bitcoins will be mined over the next 120 years or so, with the reward for each block halving every 210,000 blocks.
Why Bitcoin?
Besides its several advantages, such as being decentralized, censorship-resistant, borderless, scarce, and programmable, Bitcoin remains a top 5 cryptocurrency partly due to its longevity, continued growth, and this year's performance, where it has gained more than 50 percent year-to-date.
Another reason why Bitcoin remains a top 5 cryptocurrency choice is due to its stability. Unlike other cryptocurrencies, its price volatility is not as aggressive, making it a top choice for many people looking for alternative means of payment in their businesses and online transactions.
Bitcoin also has a strong network effect, brand recognition, and a loyal and diverse community of supporters. It is widely accepted as a store of value, a medium of exchange, and a unit of account by various individuals, businesses, and institutions, including here at PlasBit, where users can transfer and store their Bitcoins.
There is also considerable optimism in the Bitcoin space, as most users see a potential increase in its adoption, which can make it mainstream as more people learn about its benefits. There is also optimism about the innovation of future products that will heavily rely on Bitcoin technology, thereby increasing its usage.
All these factors, plus their continued use and applications in areas such as remittances, payments, donations, savings, investments, speculation, and hedging, make Bitcoin among the best-suited cryptocurrencies for growth.
2. Ethereum
Ethereum ranks next to Bitcoin on our top 5 cryptocurrency list and is a revolutionary platform that ushered in the era of smart contracts and decentralized applications (DApps). Proposed in late 2013 by Vitalik Buterin, a cryptocurrency researcher and programmer, Ethereum was developed by a team of enthusiasts from around the world. The platform went live on July 30, 2015, following a successful initial coin offering (ICO) that raised over $18 million.
Ethereum operates on a proof-of-stake consensus mechanism through its Ethereum 2.0 upgrade, known as the "Merge," implemented in 2022. It migrated from the energy-intensive proof-of-work model to a more sustainable and scalable proof-of-stake system. The proof-of-stake system allows ETH holders to stake their coins as validators, securing the network and earning rewards.
Why Ethereum?
Ethereum distinguishes itself with its smart contract functionality, which automates the execution of contracts, increasing efficiency and reducing the risk of human error or non-compliance. This unique feature has enabled the creation of DApps, decentralized exchanges (DEXs), and the blossoming of the DeFi (Decentralized Finance) and NFT (Non-Fungible Token) sectors, all of which have contributed significantly to the cryptocurrency's success.
The Ethereum network is undergoing a series of upgrade stages after the Merge, named Surge, Verge, Purge, and Splurge. Notably, the Verge phase aims to reduce the amount of blockchain data validators need to store, making it more economical to run a node in the long run. On the other hand, the Purge phase aims to prune excess historical data, helping minimize network congestion. The prospects of Ethereum are promising, with improvements in scalability and transaction speeds on the horizon.
As of June 2023, Ethereum has no supply limit theoretically, unlike Bitcoin. However, introducing the ETH burn mechanism in 2021 means that more ETH will be burned as network activity increases, potentially making Ethereum deflationary.
Ethereum's vibrant community of developers and users and its broad adoption in various sectors indicate a healthy ecosystem and high growth potential. Despite the challenges in scalability and high gas fees, solutions such as Layer 2 networks and future upgrades like network sharding are in place to address these issues, which makes us at PlasBit believe Ethereum remains a top 5 cryptocurrency choice for anyone looking to get into the markets.
Ethereum is widely accepted across numerous platforms and has a strong network effect. The Ethereum blockchain's potential extends beyond cryptocurrency, with use cases in finance, real estate, supply chain, and more. The optimism around Ethereum's future is palpable, with the platform expected to run hundreds of thousands of transactions per second following the implementation of network sharding.
All these factors, including Ethereum's continued use and applications in smart contracts, DApps, DeFi, and NFTs, make it one of the most promising cryptocurrencies for growth. It is also one of the reasons Ethereum remains a top choice for most PlasBit users.
3. Solana
Solana is next on our top 5 cryptocurrency list, a decentralized cryptocurrency created in 2017 by a team of former Qualcomm engineers led by Anatoly Yakovenko. It was designed as a scalable and interoperable platform for building and connecting Ethereum-compatible blockchain networks. The first Solana transaction was recorded on March 23, 2020, when the Solana mainnet beta was launched. The first known commercial transaction using Solana occurred on June 9, 2020, when Kin, a social media cryptocurrency, migrated to Solana from Stellar.
Solana uses a proof-of-stake consensus mechanism that requires validators to stake SOL tokens to secure the network and receive rewards. The difficulty of the validation process adjusts dynamically to maintain a constant block time of about 0.4 seconds. Solana has an unlimited supply of SOL tokens that are issued at a decreasing rate over time. As of June 16, 2023, about 549 million SOL tokens were in circulation. This represents about 55% of the total supply of 1 billion SOL tokens. The remaining 451 million SOL tokens will be issued over the next 128 years or so, with the reward for each block halving every two years.
Why Solana?
Besides its advantages, such as being scalable, interoperable, flexible, and user-friendly, Solana remains a top 5 cryptocurrency partly due to its innovation, rapid growth, and this year's performance, where it has gained more than 48 percent year-to-date.
Another reason why Solana remains a top choice is due to its speed and low cost. Unlike other cryptocurrencies, it can handle millions of daily transactions with high throughput and low latency, thanks to its proof-of-history (PoH) protocol and other innovations. Solana transactions cost less than $0.01 on average, making it affordable and practical for various use cases.
Solana also has a strong network effect, ecosystem recognition, and a loyal and diverse community of supporters. It is widely accepted as a platform for building and connecting various applications and services, such as DeFi (decentralized finance), NFTs (non-fungible tokens), gaming, and social media, and can be bought easily.
There is also massive optimism in the Solana space, as most of its users see a potential increase in its adoption and mainstreaming, which is likely to see its continued rise. There is also a high likelihood that we see another bullish push for Solana.
4. Chainlink
Another cryptocurrency on our top 5 is Chainlink, a decentralized oracle network created in 2017 by Sergey Nazarov and Steve Ellis. It was designed to connect smart contracts on various blockchains with real-world data and services, such as market prices, weather forecasts, sports outcomes, and payment methods. The first Chainlink transaction was recorded on May 30, 2019, when the network went live on the Ethereum mainnet. The first use case of Chainlink was providing price feeds for decentralized finance (DeFi) applications, such as Aave, Synthetix, and Compound.
Chainlink uses a reputation-based incentive system that rewards Oracle nodes for providing accurate and timely data to smart contracts and penalizes them for being dishonest or unreliable. The network relies on a native token called LINK, used to pay for Oracle services and stake as collateral by node operators. The supply of LINK tokens is fixed at 1 billion, with no inflation or deflation mechanism. As of June 16, 2023, 452,009,554 LINK tokens are in circulation. This represents 45.201% of the total supply of 1 billion tokens.
Why Chainlink?
Besides its advantages, such as being secure, scalable, and flexible, Chainlink remains a top 5 cryptocurrency partly due to its leading role in the oracle space; continued adoption continues to convince us at PlasBit that Chainlink is poised to continue growing.
Another reason why Chainlink remains a top 5 cryptocurrency choice is because of its wide range of use cases and integrations across various sectors and industries. Chainlink is not only used by DeFi applications but also by gaming platforms, insurance providers, enterprise solutions, and even governments. Chainlink has partnered with hundreds of projects and organizations that use its Oracle network to power their smart contracts.
Chainlink also has a strong innovation potential and vision, aiming to enable a fully decentralized and connected Web3 world. It is constantly developing new features and capabilities for its network, such as verifiable randomness, proof-of-reserve, cross-chain communication, and meta-transactions. It is also exploring new domains and opportunities for its technology, such as hybrid smart contracts, zero-knowledge proofs, and off-chain computation.
There is also considerable optimism in the Chainlink space, as most users see a potential increase in demand and value as more smart contracts require reliable and diverse data sources and services. There is optimism about the future development and improvement of Chainlink and its underlying technology, such as interoperability, privacy, and security.
5. Cardano
One more cryptocurrency on our list is Cardano, a proof-of-stake blockchain platform created in 2017 by Charles Hoskinson, a co-founder of Ethereum. It was designed to enable social and economic innovation through smart contracts, decentralized applications, and interoperability with other blockchains. The first Cardano transaction was recorded on September 29, 2017, when the network launched its first phase, called Byron. The second phase, called Shelley, introduced staking and delegation in 2020. The third phase, called Goguen, launched smart contract functionality in 2021.
Cardano uses a novel consensus protocol called Ouroboros based on peer-reviewed research and mathematical proofs. The protocol allows the network to achieve high security and scalability without compromising energy efficiency. The network relies on a native token, ADA, to pay for transactions and smart contract execution. The supply of ADA tokens is capped at 45 billion, with an initial distribution of 31 billion. As of June 16, 2023, 32,025,787,705 ADA tokens are in circulation. This represents 71.168% of the total supply of 45 billion tokens.
Why Cardano?
Besides its advantages, such as being fast, flexible, and sustainable, Cardano remains a top 5 cryptocurrency partly due to its scientific approach, wide adoption, and this year's achievements, where it has gained more than 300 percent year-to-date.
Another reason why Cardano remains a top choice is due to its ambitious vision and roadmap, which aims to address some of the most pressing challenges and opportunities in the blockchain space, such as scalability, interoperability, governance, and social impact. Cardano has four more phases planned for its development: Basho, which will improve performance and scalability; Voltaire, which will introduce on-chain governance and treasury system; Hydra, which will enable off-chain scaling and fast transactions; and Omega, which will ensure long-term sustainability and innovation.
Cardano also has a strong community and ecosystem that supports its growth and development. It has partnered with various governments, institutions, and organizations that use its platform for various purposes, such as digital identity, education, health care, and agriculture. It also has a vibrant network of developers and entrepreneurs that build and launch applications and projects on its platform.
Conclusion
In conclusion, navigating the vast landscape of cryptocurrencies requires careful evaluation and consideration. While the allure of new and shiny altcoins may be tempting, it is crucial to base investment decisions on solid criteria rather than mere speculation. The top 5 cryptocurrencies worth investing in, as evaluated by PlasBit, include Bitcoin, Ethereum, Solana, Chainlink, and Cardano.
The pioneering cryptocurrency maintains its position due to its decentralization, stability, and widespread adoption. Its longevity, growth, and performance make it a solid investor choice. Ethereum stands out with its smart contract functionality, enabling the creation of decentralized applications and contributing to the rise of DeFi and NFTs. Despite scalability challenges, Ethereum's ongoing upgrades and broad adoption make it a promising investment option.
Solana offers scalability, interoperability, and speed, making it a preferred choice for developers and users seeking cost-effective and efficient solutions. With its Oracle network, Chainlink is crucial in connecting smart contracts with real-world data and services, fostering its integration across various sectors. Cardano's scientific approach, ambitious roadmap, and wide adoption make it an attractive investment opportunity, addressing critical challenges in the blockchain industry.
Ultimately, whichever choice you make, we at PlasBit hope that we have been of help in your journey of investing in the cryptocurrency markets.
