5 most promising digital currencies
Digital currencies are an increasingly popular form of payment with a variety of applications for anyone completing financial transactions online.
Why do people use cryptocurrencies? Cryptocurrencies, or digital currencies, help someone efficiently send money from one place to another without relying on a bank or institution. Sidestepping the use of an outside financial institution makes transactions quicker and more convenient. The most significant difference between digital currency and a fiat currency (such as USD) is that digital currency doesn’t have a physical form and exists solely online.
Digital Currencies to Watch in 2020
Digital currency, like any other currency, is used in exchange for goods and services. Due to its electronic nature, it’s especially useful for making transactions online. A typical example is spending money while gaming online or purchasing from online businesses. Some expect digital currency will be a large part of the future as its popularity grows, and more people use it to transfer funds. Whether you’re new to digital currencies or looking to explore your options further, here’s a list of the five most promising digital currencies available today.
Bitcoin is a cryptocurrency that was created in 2009 underneath the alias Satoshi Nakamoto. It uses peer-to-peer technology, rather than an institution like a bank, to facilitate instant payments. Bitcoin is considered the first successful implementation of a distributed cryptocurrency, predating others that have popped up since. It is currently the most widely used cryptocurrency in the world. Many small and large businesses accept Bitcoin as payment. Fun fact: the honeybadger is Bitcoin’s unofficial animal mascot!
Founded by Vitalik Buterin, Ethereum was a crowdfunded project launched in 2015 and is the second-largest cryptocurrency platform behind Bitcoin. Its crypto token is known as Ether or ETH. The most significant advantage of Ethereum is its number of uses as a digital currency. For example, trading virtually, running applications on the Ethereum network, and gaming online, like with these best Ethereum casinos. Currently, Ethereum is developing a series of upgrades called Ethereum 2.0. This digital currency is especially popular among tech giants.
Ripple, whose crypto coin is called XRP, is the third-largest cryptocurrency by market cap. It’s the first digital currency to be adopted by mainstream financial institutions, simplifying its use. XRP differs from other digital currencies in that its primary purpose is to transfer other currencies or commodities such as gold or oil. Ripple’s network is much faster than Bitcoin’s or Ethereum’s.
Daniel Larimer launched the Entrepreneurial Operating System (EOS) in 2018. Within this system is a currency called the EOS token. This digital currency attempts to overcome specific issues surrounding digital currencies, such as speed, scalability, and flexibility. The most significant advantage of paying with EOS versus other digital currencies is its high number of transactions per second, making it a realistic option for real-world decentralized applications, or dapps.
Released in 2011 under the MIT/X11 license, Litecoin is very similar to Bitcoin in its function and use. Its peer-to-peer online transactions are conducted in units of litecoin and are not managed by any central authority. It’s most often used to transfer funds between individuals or businesses without needing to use an intermediary like a bank or payment processing service. Like EOS, it also has faster-than-average transaction rates.
Digital Currencies Today and in the Future
These digital currencies are a helpful tool for making online purchases today that would be more difficult using fiat currencies. Digital currencies allow someone to sidestep the more drawn-out process of making transactions through a financial institution like a bank when purchasing from elsewhere in the world or sending money to someone who uses a different financial institution.
Some people invest heavily in digital currencies, expecting their value to greatly increase in the coming years, or even hoping they will replace fiat currencies altogether. Others are wary of investing too much in digital currencies, considering there is no physical manifestation of their value. No one knows for sure what the future holds for these digital currencies and their uses. Still, as of right now, they are an increasingly popular form of payment with a variety of applications for anyone completing financial transactions online.
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