Since the emergence of Bitcoin in 2009, thousands of projects to develop virtual currencies have been born. While many of them have failed in the attempt, others have been consolidating and growing steadily.
What now? Which cryptocurrencies have the greatest potential in the future, and in the next 5 years?
In this guide you will find the 12 virtual currencies that can explode or continue to grow, both in the short and long term.
Bitcoin is the most widely used and most famous of all cryptocurrencies. Its success can be explained by the fact that it was the first to appear. The first cryptocurrency was born thanks to a network and a new technology called blockchain (block chain, which is behind the functioning of Bitcoin).
Technology that opened the doors to a new world of possibilities in which many companies and start-ups are investing.
History of Bitcoin
Bitcoin was born in January 2009, when the first open source version was released. Bitcoin’s creator is Satoshi Nakamoto, a mysterious personality whose identity is secret and who has become famous since the rise of the incredible cryptocurrency underlying Bitcoin.
In April 2016, an Australian entrepreneur, Craig Wright, claimed to be the man behind Satoshi Nakamoto and provided evidence to prove it; many still doubt the veracity of that revelation. Read the full history of Bitcoin here.
Bitcoin is implemented through a peer-to-peer (P2P) network system in Wei Dai’s B-Money project and Nick Szabo’s Bitgold project.
The basic principles of Bitcoin are described in the “white paper” written by Satoshi Nakamoto in 2008. The official client, Bitcoin Core, is a free software born from code written directly by Satoshi Nakamoto to implement the communication protocol and the peer-to-peer network.
Why invest in Bitcoin
Being a real currency to all intents and purposes (see El Salvador which approved the use of BTC as an exchange currency), bitcoins are used for any kind of virtual transaction. Initially, they were simply exchanges of money between individuals (with the advantage of very low fees).
Over time, more and more entities started to accept payments in bitcoins. The anonymity linked to Bitcoin also makes it ideal for criminal activities of any kind.
Bitcoins are now everywhere, from ATMs to (almost) ETFs.
Bitcoin is undoubtedly one of the most exciting creations of our time, and it has infinite potential (especially its blockchain technology).
Buying Bitcoin: pros and cons
Pros and cons of buying Bitcoin? Among the pros are the security of transactions, anonymity, easy access by anyone from anywhere in the world and low fees.
Among the cons: the ease with which criminal and immoral activities can be carried out, the risk of physically losing bitcoins (they can be lost like cash) and the high volatility of their price.
2. Ethereum (ETH)
The second most important cryptocurrency in terms of notoriety is Ethereum. To be more precise, Ethereum is not just a cryptocurrency, but a decentralised smart contract platform within which the Ether currency is used.
History of Ethereum
The Ethereum platform was created by Vitalik Buterin, an expert cryptographic programmer who was previously part of The Bitcoin Project, where he promoted the creation of a new language for programming and creating a new application.
He finally decided to launch his solo project, the Ethereum Project, made possible by a crowdfunding campaign that raised 31,591 bitcoins, approximately $18.4 million (as of 2 September 2014).
Ethereum is a decentralised blockchain platform, created using the Turing-complete programming language, where anyone can create and manage smart contracts.
To join this network, counterparties “pay” to use the platform’s computational power through a cryptocurrency called Ether, which is both a cryptocurrency and the platform’s fuel.
Ether was not programmed to function as a normal cryptocurrency, like bitcoins. In fact, Ether can be spent and earned only on the Ethereum network and is used to execute specific transactions, such as paying to use the network’s computational power and launching the application.
you can still buy ether (eth) on authorised trading platforms or exchanges, even if you are not part of the ethereum community.
Why invest in Ethereum
Although Ethereum is often compared to Bitcoin, the paths taken by both cryptocurrencies could not be more different. Ethereum is laying the foundations to become an infrastructure with incredible potential and this makes it very interesting, especially as an investment.
To get an idea of the purpose of this platform, here are some of the things you can “build” with Ethereum:
- electoral systems
- registrations with domain names
- securities markets
- crowdfunding platforms.
In addition, it is possible to manage intellectual property. All this, of course, without the need for lawyers, notaries or other legal entities.
3. Ripple (XRP)
Ripple (XRP) is the third largest digital currency in terms of market capitalisation and trading volumes.
But unlike Bitcoin, which was born with the aim of bypassing the intermediation of banks and financial institutions altogether, Ripple was born to “work together with banks to change the way we send money around the world”.
History of Ripple
The Ripple Protocol was developed by Chris Larsen and Jed McCaleb, founders of OpenCoin, familiar faces in the open source community.
Unlike the other two cryptocurrencies, the name Ripple applies to both the currency and the network. Through the Ripple network you can send not only the eponymous cryptocurrency, but also other non-digital currencies, so you can send and exchange money.
In other words, you can transfer euros to a person who will receive dollars directly. The exchange is done by buying and selling Ripple in exchange for the other two currencies.
Ripple has been defined as a “Global Settlement Network”, its end users are banks, and it is intended to be a valid alternative to clearing houses and the SWIFT network.
Why invest in Ripple
The Ripple Project’s main focus is on international payments. With the implementation of blockchain logic, it was possible to eliminate a long list of intermediaries, thus reducing the costs and execution time of exchanges, which are carried out in just a few seconds. This is a remarkable improvement compared to the average 10 minutes for Bitcoin and several days for banks.
The Ripple Project is currently one of the most important cryptocurrencies and is the one that is most integrated with banking and financial institutions. It has attracted the interest of many well-known banks, such as the Bank of England and the Bank of Japan.
Litecoin (LTC) was the second publicly accessible cryptocurrency and quickly gained a reputation as a rival to Bitcoin.
History of Litecoin
Litecoin was launched on 13 October 2011 by Charles Lee, approximately two and a half years after the creation of Bitcoin and within a short time more than 20 million coins had been generated.
Litecoin’s trend followed that of its more popular peer Bitcoin and for a long period of time it was considered one of the best cryptocurrencies available.
In 2016, it moved from second to fourth in terms of market capitalisation, being overtaken by Ethereum and Ripple. However, it is still the second most accepted currency by websites that accept virtual currency payments.
Why invest in Litecoin
One could say that Litecoin is broadly a copy of Bitcoin, but it has some improvements, such as the use of SegWit and Lightning Network. These features allow Litecoin to handle more than one transaction at a time, reducing the bottleneck effect.
A Litecoin transaction typically takes approximately 2.5 minutes compared to 10 minutes for Bitcoin. This is one of the reasons why Litecoin is so well known. In short, the Litecoin network has theoretically 0 fees and allows sending and receiving payments four times faster than Bitcoin.
Like the cryptocurrency it was inspired by, Litecoin is a full-fledged currency and can be used for any type of transaction.
Litecoin has grown over time and is now considered the silver in a world where Bitcoin is the gold. In recent years, however, it has lost ground in terms of growth and expansion and its creators are working to give it a new lease of life.
In any case, this cryptocurrency is still the most widely accepted after Bitcoin. Beyond scepticism, many believe that Litecoin’s value is underestimated.
Dash is another important cryptocurrency born during the Bitcoin wave, but it has tried to differentiate itself from the rest thanks to functionalities that make it more useful and better.
History of Dash
Launched in January 2014, the Dash platform has changed its name several times. Initially it was called XCoin; then, in February of the same year, it was renamed DarkCoin; finally, in March 2015, it was called Dash.
The logic behind the Dash network is similar to that of other cryptocurrencies, but some improvements in terms of privacy, speed and security have been implemented. PrivateSend technology allows users to send private transactions and enjoy decentralised governance (DGBB). On the other hand, InstantSend technology makes transactions much faster than Bitcoin.
Why invest in Dash
A two-tier architecture allows Dash to achieve optimal levels of security and reliability: the first tier is composed of miners, which allow the network to record all transactions on the blockchain. The second level allows Dash, through so-called nodes, to provide advanced functionalities.
Although Dash Coin is a fully-fledged currency, most vendors still do not accept it.
The Dash Project is very ambitious. Following the expansion of their network they aim to create the PayPal of cryptocurrencies, called Wallet Dash Evolution, an intriguing idea.
6. Chainlink (LINK)
Chainlink (LINK) is a decentralised, secure and reliable oracle network. Recall that Oracle networks are useful tools for cryptocurrencies to interact with the physical world. In this way, smart contracts can execute actions based on information contained in the real world.
History of Chainlink
Chainlink’s origins date back to September 2014, when three experts in the field – Steve Ellis, Ari Juels and Sergey Nazarov – launched SmartContract.com. They also developed a series of decentralised infrastructures to create communication bridges between real-world events and public blockchains.
How does ChainLink work? Through a network of nodes called Chainlink Nodes (CN), useful for monitoring data from a real-world event and transferring it to smart contracts that are working on Ethereum.
To make sure that the data received is always correct, Chainlink performs a kind of cross-checking, finding the information from many different nodes by chance. Taking as correct the answer indicated by most of them.
Why invest in Chainlink
Chainlink’s project may seem unrealistic and far from today’s reality. However, it is currently positioning itself as a benchmark for DeFi, and is one of the most important oracle networks today.
When decentralised finance spreads worldwide and cryptocurrencies are increasingly used in the “real” world, then the ChainLink project will have the advantage of being far ahead of its time.
Therefore, investing in ChainLink today also means believing in something that currently has limited value, but tomorrow could increase exponentially because of the leading role it is assuming.
eToro has the great advantage that it can be used both as a broker and as an exchange to invest in Chainlink.
It can also be used as a wallet. Also, you can convert the cryptocurrency you own by CFD contract to direct token or vice versa whenever you want. All this without having to move from one place to another.
7. Uniswap (UNI)
The Uniswap (UNI) cryptocurrency is the governance token of the eponymous decentralised exchange platform. A virtual currency that has grown a lot in recent months and has attracted many investors to the Uniswap V2 exchange.
It was created by Hayden Adams, one of the developers of Ethereum, in collaboration with the creator of ETH, Vitalik Buterin. Its goal was to create a decentralised and anonymous exchange that would allow the exchange of any pair of cryptocurrencies based on the Ethereum ERC-20 network.
Why invest in Uniswap
UNI works on the Ethereum blockchain and was created to encourage and publicise the use of DeFi instruments on its reference platform. It exists to create liquidity, stimulate trading and generate value from it.
If you want to buy Uniswap, you will have to use an exchange or broker that includes it in its marketplace. Our recommendation is to use eToro, as it is the easiest and fastest trading platform to use. Since 19 April 2021 it has been available on the platform and it is possible to do both holding and trading with UNI.
8. Cardano (ADA)
With its innovative Ouroboros algorithm, Cardano is trying to speed up by separating transactions and smart contracts into two blockchains.
Launched in 2017, Cardano is one of the youngest cryptocurrencies available today. Despite its late arrival, it benefited from the experience of other cryptocurrencies.
It was developed by IOHK (Input Output Hong Kong), a team with expertise in blockchain technology and the issues involved. Since its launch, Cardano’s Ouroboros algorithm has been praised by many experts, a rare intellectual endorsement among lesser-known cryptocurrencies.
IOHK, with a team that had already worked with Ethereum and Ethereum Classic, has published a lot of educational material to further exploit the platform and educate people in the use of blockchain technology.
Cardano’s main feature is its Ouroboros algorithm, which is based on the proof-of-stake mechanism and works on two levels, separating the blockchain of smart contracts from that of transactions in general: all in order to increase the speed of both.
This separation could also lead to further evolution of smart contracts. In fact, Cardano also claims that it makes upgrades much easier.
For example, if they were to change a feature of smart contracts, they could isolate only the smart contract blockchain, while the transaction blockchain would continue to function normally.
Cardano can be used both for transactions and for building and using smart contracts and dApps, ideal for financial applications.
Why invest in Cardano
The concept of a multi-tier blockchain is certainly revolutionary, so it is surely a more than valid option for smart contracts.
That said, it is worth noting that Ethereum is still the king of dApps and it will take time to dethrone it. However, Cardano has an extraordinary team behind it, among the most experienced blockchain experts.
Cardano will probably be used by anyone who wants to create smart contracts, given that Ethereum is already well established in the field of dApps. Final note: IOHK’s willingness to be open to new developments makes Cardano more flexible and better able to adapt to changes than its competitors.
IOTA is a highly innovative cryptocurrency and a potential alternative to blockchain technology. In a way, it is a blockchain without blocks.
The principle behind it is to use the IoT (Internet-of-Things) to overcome many of the barriers of blockchain.
History of IOTA
IOTA was developed in 2017 by The IOTA Foundation, a German non-profit foundation. In addition to the development of IOTA, they are focused on the potential of the technology itself, its impact on the IoT and on educating the public about how it works.
Instead of a blockchain, like most cryptocurrencies, IOTA uses an algorithm called The Tangle. The Tangle has eliminated miners, creating a system that allows you to make a transaction only if you validate two other transactions firs
Why invest in IOTA
The IOTA team claims that this drastically reduces the computational power needed to handle a transaction, so less powerful devices can be used and transactions are faster.
Other benefits are: no fees because no miners are needed; almost infinite scalability; increasing speed as users increase and not vice versa.
IOTA has great potential as its use is not limited to computers and phones, in fact, it can be used on any device capable of connecting to the internet, which is why it is called IOTA.
A huge field of application capable of revolutionising both the exchange of information and payments. For example, cars could pay for parking and fuel and homes for bills.
IOTA has dealt an interesting blow to the world of cryptocurrencies. We are only just getting used to the blockchain and The Tangle could already have overtaken it. However, before we get too carried away, let’s remember that it is difficult to define the potential impact of IOTA until IoT becomes an established reality. Moreover, some have highlighted the possibility that IOTA may not be free forever.
Stellar shares with Ripple the ability to handle transactions involving multiple cryptocurrencies and regular currencies, but as companies they have very different objectives.
Stellar is a blockchain born as a spin-off of another cryptocurrency: Ripple
History of Stellar
It was born in 2014, and shortly afterwards the Stellar Development Foundation was founded. While Ripple focuses on large financial institutions, Stellar is open to the public.
Stellar, like Ripple, has among its founders Jed McCaleb, cryptocurrency expert and creator of Mt. Gox, the former Bitcoin exchange platform.
From a technological point of view, Stellar is very similar to Ripple and offers the possibility of making transactions not only with its own currency (Lumens), but also between cryptocurrencies and normal currencies.
While some point to Stellar as a Ripple clone, others praise its decentralised and open source structure, two features highly acclaimed by the cryptocurrency community.
Despite the many similarities between Stellar and Ripple, the projects have very different goals. While Ripple has achieved fame by working with some of the world’s largest banks, Stellar chose a different path. Stellar is committed to staying open source, opening itself up to dApps and many other uses.
Why invest in Stellar
In a world still dominated by a heterogeneous variety of cryptocurrencies, Stellar seems to be a middle ground, which not only allows people around the world to do business without needing banks (one of the reasons for the emergence of cryptocurrencies!), but also aims to reduce some of the innate rifts of the cryptocurrency world.
It is already active, available and usable, not a vague promise for the future, which is motivating. However, it may only be a temporary solution.
With its promise to solve the scalability problem, EOS is surely a cryptocurrency to consider. By focusing on dApps, EOS has a good chance of dominating this niche market.
EOS or EOSIO, which will be one year old in June, is very young compared to the competition.
Like the rest of the recently born cryptocurrencies, it has the advantage of knowing exactly what some of the challenges of the sector are and what has determined the success of its predecessors.
The team behind the birth of this young cryptocurrency is also very young; part of the team of this private company is coordinated by Brendan Blumer who, despite his age, is very experienced.
Why invest in EOS
EOS focuses on the issue of scalability: it has stated that the growth of its platform, as the number of users increases, will be horizontal and not vertical as is the case with most other cryptocurrencies.
This would increase scalability enormously, because it would simply be a matter of adding new computers as the system grows without the need to continually boost the pre-existing ones on the network.
In addition, the EOS algorithm manages the availability of the network, redistributing it proportionally based on the number of coins held.
Today, the EOS blockchain works mainly on dApps, being the direct competitor of Ethereum. To a large extent, EOS intends to become an enhanced version of Bitcoin and Ethereum.
Although EOS is quite widespread, it must keep its promise to solve the scalability problem that afflicts most cryptocurrencies, case in point Bitcoin and Ethereum.
If it fails to do so, EOS will most likely end up on the list of “dead cryptocurrencies”. However, if it succeeds, it could become a major cryptocurrency in the future. In any case, it will have many uses linked to dApps.
12. Binance Coin
Binance Coin is an interesting choice for traders, as its value depends almost entirely on the only place where it can be spent: the Binance cryptocurrency exchange.
Although it does not want to dominate any particular sector, it is a cryptocurrency known for the stability of its value, a feature particularly appreciated by some.
History of Binance Coin
Binance Coin was created in 2017 by Binance, the world’s largest cryptocurrency exchange based in Hong Kong. The cryptocurrency exchange is very popular and offers the possibility to trade many cryptocurrencies, it is a giant in the sector. This means that it has a huge experience in both trading and cryptocurrencies.
Currently, Binance Coin does not offer anything special from a technical point of view. That said, Binance Coin has a maximum limit of 200 million tokens, a figure that intimidates the 21 million Bitcoin, so it should not be ruled out that in the future it could overtake the reigning cryptocurrency.
The main advantage of Binance Coin is the possibility of using the coin on the Binance exchange. Traders who use this cryptocurrency as a form of payment get a 25% discount (50% last year). This strategy has allowed Binance to be able to stimulate a huge amount of traders to bet on Binance Coin.
Why invest in Binance Coin
In a way, Binance Coin can be considered a good discount for traders, which makes it highly attractive, especially considering that the Binance exchange has very low exchange fees and the ability to trade more cryptocurrencies than any other platform.
Being a coin launched by a cryptocurrency exchange, it is tied to Binance’s performance.
Although Binance Coin is protected from outside influences, such as the overall performance of the cryptocurrency sector, it is necessary for the company to do well for its value not to fall.
If you don’t like the characteristic volatility of the cryptocurrency market, but are still interested in cryptocurrencies, Binance Coin may be a good choice, as it is known to be one of the most stable cryptocurrencies available.
How to invest in the cryptocurrencies of the future?
There are two ways to buy cryptocurrencies:
- Via a cryptocurrency exchange (actual purchase of cryptocurrencies)
- Through a broker’s platform (CFD trading)
When you buy a cryptocurrency on an exchange, you own it for all intents and purposes, so you can store it in a digital wallet.
Once you have bought a cryptocurrency, you will probably wait for its price to rise before reselling it for a profit. Alternatively, you can use it as a form of payment or convert it into other cryptocurrencies.
Best brokers to invest in cryptocurrencies
In our opinion, the best broker for cryptocurrency trading is eToro.
Click here to open a demo account at eToro and try it out for yourself, with virtual money.
eToro not only offers all the benefits we’ve talked about, but much more.
At eToro you can take advantage of their Social Trading Network which is basically a social network with thousands of traders sharing ideas, thoughts and market and trading strategies every day.
In addition, you can take advantage of it directly by copying other traders’ cryptocurrency trades both manually and automatically.
But we’re not done yet.
eToro is known for its innovative spirit and the creation of new investment products.
One of its latest is probably among the most successful, the Investment Portfolios. While there are many such funds, eToro created one exclusively for cryptocurrencies: eToro CryptoPortfolio.
In a nutshell, the most important cryptocurrencies are grouped in a single fund where you can easily invest by buying a share, as with the CFDs we talked about earlier.
By investing in a fund you can take advantage of diversification and minimise risk. Buying this product is a convenient and advantageous solution for anyone who wants to invest in cryptocurrencies for the long term.
Let’s take a look at the cryptocurrencies available on eToro that have established themselves on the international scene and see what features characterise each of them.