If you’re new to cryptocurrency, it might be a bit daunting when making your first investment. After figuring out how to purchase your tokens it can be equally perplexing to decide which tokens you want to buy.
You all have heard about Bitcoin, who hasn’t? But then, on the Bitcoin exchange, you find many other currencies to choose from, and what’s more, they are much cheaper than Bitcoin.
So, which cryptocurrency is right for you? And should you be investing in Bitcoin or one of the many altcoins that are on the market? We take a look at the pros and cons of each and hope you will find it useful in making your decision.
Bitcoin has been the longest established cryptocurrency and it probably was the first coin you heard about. This is predominantly due to the fact it gets a lot of media attention and has made some people very rich.
What are the benefits of Bitcoin?
- Currently, Bitcoin is number one for everything. It is frequently the most traded crypto token day in day out. It has the largest market share of all cryptocurrencies and it has the highest intrinsic value of any current token.
- It has a proven track record compared to some altcoins. Whilst this is not true of all altcoins, there are many that have not been on the market long enough to demonstrate long-term usability. Bitcoin has stood the test of time and continues to be used regularly.
- Blockchain technology is robust and intelligent. The blockchain that Bitcoin operates on is a very strong way of recording information in an accurate and consistent manner. Because the platform is strong, Bitcoin continues to flourish.
- Bitcoin has made many people millionaires. The token that has made the most people wealthy is Bitcoin. With many investors buying up the token early doors and holding on to it for a long period of time, they managed to sell the stock when it boomed and made windfalls. This is why there is a lot of media attention around Bitcoin.
As with any token, there are downsides to investing in or buying Bitcoin. Recently these have become a growing list and a headache for many Bitcoin users.
Negatives of Bitcoin are:
- The token has dropped considerably in value in a short period of time, leaving many investors and traders heavily out of pocket. Since December 2017 the coin has lost two-thirds of its value, dropping from around $19,000 to $6,400 that it is per coin today. This has been made equally worse by the fact that there is no current sign that this trend will reverse. In August 2018, Bitcoin lost 10% of its value overnight. Such slides in value are causing a tremendous amount of uncertainty within the Bitcoin community and fears are growing that it will never reach the heights it did before.
- Bitcoin is expensive. If you’re looking to buy into cryptocurrency in a cost-effective way, buying Bitcoin might not be a good choice for you. Not only is it incredibly expensive to buy a single coin, but it also carries high fees when transacting on the b Couple both of these factors with other crypto fees (exchange fees, etc.), and it can be very difficult to work out profit margins. Especially when fees on the Bitcoin blockchain typically increase over time.
- Bitcoin as a token doesn’t function very well. It is very slow to transact on (taking 10 minutes for a single block to be added to the chain) and has high transaction fees. This has drawn many users away from Bitcoin in search of crypto tokens that are faster and cheaper to use.
Before we address the benefits of altcoins, we should express that the term altcoin simply means any cryptocurrency that isn’t Bitcoin. Examples of altcoins are Ethereum, XRP, Litecoin. There are many altcoins on the market, each operates in a different way, and each will require individual research before deciding to buy. For the purpose of this article, we are looking at altcoins as a whole and generalizing rather than taking the merits of specific tokens.
The positives of altcoins are:
- They are cheaper to purchase than Bitcoin, which makes them a viable gateway to the world of crypto A lot of the tokens are also cheaper to use for transactions as well.
- Many altcoins alleviate the time factors associated with Bitcoin, focusing on faster and smoother transactions.
- Altcoins tend to represent the future of c There are many tokens that are very innovative and aim at bringing real-world solutions using digital currencies and platforms. This sets them apart from Bitcoin because they are to change the way the world works using crypto.
- Some altcoins are doing better during this slowdown in the crypto market compared to Bitcoin. As a whole, the cryptocurrency market has plunged dramatically in the last 9 months, but some altcoins are still making good gains on the merit of how good they are on the basic level.
Altcoins suffer from negative aspects as well and like Bitcoin, they are not immune to wild fluctuations in value.
The negatives of altcoins are:
- Unlike Bitcoin, altcoins rarely attract green investment, instead, they rely on traders that have already used Bitcoin and decided to diversify their portfolio. This is mainly because Bitcoin has the lion share of publicity whilst altcoins tend to be ignored by mainstream media outlets.
- If Bitcoin drops in value, altcoins tend to drop in value as well. Unfortunately, because Bitcoin is so dominant, any market changes around Bitcoin have a knock-on effect on This is largely because the investor confidence is mainly with Bitcoin.
- Some altcoins are yet to prove themselves, some just fizzle out without making any investors a profit. It can be as risky investing in altcoins as it is in Bitcoin.
With all that said, the cryptocurrency industry is a risky space to put your money in. However, there is still much room for growth with both Bitcoin and altcoins. Before making any investments, be sure to do enough research that might help you understand the market better and choose the coin which is best suited to your purposes.