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Cryptocurrencies are a highly volatile asset class, and while they may present opportunities for astute investors, they remain a regulatory grey area and thus an arena for scams and hackers.
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Nevertheless, Australians are crypto-curious. According to consumer group CHOICE, almost one in five Aussies are either involved in some form of cryptocurrency trading or are interested in getting involved. Those who steer clear from crypto often do so because of the risk of crypto scams. Some 4.6 million Australians own cryptocurrency, and Australia ranks third in the world for crypto uptake.
From Bitcoin and Ethereum to Dogecoin and Tether, there are thousands of different cryptocurrencies, each with different strengths, weaknesses and varying degrees of potential.
These are the top 10 cryptocurrencies based on their market capitalisation or the total value of all the coins currently in circulation. This is not a recommendation of what you should or should not buy; it is merely a list of the largest projects ranked by market capitalisation so you can get a sense of the playing field before you decide whether to roll the dice and invest in crypto.
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What Are Cryptocurrencies?
A cryptocurrency is a digital asset that can circulate without the centralised authority of a bank or government. According to CoinMarketCap, there are more than two million cryptocurrency projects out there that represent the entire $US1.76 trillion crypto market.
1. Bitcoin (BTC)
- Market cap: $US896 billion
Created in 2009 by Satoshi Nakamoto, Bitcoin (BTC) is the original cryptocurrency. As with most cryptocurrencies, BTC runs on a decentralised blockchain technology, which is a ledger logging transactions distributed across a network of thousands of computers. Because additions to the distributed ledgers must be verified by solving a cryptographic puzzle, a process called proof of work, Bitcoin is kept secure and safe from fraudsters.
Bitcoin’s price has skyrocketed as it’s become a household name. In May 2016, you could buy one Bitcoin for about $US500. As of January 2, 2024, a single Bitcoin’s price was around $US45,800. That’s a growth of more than 9,060%.
Related: How To Buy Bitcoin
2. Ethereum (ETH)
- Market cap: $US290 billion
Both a cryptocurrency and a blockchain platform, Ethereum is a favourite of program developers because of its potential applications, like so-called smart contracts that automatically execute when conditions are met and non-fungible tokens (NFTs).
Ethereum has also experienced tremendous growth. From April 2016 to the January 2024, its price went from about $US11 to around $US2,416, increasing around 21,863%.
Related: How To Buy Ethereum
3. Tether (USDT)
- Market cap: $US92 billion
Unlike some other forms of cryptocurrency, Tether (USDT) is a stablecoin pegged to the value of US$1. This is achieved by having a 1-1 backing between the token and USD which hypothetically keeps a value equal to one of those denominations because one token should always be able to be redeemed for one dollar. In theory, this means Tether’s value is supposed to be more consistent than other cryptocurrencies, and it’s favoured by investors who are wary of the extreme volatility of other coins.
4. Solana (SOL)
- Market cap: $US50 billion
Solana is a high-performance blockchain platform designed to provide fast and scalable transaction processing. It utilises a unique consensus algorithm called Proof of History, which allows it to process up to 65,000 transactions per second, making it one of the fastest blockchain networks available today. The platform supports smart contracts and decentralised applications (dApps) and is extremely popular for NFT trading.
The native token of the Solana platform is called SOL, and is used for paying transaction fees, staking, and participating in governance decisions on the network. The ICO price for SOL was $US0.22, and as of January 2, 2024, now sits at $US116, an increase of 52,627%.
5. Binance Coin (BNB)
- Market cap: $US48.5 billion
Binance Coin (BNB) is a form of cryptocurrency that you can use to trade and pay fees on Binance, one of the largest crypto exchanges in the world. Since its launch in 2017, Binance Coin has expanded past merely facilitating trades on Binance’s exchange platform. Now, it can be used for trading, payment processing or even booking travel arrangements. It can also be traded or exchanged for other forms of cryptocurrency, such as Ethereum or Bitcoin.
BNB’s price in 2017 was just $0.10. By January 2, 2024, its price had risen to around $US319, a gain of approximately 318,900%.
Related: Cryptocurrency Glossary Of Terms
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6. XRP (XRP)
- Market cap: $US34.5 billion
Created by some of the same founders as Ripple, a digital technology and payment processing company, XRP can be used on that network to facilitate exchanges of different currency types, including fiat currencies and other major cryptocurrencies.
At the beginning of 2017, the price of XRP was $US0.006. As of the start of January 2024, its price reached $US0.638, equal to a rise of 10,533%.
7. U.S. Dollar Coin (USDC)
- Market cap: $US24.7 billion
Like Tether, USD Coin (USDC) is a stablecoin, meaning it’s backed by US dollars and aims for a 1 USD to 1 USDC ratio. USDC is available on numerous blockchains, such as Ethereum and Solana, and you can use USD Coin to complete global transactions.
8. Cardano (ADA)
- Market cap: $US22.3 billion
Somewhat later to the crypto scene, Cardano (ADA) is notable for its early embrace of proof-of-stake validation. This method expedites transaction time and decreases energy usage and environmental impact by removing the competitive, problem-solving aspect of transaction verification in platforms like Bitcoin. Cardano also works like Ethereum to enable smart contracts and decentralised applications, which ADA, its native coin, powers.
Cardano’s ADA token has had relatively modest growth compared to other major crypto coins. In 2017, ADA’s price was $0.02. As of January 3, 2024, its price was at $0.63. This is an increase of 3,050%.
9. Avalanche (AVAX)
- Market cap: $15.8 billion
Avalanche is a high-speed blockchain platform for decentralised apps (dApps) and custom networks. The project’s goal is to surpass Ethereum in smart contract popularity. With the ability to handle up to 6,500 transactions per second, it can handle significantly more throughput than Ethereum due to it’s unique structure, which features three specialised blockchains. These chains, which are known as the X-Chain, C-Chain and P-Chain, are designed to handle different tasks, unlike the one-size-fits-all approach of Bitcoin and Ethereum.
Since its 2020 launch, Avalanche has been expanding its ecosystem with DApps and DeFi projects, including partnerships with Ethereum-based projects like SushiSwap and TrueUSD, and enhancing its connection with other blockchains through bridge developments.
From its initial ICO price of $0.5, AVAX stands at US$43.16 as of January 2nd 2024, up over 8,532%.
10. Dogecoin (DOGE)
- Market cap: $US13.3 billion
Dogecoin was famously started as a joke in 2013 but rapidly evolved into a prominent cryptocurrency thanks to a dedicated community and creative memes. Unlike many other cryptos, there is no limit on the number of Dogecoins that can be created, which leaves the currency susceptible to devaluation as supply increases.
Dogecoin’s price in 2017 was $0.0002. By the start of January 2024, its price sat at $0.093, up 46,400%.
*Market caps and pricing sourced from coinmarketcap.com, current as of January 2024
This article is not an endorsement of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency or CFDs as an investment class. Cryptocurrency is unregulated in Australia and your capital is at risk. Trading in contracts for difference (CFDs) is riskier than conventional share trading, not suitable for the majority of investors, and includes the potential for partial or total loss of capital. You should always consider whether you can afford to lose your money before deciding to trade in CFDs or cryptocurrency, and seek advice from an authorised financial advisor.
Frequently Asked Questions (FAQs)
What are cryptocurrencies?
Cryptocurrency is a form of currency that exists solely in digital form. Cryptocurrency can be used to pay for purchases online without going through an intermediary, such as a bank, or it can be held as an investment.
Do you have to pay taxes on cryptocurrency?
If you buy and sell coins, paying attention to cryptocurrency tax rules is important. Cryptocurrency is treated as a capital asset, like stocks, rather than cash, which means that you need to pay your marginal tax rates on the…
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This article was originally published by a www.forbes.com . Read the Original article here. .
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