For those looking to start investing in cryptocurrency, today on ayomikun Abraham’s blog present the top 4 cryptocurrencies to invest in 2022. Let us dig deeper and examine each of these cryptocurrencies separately, so that you get a deeper insight into why they are considered valuable assets.
Top 4 cryptocurrencies to invest in 2022
Ethereum is the cryptocurrency generated by the Ethereum protocol as reward for miners on the Proof-of-Work system to add blocks to the blockchain. Launched in 2015, Ethereum is an open-source, blockchain-based, decentralized software platform used for its native cryptocurrency, Ether. Ethereum is a blockchain-based software platform which can be used to send and receive value worldwide through its native cryptocurrency, ether, without any interference from third parties. Its native cryptocurrency is the main token on the Ethereum blockchain, and acts as the main fuel powering all activities on Ethereum.
While you can buy and exchange Ethereum like Bitcoin for investment, it is also the software platform developers can use to build new applications – usually cryptocurrencies-related, or otherwise designed to make buying, selling, and using cryptocurrencies a more seamless experience. Instead of creating value like digital gold as Bitcoin does, Ethereum has emerged as the second-largest cryptocurrency, operating as a software platform running on the Blockchain. With the first block mined in July 2015, Ethereum has since grown to be the largest smart contracts platform of its type, as well as the second-largest blockchain ever measured in terms of market cap. Ethereum is a smart contract platform which allows entities to use blockchain technology to build a number of different digital ledgers, and it can be used to build additional crypto-currencies running on Ethereum.
In addition to smart contracts, the blockchain is capable of hosting other crypto-currencies, called tokens, via the use of its ERC-20 interoperability standard. Ethereums main innovation is to develop a platform allowing Ethereum to run smart contracts using a blockchain, further strengthening the advantages of smart contract technology already present. Ethereums attraction for developers is unique because it is the first platform to enable anyone around the world to write and deploy code that will work without risk of censorship. Ethereums self-proclaimed aim is to be the worlds global decentralized applications platform, allowing users around the world to write and run software that is censorship-resistant, offline, and fraud-resistant.
Its native cryptocurrency is a sort of transportation medium to get around on Ethereums platform, and is mostly sought after by developers looking to develop and run applications within Ethereum. Ethereum is not only a platform, it is also a programming language (Turing Complete) that runs on a blockchain, helping developers build and release distributed applications. Ethereum Classic is a distributed network composed of a blockchain ledger, native cryptocurrency (ETC), and a robust on-chain ecosystem of applications and services. Users can interact with Ethereum using Ether, the networks cryptocurrency – or purchase and hold Ether as a store of value.
Ethereum allows developers to create applications — in the world of Ethereum, these are called Dapps, or distributed applications — that combine these smart contracts into a simple-to-use interface. Unlike traditional apps, its special applications are autonomous thanks to its use of smart contracts. These smart contracts are at the core of all the decentralized applications (dapps) built on Ethereum, and also every other dapp built across other blockchain platforms.
This includes contributions of code for Ethereums main client, the scaling technology at layer two, and the Decentralized Applications (dApps) built on Ethereums. Ethereums native cryptocurrency, Ether (ETH), not only provides a similar incentivized structure as Bitcoin for the security and maintenance of the network, it is also used as the gas for running transactions via smart contracts. Gas is the unit of account within the Ethereum virtual machine used to calculate a transaction fee, which is the amount of ETH that a sender of a transaction has to pay the miner that included the transaction into Ethereum. A transaction in Ethereum contains information about the transaction sender and receiver, an option for including the amount of ether being transferred, the bytecode for a smart contract, and a transaction fee that the sender is willing to pay to a network verifier in order for the transaction to be included in the blockchain, known as gas prices and limits.
Bitcoin is a form of digital money that allows transactions to take place without interference from a central authority. Bitcoin was among the first digital currencies to utilize peer-to-peer technology, which facilitated instant payments. Bitcoin is a decentralized digital money, with no central bank or sole administrator, which can be sent from user to user over the peer-to-peer bitcoin network, with no intermediary.
Unlike fiat currencies, bitcoins are created, distributed, traded, and stored using a decentralized ledger system known as a blockchain. Bitcoin is organized via a network known as a blockchain, which is essentially an online ledger that keeps secure records of every transaction and bitcoin price in one place. Bitcoin offers the promise of lower transaction fees compared to traditional online payment mechanisms, and unlike currency issued by governments, is managed by decentralized authorities.
Bitcoin has managed to build a global community and birthed a whole new industry consisting of millions of enthusiasts creating, investing, trading, and using bitcoins and other crypto-currencies in their daily lives. Bitcoin is, in many ways, nearly synonymous with cryptocurrencies, meaning you can buy or sell bitcoins — whether it is for fiat or for other cryptos — on just about any cryptocurrency exchange. Bitcoin is open-source; its design is public, no one owns or controls this crypto, and anyone can participate.
Bitcoin was intended to provide an alternative payment system, one that operates without any central control, but is otherwise used in the same way as conventional currencies. Some concepts of a similar kind of decentralized electronic money predated BTC, but Bitcoin holds the distinction as being the first-ever cryptocurrency that has seen real-world usage. Given that Bitcoin was the first cryptocurrency to appear on the market, the other digital currencies that have emerged are called altcoins.
There have been some high-profile cases where bitcoin exchanges were hacked and funds were stolen from Bitcoin exchanges, but invariably, the services stored bitcoins on behalf of customers. The vast majority of Bitcoin transactions occur on a cryptocurrency exchange, not used in transactions with merchants. Rather, they are buying and selling bitcoins and other digital currencies on one of the many popular online markets known as Bitcoin exchanges.
There are a variety of places where you can buy bitcoins in exchange for other currencies, and there are international exchanges as well as local ones. Even for people who have not discovered it using their high-powered computers, it is possible for anyone to buy and sell bitcoins for whatever price they would like, usually via an online exchange such as Coinbase or LocalBitcoins. There are a number of online cryptocurrency exchanges for people to conduct trades on, but transactions can also take place in-person or on any communications platform, which allows small businesses to also accept Bitcoins.
No one controls the block as the Blockchain is decentralized on each individual computer holding the Bitcoin wallet, which is something that only comes if you purchase Bitcoin. The successful miners who found the new block are allowed by the rest of the peer-to-peer Bitcoin network to reward themselves with newly created bitcoins and transaction fees. Once 21 million bitcoins are mined, there will be no more bitcoins being awarded as rewards to miners, and miners are expected to make money through transaction fees.
Since running their own computer rig costs money because of the capital costs to purchase a rig and electricity costs, miners are rewarded by the new supply of bitcoins, which is part of their currency system, and a certain fee paid by whoever wants to transact (in this case, it is Alice). In this way, Bitcoins and other crypto-currencies function in a different manner than fiat currencies; in centralized banking systems, currencies are released at a rate which is consistent with growth of commodities; this system is intended to keep prices stable. Mining is a process which supports the network, as well as the method by which new coins are created.
3. Binance Coin
Binance Coin, represented by the symbol BNB, came to be as a means of paying fees in the Binance cryptocurrency exchange. Perhaps the most dominant use case of Binance coin is the token being the main currency on both Binance Chain and the Binance Smart Chain. Critically, when users buy or sell cryptocurrency through the Binance Smart Chain, transaction fees are charged in Binance Coin. BNB coin has historically served as a way to reduce fees in trading platform The Binance Exchange, where customers on the exchange pay lower fees while holding BNB, and paying the platforms fees in BNB.
BNB began as an asset sold on the Binance Initial Coin Offering (ICO), becoming a way for users of the Binance exchange to pay lower trading fees on the trading platform after the exchange launched. Binance started as an Initial coin offering (ICO) and has since grown to be one of the largest cryptocurrency exchanges worldwide, both by volume traded and market share of the network traffic. The ICO was held in July 2017, soon after Binance launched, and saw Binance raise $15 million in funding, with the BNB price being $0.10 at the time of the ICO.
Since BNBs launch, the exchange has also benefitted from increased interest from investors for BNB. Binance supports the widest variety of BNB trading pairs, as well as having the best exchange rates for the coin.
Binance Coin supports several utilities in its ecosystem, which includes paying for transaction fees, exchange fees, listing fees, and any other fees in Binances exchange. Currently, Binance Coin does not offer trades vs. fiat currencies, and BNB trades are possible only via cryptocurrencies such as Bitcoin or Ether tokens. Since Binance Exchanges ICO, BNB has been trading substantially higher in value, achieving price tags over US$600 per coin at times.
As a special utility token for the Binance exchange, the most direct way of getting hold of BNB coins will be by purchasing them via Binance. The other option is to purchase Binance Coin on a cryptocurrency exchange, then withdraw the BNB coins into a private wallet once you have completed your purchase. People can store BNB in wallets that are compatible with cryptocurrency exchanges, and directly send coins to others to use in payments or other ways. The Binance exchange also has a redemption plan where they use 20% of their profits to redeem the BNB tokens, then burn/destroy them until 50%, or 100M, BNB tokens are purchased.
Unlike the vast majority of cryptocurrency, Binance has a buyback scheme for BNB coins, in which Binance will use 20% of its quarterly profits to buy back an overall 50% of all BNB coins, over time, which amounts to 100 million coins, leaving 100 million BNB coins in circulation. We mentioned earlier a few major use cases of Binance Coin — that includes a smartchain for the Binance Coin, reduced trading fees, and payments for goods and services. Binance has been steadily remaining one of the largest exchanges, with its trading volumes being adjusted, in no small part due to BNB coin incentives.
Binance no longer supports withdrawing BNB tokens from the ERC-20 in their trading platform, but continues to support the exchange of tokens from ERC-20 tokens on their own, proprietary, Binance Chain. According to Binances whitepaper, exactly half the maximum supply of BNB tokens is dedicated for initial coin offerings (ICOs) and token public sales. Originally created in the Ethereum Blockchain as a ERC-20 token in July 2017, BNB was moved over to Binance Chain in February 2019, becoming a native coin on Binance Chain.
4. Lite Coin
Litecoin is a cryptocurrency founded in 2011, two years after Bitcoin, by a former engineer at Google named Charlie Lee. Litecoin (LTC) has a market cap much smaller than that of bitcoin, but it is still one of the most traded cryptocurrencies. The cryptocurrency was created on top of Bitcoins (BTC) protocol, but it is different from the other due to the hashing algorithms used, the hard caps, block transaction times, and some other factors. Like Bitcoin and several other cryptocurrencies, Litecoin (LTC) uses a PoW consensus algorithm in order to make sure transactions are confirmed quickly and without errors.
Bitcoin, Litecoin, and several other cryptocurrencies utilize a Proof-of-Work (PoW) algorithm in order to secure their networks. While it still takes at least six confirmations by most exchanges for Litecoin (LTC) to be considered irreversible, peer-to-peer (P2P) cryptocurrency payment networks are able to often settle transactions for Litecoin almost instantly. Similar blockchain technologies are used by a range of different cryptocurrencies, including Litecoin and Bitcoin. Litecoin (LTC) is a cryptocurrency designed to enable faster, more secure, and lower-cost payments, by taking advantage of unique properties of blockchain technology.
Litecoin is a peer-to-peer decentralized cryptocurrency network that allows users to send or receive payments instantly, at a low price, anywhere in the world. Litecoin (LTC) is one of the only cryptocurrencies that has a broad range of fiat exchange pairs, which you can trade with U.S. dollars (USD), Korean won (KRW), euros (EUR) when buying Litecoin. Created by former Google engineer Charlie Lee, Litecoin (LTC) was an early altcoin – the name given to cryptocurrencies that are different from Bitcoin (BTC) (and sometimes, other than Ethereum). While you may not see Litecoin (LTC) pop up in headlines as frequently as Bitcoin (BTC), it is still one of the most popular cryptocurrencies.
From its very beginning, with no extra technical layers added to Bitcoins blockchain, Litecoin (LTC) is a faster cryptocurrency to transact with than Bitcoin, and does it at a lower cost. This makes it an attractive alternative to Bitcoin in developing countries, where transaction fees can be the decisive factor for choosing which cryptocurrency to back.
While Litecoin is already accepted by some merchants as a form of payment, in terms of the retail/merchant space, Litecoin has just begun to scratch the surface. Litecoin, along with other cryptocurrencies, is already being used as a medium for money transfers, and for sending and receiving value.
Both these factors make Litecoin a much more attractive option for crypto transactions, whereas bitcoin functions as storage. In technical terms, the two are quite similar, though Litecoin has a supply cap of 84 million, while bitcoin has a supply cap of 21 million.
However, when miners add a new block to Bitcoins blockchain, they are rewarded with freshly generated LTC. Litecoin also generates new blocks in two-and-a-half minutes, as opposed to ten minutes for bitcoin block creation. The average confirmation time of transactions on the Bitcoin network is now a little less than nine minutes for each transaction, whereas for Litecoin it is about 2.5 minutes.
While it would be tempting to think Litecoins payment patterns will converge with bitcoins, it has been found that payment patterns for Litecoin and Bitcoin are virtually uncorrelated today, with those patterns continuing to diverge over time. The recent privacy-focused MimbleWimble update on the Litecoin (LTC) Blockchain The Litecoin (LTC) Blockchain has caused the Koreas two largest cryptocurrency exchanges to release investment alerts about LTC). According to Bithumb, using MimbleWimble in Litecoin allows users to conduct confidential transactions, which allows them to send tokens by hiding the transaction data.
Final note on cryptocurrencies to invest in 2022
Although investing in cryptocurrencies may be risky this article has showed you the best cryptocurrencies to invest in 2022 so that you are well guided.