We all know about the record breaking highs that Bitcoin is going through currently. This could be as a result of the CME that announced that it will now include Bitcoin futures, or it could be people trying to get in before the hardfork. It could indeed be both.
Yet, as everyone is focusing on Bitcoin and buying the most important cryptocurrency, there are a few other crypto coins that one should consider investing in. These are a good way for an investor to diversify their assets and have exposure to a range of different ones.
These are also good investments as they offer blockchain solutions that are quite different than that of something like Bitcoin. They have different protocols, are newer and serve other purposes.
In this post we will run over some of the most important cryptocurrencies on the market and will give you advice on which coins you should actively consider placing in your portfolio. We will also run over a brief explanation of what these coins are and how they can improve your returns.
Yet, before you can start trading these cryptocurrencies, you need to have an account set up at a brokerage.
Setting Up an Account
There are a number of ways in which you can get exposure to these Altcoins. One of these is through the use of a CFD broker. You will not hold the underlying asset but you will have exposure to the price movements through the derivative instrument.
There are a number of Crypto brokers that you can use. What is most important is that you choose a broker that is regulated in the jurisdiction where you are located. It is also important that they have all of the coins that you want to trade. One of the better brokers that you can use is the IQ Option broker.
Another way for you to get exposure to these altcoins is for you to create a simple account at an exchange such as Bittrex, or Poloniex. These are some of the largest and most well-known exchanges.
When you buy off of an exchange, you are buying a physical coin and hence you have to store them in wallets. These can either be on the exchange or they can be in your offline wallets / USB sticks.
Now that you have your accounts ready, you can take the active steps to invest in some altcoins.
Litecoin has often being termed the silver to Bitcoin’s gold. It is termed as one of the alternatives to Bitcoin and has not gone through most of the trouble that the Bitcoin community has. It was started by Charlie Lee in 2011 who used to be the head of engineering at Coinbase.
Litecoin is similar to Bitcoin in many ways but many claim that it is a much more advanced and efficient coin. Firstly, transaction on Litecoin network are much faster than usual. This is mainly as a result of the implementation of SegWit earlier this year.
Litecoin also uses a different hashing algorithm from Bitcoin. Litecoin uses the Scrypt hashing algorithm which is quite different from that of Bitcon which uses the SHA 256 hashing algorithm. Moreover, people think that Litecoin will not have so many problems as it pertains to a scaling solution.
Dash is another interesting cryptocurrency in that they are also trying to tackle the Bitcoin orthodoxy. They want to make is easy for payments to be made at the micro level with near 0 fees. They have also tried to take on the challenges Bitcoin faces with miners and users.
Dash tries to solve this with a two layered system. This is users can invest some of their Dash and then have the benefit to vote on important projects that the developers can work on. This creates an incentive for those staking the coins to only suggest solutions in the best interest of the network.
Another drive behind dash is that it can be used at point of sale. In order to be able to achieve this, they need super fast transactions. This is done through something called instant X transactions. In some tests, the transactions have completed in a matter of seconds.
Another implementation of Dash that people are really interested in is their “Darksend mixing” algorithm. This will mix the coins that are been sent and hence this will result in transactions hidden to a certain degree. This could help people to anonymise the transactions.
NEO is an interesting Altcoin as it is one of the only blockchain solutions that has been developed in China. It is often times termed the “Chinese Ethereum” yet there is so much more to it. The developers at NEO want to create a smart economy.
NEO, like etheruem, makes use of Smart Contract technology on its blockchain. Other developers can code application to run on the blockchain of NEO. Yet, unlike Ethereum, NEO wants to try and make use of some interesting technology that has not been developed for Ethereum yet.
These include such concepts as sharding. With sharding, processes are run at the same time and hence things are sped up and there are very few delays on the contracts. The NEO virtual machine is also planning to be that much bigger and promising than Ethereums.
You should consider an investment in NEO and you can trade these either with the CFD broker or you can create an account on the exchange.
One of the best tenets in life is with investing, you should never keep all your eggs in one basket. The same can be said for cryptocurrencies. Pinning all of your funds onto one coin in the hope that it could break and make you a great deal of money is fools errands.
Take your time and study the investments that you are buying into. Make sure that they are well split amongst the different types of coins in a reasonable share. By all means keep Bitcoin as your stable , but consider some of the coins like those we have presented above.