Top 5 Cryptocurrencies in the World
I still remember the first time I heard about cryptocurrencies worldwide – it was like a whisper in a dark alley, a secret only a select few knew about. But fast forward to today, and it’s a different story altogether.
With the rise of Bitcoin, Ethereum, and others, the world of cryptocurrency has become a global phenomenon, with millions of people investing, trading, and talking about it. But with so many options, it can be overwhelming to keep track of the top players in the game. That’s why I decided to dig and find out which cryptocurrencies reign supreme.
In this article, I’ll share my top 5 picks – the crème de la crème of cryptocurrencies worldwide.
What Exactly is Cryptocurrency?
Cryptocurrencies are decentralised digital currencies secured by large computer networks. Unlike traditional fiat currencies backed by federal governments and central banks, cryptocurrencies operate independently based on their programming code. Transactions are verified and recorded on a transparent public ledger using blockchain technology.
Cryptocurrencies are private digital currencies offering an alternative means of completing transactions. Investors and enthusiasts see them as a potential hedge against inflation, a store of value during periods of macroeconomic instability, and a means of circumventing the traditional financial industry. Bitcoin and leading cryptocurrencies enable any internet user worldwide to complete financial transactions quickly and easily without relying on a bank or another financial intermediary.
Why Cryptocurrency?
Cryptocurrency has gained popularity among investors globally, and for good reason. With technological involvement and industrialisation, digital currencies are obtaining a satisfactory position over others, for example, Bitcoin. By using Cryptocurrency, it gets easy to transfer money without any involvement of banks and other financial institutions.
Cryptocurrency has gained popularity among investors globally, and for good reason. With technological involvement and industrialisation, digital currencies are obtaining a satisfactory position over others, for example, Bitcoin. By using Cryptocurrency, it gets easy to transfer money without any involvement of banks and other financial institutions.
One of the most significant advantages of cryptocurrency is its ability to provide inflation protection. Due to inflation, the value of many currencies declines, but cryptocurrency safeguards against this. Bitcoin, for example, has a hard cap on the total number of coins that will ever be minted, which means that as the growth of the money supply overtakes the growth in the supply of Bitcoin, the price will increase. Many other cryptocurrencies use the exact mechanism to cap supply and can act as a safeguard against inflation.
Another advantage of cryptocurrency is its fast transactional speed. If you wish to transfer money to your loved ones, cryptocurrency transactions are done in minutes, making it a much quicker option than traditional bank transfers, which can take days. Within U.S. financial institutions, most transactions are settled in three to five days, and wire transfers take at least 24 hours. Cryptocurrency transactions, on the other hand, are settled in real-time, making it a much more efficient option.
Cryptocurrency transactions are also cost-effective. The transactional cost with the help of cryptocurrency can be minimal or zero, eliminating the need for third-party intermediaries like VISA to confirm transactions. It is much cheaper than traditional bank transfers, which can come with hefty fees.
Decentralisation follows in the advantage of cryptocurrency. Cryptocurrencies portray a brand-new decentralisation model for money, helping to combat the monopoly of a currency and free cash from control. No government organisations can set the worthiness of the coin or flow, which crypto enthusiasts believe makes cryptocurrencies secure and safe.
Cryptocurrency can also generate profits and provide diversity in your investment portfolio. The market has extended immensely over the past decade, and there is a limited history of the price activity of the cryptocurrency markets, making them an acceptable source of portfolio diversification. If you combine assets with less price correlation, you can have more stable returns. For example, if your stock collection decreases, your crypto asset might rise and vice versa.
Accessibility is another advantage of cryptocurrency. Investors need a computer or a smartphone with an internet connection to use cryptocurrency. There’s no identification verification, credit check, or background to open a cryptocurrency wallet, making it a much more accessible option than traditional financial institutions.
Cryptocurrency is also safe and secure. No one can access your funds unless they gain access to your crypto wallet’s private key. In case you forget or lose your key, then you cannot recover your funds. Further, the transactions are secured by the blockchain system along with the scattered network of computers that verify the transactions. It’s more secure if investors keep crypto assets in their wallets. The transactions are secured by using public and private keys, proof of work or proof of stake, and other various forms of incentive systems.
Finally, cryptocurrency is transparent. With the decentralised nature of blockchains, one can view the money transfer transactions using Blockchain Explorer on the platform to track live transfers. This open and transparent system is a relief among investors and is corruption-free.
Are Cryptocurrencies Legal?
The legality of cryptocurrencies varies by country and jurisdiction and is constantly evolving.
Below are some examples of how different countries treat cryptocurrencies:
1.United States: Cryptocurrencies are legal, but regulatory frameworks are still being developed. The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have issued guidance on treating cryptocurrencies as securities or commodities. Some states, like New York, have introduced specific licensing requirements for cryptocurrency businesses.
2.Canada: Cryptocurrencies are legal, and Canada has been proactive in regulating them. The Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) have issued guidance on treating cryptocurrencies as securities.
3.United Kingdom: Crypto assets are regulated financial instruments, and there are specific reporting requirements. The Financial Conduct Authority (FCA) has issued guidance on treating cryptocurrencies as securities.
4.Japan: Cryptocurrencies are legal property, and exchanges must register with the Financial Services Agency (FSA). Japan has been at the forefront of cryptocurrency regulation, introducing a licensing system for exchanges in 2017.
5.Australia: Cryptocurrencies are legal property, and exchanges must register with the Australian Transaction Reports and Analysis Centre (AUSTRAC). The Australian Securities and Investments Commission (ASIC) has issued guidance on treating cryptocurrencies as securities.
6.Singapore: Cryptocurrencies are legal but not considered legal tender. Exchanges must be registered with the Monetary Authority of Singapore (MAS). Singapore has been actively promoting itself as a hub for cryptocurrency and blockchain innovation.
7.India: Cryptocurrencies are legal, but there is a 30% tax on investments and a 1% tax deduction at source on trades. The Reserve Bank of India (RBI) has banned banks from dealing with cryptocurrency businesses, but this ban has been challenged in court.
8.Brazil: Cryptocurrencies are legal, and a law was passed in 2022 legalising them as a payment method. The Brazilian Securities Commission (CVM) has issued guidance on treating cryptocurrencies as securities.
9.European Union: Cryptocurrencies are legal throughout most of the EU, but exchange governance depends on individual member states. The EU has introduced the 5th Anti-Money Laundering Directive (5AMLD), which requires cryptocurrency exchanges to implement anti-money laundering (AML) and know-your-customer (KYC) measures.
10.China: Cryptocurrencies are legal, but there is a ban on initial coin offerings (ICOs) and cryptocurrency exchanges. The People’s Bank of China (PBOC) has been exploring the development of a central bank digital currency (CBDC).
11.Russia: Cryptocurrencies are legal, but there are strict regulations and a ban on cryptocurrency payments. The Russian government has been exploring the development of a CBDC.
12.South Africa: Cryptocurrencies are legal, and the South African Revenue Service (SARS) has issued guidance on the tax treatment of cryptocurrencies.
13.Switzerland: Cryptocurrencies are legal, and the Swiss Financial Market Supervisory Authority (FINMA) has issued guidance on treating cryptocurrencies as securities.
14.United Arab Emirates: Cryptocurrencies are legal, and the Dubai Financial Services Authority (DFSA) has issued guidance on treating cryptocurrencies as securities.
Are Cryptocurrencies Disadvantageous?
Cryptocurrencies have several significant disadvantages that investors must carefully consider. These disadvantages include a lack of true anonymity, which means that transactions may not be as private as users think. Additionally, there is a risk of 51% attacks, which can compromise the integrity of transactions and undermine trust in the system.
Furthermore, the energy consumption required to mine and maintain cryptocurrencies has a substantial environmental impact. Moreover, the lack of refund or cancellation policies can lead to financial losses, and regulatory uncertainty can result in legal and economic risks. Security risks such as hacking and theft are also a concern, and price volatility can lead to significant financial losses.
These factors can profoundly impact the viability and sustainability of cryptocurrency investments.
Top 5 Cryptocurrencies in the World
To cut the long chase, below are the five top five cryptocurrencies worldwide.
●Bitcoin (BTC)
●Ethereum (ETH)
●Tether (USDT)
●Binance Coin (BNB)
●Solana (SOL
Bitcoin (BTC)
Bitcoin, created in 2009 by Satoshi Nakamoto, is the first and most valuable cryptocurrency. It uses a decentralised, blockchain-based ledger to record transactions across a network of computers. The proof-of-work consensus mechanism ensures the security and integrity of transactions.
In May 2016, one bitcoin was worth approximately $500. As of May 7, 2024, its value has surged to around $63,540, representing a remarkable growth of 12,608%.
Bitcoin’s decentralised and transparent nature has transformed how people think about digital security. While it faces criticism for its energy-intensive consensus mechanism and scalability limitations, it remains the most popular and valuable cryptocurrency, inspiring new projects and innovations.
Ethereum (ETH)
Ethereum (ETH) is a cryptocurrency and blockchain platform that has gained popularity among developers due to its various applications, including smart contracts and non-fungible tokens (NFTs). Launched in July 2015, Ethereum was one of the first altcoins and is now the most valuable cryptocurrency after Bitcoin.
Ethereum’s price has surged from $11 in April 2016 to around $3,072 in May 2024, representing a remarkable growth of 27,829%. Its blockchain hosts over 1,400 applications and developer tools, making it a leading platform for decentralised applications (dApps). In 2023, Ethereum transitioned from a proof-of-work to a proof-of-stake consensus mechanism, significantly reducing its energy consumption and making it a more environmentally friendly investment option.
Tether (USDT)
Tether (USDT) is a stablecoin with a market capitalisation of $111.0 billion and a year-over-year return of 0%. Unlike other cryptocurrencies, Tether is backed by fiat currencies such as the US dollar and Euro, aiming to maintain a stable value equivalent to one of these denominations.
This theoretically reduces its volatility, making it attractive to investors seeking a more stable store of value. Tether’s value is pegged to the US dollar, with each USDT token intended to represent $1. This stability has made Tether a popular choice for investors looking to mitigate the risks associated with more volatile cryptocurrencies.
Binance Coin (BNB)
Binance Coin (BNB) is the native cryptocurrency of the Binance exchange, one of the world’s largest crypto exchanges. Launched in 2017, BNB has evolved beyond facilitating trades on Binance’s platform to enable trading, payment processing, and booking travel arrangements. It can also be exchanged for other cryptocurrencies like Ethereum or Bitcoin.
Since its inception, BNB’s value has skyrocketed from $0.10 in 2017 to around $592 in May 2024, representing a remarkable gain of 591,883%. With a market capitalisation of $84.9 billion and a year-over-year return of 87%, BNB has become a prominent cryptocurrency. Despite Binance’s recent legal issues with the US Securities and Exchange Commission, BNB remains a widely used and valuable cryptocurrency.
Solana (SOL)
Solana (SOL) is a cryptocurrency designed to support decentralised finance (DeFi), decentralised apps (DApps), and smart contracts. Its unique hybrid proof-of-stake and proof-of-history mechanisms enable fast and secure transaction processing. SOL, the native token, powers the platform.
Since its launch in March 2020, Solana’s value has surged from $0.77 to around $154.97 in May 2024, representing a remarkable gain of 20,026%. With a market capitalisation of $73.0 billion and a year-over-year return of 685%, Solana has become a prominent player in the cryptocurrency market. Despite experiencing network outages, Solana’s performance has been boosted by the XRP court ruling, making it the best-performing crypto on this list.
Others include:
1.U.S. Dollar Coin (USDC)
2.XRP (XRP)
3.Toncoin (TON)
4.Dogecoin (DOGE)
5.Cardano (ADA)
6.Shiba Inu (SHIB)
7.Avalanche (AVAX)
How Does Cryptocurrency Work?
Cryptocurrencies are digital currencies utilising blockchain technology, enabling secure and decentralised transactions. This technology allows for “trustless” transactions, meaning that there is no central authority overseeing or regulating the transactions on a cryptocurrency’s blockchain, providing a decentralised and autonomous way to conduct financial transactions.
Conclusion
Cryptocurrency has taken a solid position in the market today. And the top 5 players by market capitalisation are spearheading the charge. Bitcoin, Ethereum, Tether, Binance Coin, and Solana have showcased remarkable resilience, innovation, and growth, redefining the contours of decentralised finance and blockchain technology.
Each cryptocurrency boasts unique strengths, advantages, and use cases, catering to diverse needs and preferences. Whether you’re a seasoned investor or a newcomer to the crypto space, understanding these leading players can empower you to make informed decisions and stay ahead of the curve.
Good luck!