Top 3 Cryptocurrencies for Beginners - Bitcoin Dogecoin Ethereum
After deciding to begin a journey into crypto investments and trading, it can be difficult deciding which currencies to invest in. Now that there are literally thousands of cryptocurrencies available, the list of choices can get overwhelming really fast. So which cryptocurrencies are the best investments for beginners?
As a beginner, it’s best to start your investments in larger and more stable crypto types. Among the most stable crypto options are Bitcoin, Ethereum, and Dogecoin. With that said, it’s also recommended to invest in a few smaller and lesser-known types. Most people choose to keep their investments at an 80:20 mix of larger to smaller investments.
Top 3 Cryptocurrencies for Beginners
In this article, we’ll explain the three most common cryptocurrencies and the pros and cons of each one. By the time you finish reading, you should have a good idea of which cryptocurrencies you’d like to go with.
Bitcoin was officially established as a cryptocurrency in 2009 and is widely referred to as the “original cryptocurrency.” Although nobody knows who exactly created Bitcoin, the framework was created by someone under the pseudonym of Satoshi Nakamoto. Bitcoin is, by far the most popular starter investment amongst newcomers.
- Bitcoin is easy to use and incredibly versatile. Because it’s so widespread, many businesses have adopted the use of Bitcoin since it was first established.
- Bitcoin is private. Transactions are made almost completely anonymously.
- Bitcoin is decentralized. This means no third parties are used to process transactions.
- Bitcoin has a high potential for return. This cryptocurrency is volatile and often fluctuates in its worth.
- Its volatility is a blessing and a curse. Because there’s a cap on creation, the constant price changes of its worth make it difficult to ensure demand is there.
- It’s more susceptible to scams. While it’s nice not to be regulated by an outside entity, this increases the risk of falling for a scam.
Simply put, Ethereum is a technology that allows users to send cryptocurrency to anyone they’d like for a fee. Ethereum is also considered the “world’s programmable blockchain.” While Ethereum is the name of the technology itself, the cryptocurrency used is referred to as Ether. Ethereum was created to be more than just a payment system. You can also find financial services, play apps and games, and can buy/sell/trade crypto through it.
- It’s more affordable than Bitcoin. While Bitcoin units are worth $60,000, Ether can be purchased for just under $2,000.
- It’s more stable than other cryptocurrencies. As the second-largest cryptocurrency platform, Ethereum is far less likely to crash than others.
- It’s more than just crypto. As an entire platform, you have access to financial services, games, and other apps.
- There’s no creation cap. While Bitcoin has decided to cap at 21 million, Ethereum has no creation cap.
- It’s more likely to develop bugs or crash. Because it has more features to it, bugs and web issues are far more likely.
- The transaction fees are high. This has turned off some investors from using the platform.
While this cryptocurrency began as a joke amongst developers and stemmed from an old meme, it has seen a major popularity push within the last year. It has now earned a spot in the top 5 biggest cryptocurrencies currently available. Dogecoin was originally created in 2013 but didn’t gain the popularity that it now has until 2021. This cryptocurrency runs much the same as Bitcoin and Ethereum.
- It’s good for the short term. Because it wasn’t originally made to be taken seriously, it’s more likely to crash than other options and works better as a short-term option.
- You get to be in on “the joke.” Dogecoin gained popularity when a Reddit thread encouraged investors to crash the stock market. It has become a major pop culture reference and it’s fun to be a part of something that was so huge.
- It’s a great “small investment.” Dogecoin is a good crypto option to invest in alongside bigger options like Bitcoin or Ethereum.
- It isn’t very solid. As it wasn’t meant to be serious for the long-term, it’s far more likely to crash.
- Quick popularity usually means a quick crash. Although popularity skyrocketed in 2021, the fast rise to fame tends to fizzle out quickly.
Parting Thoughts on Cryptocurrency for Beginners
It’s important to make sure you’re investing in larger scale and more stable cryptocurrencies before jumping into a smaller or more dangerous currency. Dipping your toes in multiple crypto investments helps reduce your risk and increase your chance of success.
Choosing Bitcoin and Ethereum, along with smaller or more risky cryptos, like Dogecoin, are a great way to keep your options open without putting all of your eggs in one basket.
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