Investopedia, which is a site mostly all of us here stumbled upon at some time and is mostly known throughout the investment circles, has published its Top 10 Most Important Cryptocurrencies.
I agree with some choices, while I fundamentally disagree with others.
While analyzing the list for myself, I thought it would be a good thing to go over it in an article so my readers could know of these choices and what I think of them, as well as why some of them may be- from my point of view - wrong assumptions or just wrong.
Well, I wasn't surprised to see ETH at the number one spot as the potential is immense.
There is a catch, however, and that has to do with something I really think is something I should state right now:
Deciding on the Top 10 Cryptos may be easy, but grading them in order of importance in the Top 10 is almost impossible.
With that said, here's a short part of what Investopedia says about it:
The first Bitcoin alternative on our list, Ethereum, is a decentralized software platform that enables Smart Contracts and Decentralized Applications (DApps) to be built and run without any downtime, fraud, control, or interference from a third party. The goal behind Ethereum is to create a decentralized suite of financial products that anyone in the world can have free access to, regardless of nationality, ethnicity, or faith. This aspect makes the implications for those in some countries more compelling, as those without state infrastructure and state identifications can get access to bank accounts, loans, insurance, or a variety of other financial products.
Then, a bit further ahead, the writers add on the current year and progression from there on:
In 2021 Ethereum plans to change its consensus algorithm from proof-of-work to proof-of-stake. This move will allow Ethereum's network to run itself with far less energy as well as improved transaction speed. Proof-of-stake allows network participants to “stake” their ether to the network. This process helps to secure the network and process the transactions that occur. Those who do this are rewarded ether similar to an interest account. This is an alternative to Bitcoin’s proof-of-work mechanism where miners are rewarded more Bitcoin for processing transactions.
Again, this choice doesn't surprise me, and I guess it is a legitimate choice as, unlike BTC, the token has a lot of possible implementations - much like BCH but with a bigger community and therefore more projects and developments.
The fees are a bit too high for my taste and the gas thing is a turn-off for many, but overall the potential is indeed immense and that's why I consider this to be a legitimate place for ETH.
Well, to place Litecoin as the 2nd most important Cryptos is a dire mistake from my point of view.
I guess that most of you agree.
Well, Litecoin had a major PR explosion and huge marketing done on it and so it got very successful.
Investopedia says the following to justify their choice:
Litecoin, launched in 2011, was among the first cryptocurrencies to follow in the footsteps of Bitcoin and has often been referred to as “silver to Bitcoin’s gold.” It was created by Charlie Lee, an MIT graduate and former Google engineer. Litecoin is based on an open-source global payment network that is not controlled by any central authority and uses "scrypt" as a proof of work, which can be decoded with the help of CPUs of consumer-grade. Although Litecoin is like Bitcoin in many ways, it has a faster block generation rate and hence offers a faster transaction confirmation time. Other than developers, there are a growing number of merchants who accept Litecoin. As of January 2021, Litecoin had a market cap of $10.1 billion and a per token value of $153.88, making it the sixth-largest cryptocurrency in the world.
Well, size doesn't mean much in a market that has a combined market cap that is yet very small.
The guys at Investopedia point out that LTC is the coin for merchants, transactions, faster, lower fees, etc...
...they fail to notice that we at BCH have them beat at nearly anything without the huge marketing work LTC enjoyed.
From my point of view, this spot was reserved for Bitcoin Cash (BCH) as the true peer-to-peer electronic money feel the analysts at Investopedia were looking for.
Let's start by sharing a few words about the token:
Cardano is an “Ouroboros proof-of-stake” cryptocurrency that was created with a research-based approach by engineers, mathematicians, and cryptography experts. The project was co-founded by Charles Hoskinson, one of the five initial founding members of Ethereum. After having some disagreements with the direction Ethereum was taking, he left and later helped to create Cardano.
Well, I'm actually very bullish on Cardano (ADA) and I am holding it myself, still buying it whenever I have a chance.
Cardano is one of the only, if not the only, scientifically designed token - through peer-to-peer review and the whole academic process.
Charles is also one of the most legit guys ever, and you can look him up academically, through social media, through the pink press... whatever - he is always legit.
You can also see he has a great passion for ADA and is heavily invested in its success.
A powerhouse of an altcoin that is still severely undervalued.
Here's the drill...
I think one of the most valuable things in the world is being able to say to others - you know what? I really don't understand such a topic or I'm totally unaware of "X Variable".
This is the deal for me with Polkadot (DOT).
I never researched it, never held it, it's the kind of crypto that I have 0 investment in, and for that reason, I'll just quote Investopedia's entry and let you decide.
Polkadot is a unique proof-of-stake cryptocurrency that is aimed at delivering interoperability between other blockchains. Its protocol is designed to connect permissioned and permissionless blockchains as well as oracles to allow systems to work together under one roof.
Polkadot’s core component is its relay chain that allows the interoperability of varying networks. It also allows for “parachains,” or parallel blockchains with their own native tokens for specific use cases.
They go on for some time on its history, but end up just saying (once you squeeze the filler out) that it has a market cap of $11 billion.
Bitcoin Cash, behind Polkadot and Litecoin... I have a problem with this, especially for what they say about it:
BCH began its life in August of 2017 as a result of one of these splits. The debate that led to the creation of BCH had to do with the issue of scalability; the Bitcoin network has a limit on the size of blocks: one megabyte (MB). BCH increases the block size from one MB to eight MB, with the idea being that larger blocks can hold more transactions within them, and therefore the transaction speed would be increased. It also makes other changes, including the removal of the Segregated Witness protocol which impacts block space.
I mean, they go on and on about LTC and its faster transactions and whatnot, and when it comes time to discuss Bitcoin Cash they just mention block size and Segwit?
What is the average consumer or investor going to make of it without further explanation?
They'll probably go: What the heck is a Segwit, you eat that?
They should have mentioned the low transaction fees, the lightning-fast transaction time, the ease of use, smart contract adoption, etc etc etc...
Of course, they would then be forced to switch BCH and LTC up in this list, but I'm guessing the writer knew as much about BCH as I did about Polkadot.
Stellar XLM is a polarizing choice due to the fact it resembles Ripple in many ways.
As you know, Ripple was disliked by many - including myself.
Stellar enjoys the same polarization, albeit this time it seems much smaller in comparison.
Stellar is an open blockchain network designed to provide enterprise solutions by connecting financial institutions for the purpose of large transactions. Huge transactions between banks and investment firms that typically would take several days, a number of intermediaries, and cost a good deal of money, can now be done nearly instantaneously with no intermediaries and cost little to nothing for those making the transaction.
Stellar was founded by Jed McCaleb, a founding member of Ripple Labs and developer of the Ripple protocol. He eventually left his role with Ripple and went on to co-found the Stellar Development Foundation.
One of the questions we need to pose to ourselves is: How do I think about the Stellar Lumens and the system behind it?
Do I agree with centralization in Cryptocurrencies?
To me, if the token is centralized I no longer like it. I don't want crypto to become the very thing we want to change.
It's a serious mistake to place Lumens in the top 10 as it is a dangerous path to follow, in my opinion.
Again, I never held it or delved too deep into the community because of it being centralized turned me off, so I respect people who like it.
This marks our return to decentralized crypto, the way it should be.
Chainlink fills some technical gaps between the top crypto in this list, and it does serve a purpose contrary to many other vaporware coins.
Yes, it has been used like BTC as far as speculation is concerned, with many opting to ride the waves, but by now which coin hasn't?
Chainlink is a decentralized oracle network that bridges the gap between smart contracts, like the ones on Ethereum, and data outside of it. Blockchains themselves do not have the ability to connect to outside applications in a trusted manner. Chainlink’s decentralized oracles allow smart contracts to communicate with outside data so that the contracts can be executed based on data that Ethereum itself cannot connect to.
A good explanation of what it does in layman terms, and a good enough justification as to why this token has potential. If its use cases remain and the fairly small community can fight off potential competitors that is.
Chainlink’s blog details a number of use cases for its system. One of the many use cases that are explained would be to monitor water supplies for pollution or illegal syphoning going on in certain cities. Sensors could be set up to monitor corporate consumption, water tables, and the levels of local bodies of water. A Chainlink oracle could track this data and feed it directly into a smart contract. The smart contract could be set up to execute fines, release flood warnings to cities, or invoice companies using too much of a city's water with the incoming data from the oracle.
I was just thinking of this as soon as I saw Chainlink being placed here: They know marketing.
Despite their small size in terms of development teams for the ecosystem, GitHub communities, and whatnot, they do bring some really good points to the table, and one of them is putting their chips on environmentalists.
I don't like it.
I really don't like it.
This entry makes it seem that this list was hired ad space. Putting an exchange's token in the Top 10 Most Important Crypto list makes no sense at all.
Binance Coin is a utility cryptocurrency that operates as a payment method for the fees associated with trading on the Binance Exchange. Those who use the token as a means of payment for the exchange can trade at a discount. Binance Coin’s blockchain is also the platform that Binance’s decentralized exchange operates on. The Binance exchange was founded by Changpeng Zhao and the exchange is one of the most widely used exchanges in the world based on trading volumes.
Look, I get it that the token can pave the way to other similar tokens, but this isn't enough to put an exchange token on a pedestal... it's an exchange token to be used on an exchange - it isn't revolutionary!
With so many good cryptos out there, grabbing an exchange token makes no sense.
Look, this is to be expected.
Tether is THE stable coin. Huge amounts of people went into crypto using Tether as their entry point, as their onboarding ramp.
People who want to buy altcoins use Tether a lot.
Now, I know, there is a lot of discussion on Tether manipulating price, not being backed, being a bubble, and so on... I'm steering clear of that and will just say Tether is the most prominent stable coin and a good tool to have.
Tether was one of the first and most popular of a group of so-called stablecoins, cryptocurrencies that aim to peg their market value to a currency or other external reference point in order to reduce volatility. Because most digital currencies, even major ones like Bitcoin, have experienced frequent periods of dramatic volatility, Tether and other stablecoins attempt to smooth out price fluctuations in order to attract users who may otherwise be cautious. Tether’s price is tied directly to the price of the US dollar. The system allows users to more easily make transfers from other cryptocurrencies back to US dollars in a more timely manner than actually converting to normal currency.
As far as I'm concerned, this is a good choice and a good token to show some appreciation at, even though it has a seriously bad rep.
Ok, hear me out, I know many of you don't know much about Monero but there was a time in which it was the most profitable token to mine, and so I mined it.
The thing is so secure, private, and untraceable that is the far-west of crypto as far as privacy is concerned.
This brought it some problems, but let's see what Investopedia says of it first:
Monero is a secure, private, and untraceable currency. This open-source cryptocurrency was launched in April 2014 and soon garnered great interest among the cryptography community and enthusiasts. The development of this cryptocurrency is completely donation based and community driven. Monero has been launched with a strong focus on decentralization and scalability, and it enables complete privacy by using a special technique called “ring signatures.”
Here is the part about the security I'm talking about... now let's see if they touch the problems:
With this technique, there appears a group of cryptographic signatures including at least one real participant, but since they all appear valid, the real one cannot be isolated. Because of exceptional security mechanisms like this, Monero has developed something of an unsavory reputation—it has been linked to criminal operations around the world. While this is a prime candidate for making criminal transactions anonymously, the privacy inherent in Monero is also helpful to dissidents of oppressive regimes around the world.
Yup, here is the double-edged sword I also found when I was using Monero.
It can be a great token for countries with a sensible political setting or citizens who are being censored, expropriated, and so on... but it has the downside of being seen as the "rogue" of the Crypto world.
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