Cryptocurrencies are all the rage lately, and you can learn how to trade them here. Recently, cryptocurrencies like Bitcoin, Ethereum, Litecoin, and others have experienced substantial price increases. Some investors have made fortunes, and others lost money when the prices crashed. If you’re considering investing in cryptocurrencies, you must do your research and create investment strategies first. Not all coins are made equal, and not everyone is suitable for mining.
This article will examine five cryptocurrencies that you can mine right now. It’ll also give pointers on how to get started with mining these currencies.
Bitcoin is a cryptocurrency and a payment network created by Satoshi Nakamoto. Cryptography is used to keep track of transactions recorded in a public blockchain known as the blockchain. Bitcoin is one of a kind in that it has an established quantity: 21 million. Bitcoin also has no central bank and operates on a peer-to-peer network. These characteristics make Bitcoin transactions irreversible, transparent and immutable.
The advantage of bitcoin is that it can be sent anywhere in the world almost instantly, for meagre fees. Therefore, Bitcoin can buy goods and services online and in physical stores.
However, bitcoins are not regulated by any government or financial institution, which makes them vulnerable to theft and fraud. Despite these risks, more and more businesses are beginning to accept bitcoin as payment, including major retailers such as Overstock and Expedia.
Overall, bitcoin offers an innovative way to send and receive payments; however, users should be aware of the risks associated with this crypto.
Ethereum is a decentralised platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third-party interference. The Ethereum protocol and blockchain have a price for each operation. So-called “miners maintain the general ledger”. These miners are rewarded with transaction fees and newly created Ethereum.
By design, Ethereum reduces the risk of fraud and third-party interference. This results in censorship-resistant applications which are incredibly difficult to shut down. For example, an application on Ethereum could be used to run a DAO (decentralised autonomous organisation). No one would be able to shut down this DAO unless they had control over more than 50% of the network. Because of this, it is practically impossible for anyone to alter or ban the actions of a DAO.
The Ethereum protocol itself is also censorship resistant, meaning that no government or other entity can prevent individuals from using Ethereum or developing applications on top of it.
Like Bitcoin, Litecoin is a decentralised, peer-to-peer digital currency. However, there are a few key distinctions between the two:
- Litecoin is faster than Bitcoin. Transactions on the Litecoin network are confirmed more quickly, which can be helpful for merchants who need to process payments quickly.
- Unlike Bitcoin, Litecoin employs a different mining algorithm. This means miners specialising in mining Bitcoin cannot also mine Litecoin. As a result, the Litecoin network is less centralised than Bitcoin’s.
- Litecoin has a higher total supply than Bitcoin.
There will be 21 million Bitcoins and 84 million Litecoins in existence. These characteristics make Litecoin an attractive option for investors and users looking for an alternative to Bitcoin.
Monero is a cryptocurrency that was created with the specific aim of providing anonymous transactions. Unlike other cryptocurrencies, such as Bitcoin, which provide anonymity by using pseudonymous addresses, Monero goes further by obscuring all transactions’ source and destination.
In addition, Monero uses a unique technique called ring signatures to make it impossible to identify the sender of a particular transaction. As a result, Monero is considered to be one of the most private and secure cryptocurrencies currently in existence. While this anonymity comes at the cost of slower transaction speed and more considerable transaction fees, the benefits outweigh the drawbacks for many users.
Zcash is a digital currency that offers privacy and selective transparency of transactions. Zcash is based on peer-to-peer technology and uses cryptography to provide enhanced privacy for its users.
Unlike most cryptocurrencies, Zcash transactions can be shielded to hide the blockchain’s sender, recipient, and value of all transactions. Private transactions are verified byZero-Knowledge proofs. Zcash also allows users to send public payments, which function like Bitcoin transactions and can be seen by anyone.
Zcash aims to increase user privacy, and it does so by using a unique decentralised and open-source technology known as Zerocoin. This protocol was developed by researchers from Johns Hopkins University and MIT.
When a user makes a transaction, their data is encoded and broken into pieces called “shards.” These shards are then spread out among a network of computers, each containing only a tiny piece of the original data. The data cannot be reconstructed without the shards, and no individual computer has enough information to identify the sender or receiver of the transaction. In this way, Zcash provides increased privacy for its users without sacrificing the security or fungibility of their transactions.
The bottom line
Cryptocurrencies, in particular bitcoin and Ethereum, are a novel way to conduct secure, quick, and cheap transactions. Bitcoin was the first cryptocurrency to hit the market, but there are now many others to choose from. This article reviewed the top five cryptos you can mine, if you’d like to know more about trading cryptocurrency you can check on Saxo.