The cryptocurrency landscape is hugely diverse. With few barriers to overcome, almost anyone who wants to and understands blockchain technology can create their cryptocurrency. There are more than 1,600 cryptocurrencies offered on the leading, medium and specialized exchange platforms.
It is fair to say that the actual significance number can be reduced to a two-digit list of these cryptocurrencies and digital tokens. This smaller group can further be narrowed down to cryptocurrencies that are traded enough to have significant liquidity or regularly used to pay for uses of blockchain platforms as utility tokens. In this category, we could very likely include between 20 to 30 digital currencies.
Since the beginning of the cryptocurrency phenomenon, the two most popular cryptos have been Bitcoin and Ethereum (Ether). In recent years, Ripple XRP has strengthened its position within the top 3. Ripple even briefly surpassed Ethereum’s market capitalization in September 2018 to become the second most popular cryptocurrency.
Beyond Bitcoin, Ethereum, and Ripple XRP, other cryptocurrencies enjoy popularity. However, their value and public interest tend to rise and fall. The exclusive Crypto 10 Index, which is made up of the most popular cryptocurrencies of the moment, can also be traded.
What are the most popular cryptocurrencies for traders?
One way to determine the most traded cryptocurrencies is to look at which ones are offered as CFDs on major trading platforms such as Plus500. Below you can see the cryptocurrencies that are most interesting to Plus500 users.
Screens of two iPhones with buying and selling cryptocurrencies in the WebTrader.
A quick internet search suggests that the most popular cryptocurrencies on the market today are:
Bitcoin Ethereum Ripple XRP Litecoin NEO IOTA
They are all different, so let’s take a quick look at their main features.
Bitcoin is considered the original crypto. Its launch in 2009 is considered to be what started the entire cryptocurrency movement. Bitcoin – and the blockchain technology on which it operates – was developed by a person or workgroup under Satoshi Nakamoto’s pseudonym. Bitcoin was presented as an alternative to the traditional monetary system, known in the crypto world as Fiat currencies. Satoshi Nakamoto’s true identity has never been revealed.
In the Bitcoin white paper, Nakamoto asserted that a fiat monetary system controlled by central banks and a small number of financial institutions led to a centralization of wealth and power, thus bringing economic and social mobility to bear. It made it difficult. The savings of ordinary people were hit by inflation, caused mainly by monetary expansion and money printing by central banks.
Bitcoin solves that problem by setting the maximum number of units created, thus avoiding inflation caused by money printing. Peer-to-peer blockchain technology, or peer network in Spanish, means that no financial institution is necessary to facilitate transactions and verify ownership.
Bitcoin is still the most popular cryptocurrency, and its price movement has a substantial impact on the rest of the crypto market.
Ethereum is historically the second most popular cryptocurrency. However, it is very different from Bitcoin. Ethereum is the name of the blockchain platform, and Ether is the name of the cryptocurrency. Ethereum is a blockchain platform for ‘smart contracts.’
The platform can also be considered a standard with specific rules in which different applications, or Dapps – decentralized applications – can be created. Ethereum Dapp’s range from games to the Initial Coin Offering, or ICO by its initials in English, which are the equivalent of crowdfunding or Public Offering of Sale in the world of cryptocurrencies.
Although other innovative contract platforms have been launched since Ethereum, each claiming to be a more sophisticated blockchain technology, the original platform maintains its dominant position as the most widely used.
While Bitcoin is intended as an alternative to fiat currencies, the purpose of Ether (in addition to being traded as an asset) is to be used as a means of payment for the use of the Ethereum platform. This cryptocurrency is known as the ‘utility cryptocurrency.
Ripple XRP is another ut civility. Its blockchain platform is configured to facilitate international transfers of Fiat currencies and increase their efficiency. Tightly linked and backed by various banks since its launch, Ripple XRP is regarded as the cryptocurrency of the establishment.
The number of transfers made through the Ripple platform has grown gradually over the years, and there is a real possibility that it will become part of the traditional financial system.
Bitcoin, the best-known cryptocurrency and possibly the current gold standard for cryptocurrency investments, appreciated more than 1,300% in 2017. However, more than a dozen other cryptocurrencies outperformed Bitcoin, with gains ranging from 3,300% to 36,000% (in the case of Ripple) during the same period.
Related Content: The Best Cryptocurrencies to Invest in 2021
Since then, crypto enthusiasts have been trying to figure out the next bitcoin or the best cryptocurrency they can buy. Altcoins are generally riskier investments than Bitcoin, but they often provide higher returns in a bull market. Please look at our list of the best cryptocurrencies to buy in 2021 and start investing in the future of finance (Defi) today.
What are the best cryptocurrencies to buy in 2021?
Today’s best cryptocurrencies are not just currencies: they are native assets of some of the most promising startups and projects in today’s financial world. For Mark Cuban and Andreesen Horowitz, investments in decentralized finance (Defi) have been the most popular crypto investments of the year. Here are some of the most promising Defi cryptocurrencies to buy in 2021.
Polygon is an Ethereum sidechain that is scaling at a rapid rate. Ethereum’s high gas fees have revealed the networks’ struggle to move to Eth2. Their co-founder Vitalik Buterin has expressed his support for scaling solutions to layer 2 of the same, which loads with the processing of smart contracts in a separate blockchain network, and sends the results to the layer one chain to take advantage of Ethereum’s scale, decentralization, and security.
Layer 2 sidechains are sure to bolster the Ethereum ecosystem in the future, and Polygon is one of the first to do so. Assets must be bridged to any sidechain, so some switching costs will keep people staying with Polygon in the long run.
Stellar Lumens differs from most of its cryptocurrency competitors in some ways. Its objective is to be the reference cryptocurrency for payments, using a technology that allows fast and cheap transactions.
The project aims to enable retail and institutional investors to submit a digital representation of all forms of money. With the Stellar Lumens blockchain, users can send XLM, but the network also allows users to send Bitcoin and fiat currencies anywhere in the world.