A cryptocurrency happens to be an encrypted digital currency that is transferred from one person to the other. Quite a few digital currencies have been introduced in the market over the years and the most popular amongst them happens to be Bitcoin. However, apart from Bitcoin, there are also other cryptocurrencies out there, including Ethereum, Ripple, and Litecoin.
It can be somewhat challenging for traders to decide which one to go for since there are so many cryptocurrencies in the market right now. If you do not have much on the basic facts of cryptocurrencies, then you can check out the following article
1. Total number of coins to be mined
While choosing your ideal cryptocurrency, the first thing that you need to keep in mind is to figure out the number of coins which the miners can mine out. There is a simple logic working in the crypto field always. The general rule says that unlimited supply can reduce the cost of that particular crypto in the trade market and the one with limited supply reaches the higher figures in no time.
Thus, you always need to consider whether the crypto you have short listed has got limited market cap or not. Unlike bitcoins, if your selected digital currency comes with unlimited supply, then the chances of its price going up becomes less.
If you go for popular cryptocurrencies like that of bitcoin, then the limited supply of 21 million BTCs pushes its users towards buying the coin till it is available in the market. Otherwise, the chances of not being able to have your hands on such assets get reduced.
2. The community
It will be a good idea to look for cryptocurrencies having loyal followers as well as strong communities since this will help you to understand that this particular cryptocurrency is quite popular out there. Make sure to go through the feedback from the communities of these digital currencies as well as YouTube channels and other social media platforms for finding out their comments regarding your prospective investment.
In case you have any confusion regarding the coins, make it a point to go to the forums and check out the community for figuring out whether it will be a sensible idea to make an investment or not. For example, some more complicated and technical concepts have been explained in some of these forums. In case you like to comprehend which particular cryptocurrency to go for, then their community will be a fantastic place to get started with.
3. Take into consideration the security aspects
It is a fact that some digital currencies happen to be more secure as compared to others. It will be possible to figure out the security of a digital currency in various ways such as the following:
- What type of privacy features are provided by them?
- In what way can it handle your funds and transactions?
- Is it possible for any individual to see your balances or transactions?
4. Figure out the time and energy you would like to put into mining
Take into consideration the amount of energy and time that will be spent by you for mining while deciding which particular cryptocurrency will be ideal for you. Stick to the following for getting the best results:
- It will be a good idea to choose a digital currency having a high level of difficulty if you have sufficient resources and time for devoting to mining.
- Go for a low difficulty in case you like to invest a lesser amount of time on mining.
5. Choose any cryptocurrency with the best features
It will be a sensible idea to take into consideration privacy, usability, as well as security while choosing which particular cryptocurrency you like to purchase or pay bills with. It is important for the cryptocurrency to be accepted by online stores and merchants if you like to use it on a regular basis in your day-to-day life.
On the other hand, security will be important for you in case you like to maintain the privacy of your transactions from employers or governments, or any other prying eyes.
Furthermore, a powerful encryption application will be required by you if you are going to hold onto your coins for quite some time.
