How to invest in cryptocurrencies and which are the most profitable in 2022
Cryptocurrencies are still on everyone's lips in 2022. In fact, we started this year with big drops in practically all the main cryptocurrencies. But what does that mean? What is a bad time to invest in crypto? Many people think that the falls are the best time to continue buying, that depends on the strategy of each one.
If you have come this far, you are most likely looking for new investment alternatives and one of the most interesting is, precisely, investing in cryptocurrencies: assets that have experienced a great revaluation since their creation. In this article we explain what a cryptocurrency is, how it works, how to invest, which cryptocurrencies to invest in and which are the best in 2022.
At Finect we have also created a section where you can see information from different platforms where you can buy Bitcoin or other cryptocurrencies, compare and then decide which one is best suited to you.
¿What are cryptocurrencies?
The most widespread definition of cryptocurrency is that it is a digital currency, not a physical one, that uses cryptography to secure and manage transactions, as well as to create new currencies within the blockchain network.
This explanation of what a cryptocurrency is includes the two most important features of these digital currencies. The first is that there are no bills or coins like there are euros, dollars or pounds. Cryptocurrencies are digital and, although they can be stored on physical devices (the so-called wallets or physical purses such as hard drives or USB sticks) they do not have a physical representation as such.
The second is that cryptography is used to create new units. P2P technology is the one that, for practical purposes, makes it not depend on any government or country: there is no body or central government in charge of creating new currencies and putting more money in the market. As an example, Bitcoin uses blockchain technology to regulate the creation of new units. Also, in this case, the number of available coins is limited, something that is not always repeated with other cryptocurrencies.
Ethereum, Cardano, Polkadot… there are many virtual currencies beyond the famous Bitcoin. In fact, today the number of digital currencies stands at around 10,000 worldwide.
What differentiates the types of cryptocurrencies are the projects behind them. Blockchain technology used by cryptocurrencies can be used for many different purposes. From using a cryptocurrency as a means of payment, as is the case with Bitcoin, to the smart contracts of the Ethereum network. There are also currencies that use completely different formulas.
¿How many cryptocurrencies are there?
The cryptocurrencies that, despite the falls, maintain a strong position in the top 10 are:
Top 10 list according to Coinmarketcap updated to February 2022.
1. Bitcoin
2. Ethereum
3. Tether
4. Binance Coin
5. USD Coin
6. XRP
7. Cardano
8. Solana
9. Terra
10. Avalanche
The number of existing virtual currencies is much larger and continues to grow every day. To consult the legal cryptocurrencies you can do it through more than 800 digital currencies and their corresponding price such as: World Coin Index y CoinMarketCap.