Whether you’re a veteran or just getting started with investing, one of the golden rules you should know as an investor is to diversify your portfolio and never invest too heavily in one asset. Fortunately, with cryptocurrency investing, there are several options you can choose from in terms of digital currencies.
If you already started with Bitcoin and Ethereum, which are the most noteworthy cryptocurrencies these days, do note that there are other coins you can take into consideration for your current cryptocurrency stack. So, if you’re planning to buy cryptocurrency and update your stack, below are some of the coins you can include in your portfolio:
1. Dogecoin
It’s now one of the most renowned cryptocurrencies and features the Shiba Inu dog’s face from the Doge meme. Thanks to the tweets of Mark Cuban and Elon Musk, Dogecoin has increased its value in April 2021.
Dogecoin, like other coins, is open-source and runs on a decentralized peer-to-peer (P2P) network, which uses a consensus algorithm. Written in C++ language, it’s frequently used to tip online users who share or create content online.
2. Tether (USDT)
The price of Tether is USD$1 per coin, which is why it’s known as a stablecoin. The stablecoin is tied to the value of a certain asset, which is the US dollar.
Often, Tether serves as a medium when the traders move from a digital currency to another. Instead of moving back to dollars, most traders use Tether.
3. XRP
If you believe that it’s a good time to buy another cryptocurrency, a great addition to your cryptocurrency stack is XRP, which is a decentralized blockchain, open-source, and permissionless. Most RippleNet customers use XRP to fund any cross-border transaction. Developers, on the other hand, use XRP for eCommerce, micropayments, and other P2P services.
Compared to Bitcoin transactions with expensive transaction costs and take a few minutes to complete, XRP transactions are low cost and may take within a few seconds. In addition, XRP is pre-mined, which means that there’s a finite amount of it being released into the market gradually.
4. Bitcoin Cash (BCH)
BCH is another known P2P digital currency that can be used for cross-border transactions at a low cost. One of the primary benefits of investing in BCH is that transactions can be made without middlemen and central banks.
Created as a fork of Bitcoin in 2017, it helps improve the scalability of Bitcoin to enable more transactions to be processed in one block. The goal was to let BCH serve as a medium for daily transactions. But many investors became interested in it and are now considered as one of the popular cryptocurrencies in the market.
5. Chainlink
Founded in 2017 by Sergey Nazarove, Chainlink is a digital currency and oracle network, which provides real data to the blockchain. It’s also one of the major data sources to feed helpful information to various decentralized finance applications.
The decentralized oracle network of Chainlink provides tamper-proof outputs and inputs for complex smart contracts on a blockchain. At present, Chainlink is considered one of the most valuable cryptocurrencies. It uses third-party data in a smart contract. On Ethereum, a smart contract responds to some asset rates and global events.
6. Cardano (ADA)
Cardano is like Ethereum, which is a decentralized blockchain platform that enables secure P2P transactions. Founded by Charles Hoskinson in 2015, the co-founder of Ethereum, Cardano is designed to use the energy demanded by Ethereum and Bitcoin. It works through the use of the proof-of-stake protocol, which is the famous way for blockchains to validate a transaction for security purposes.
7. Litecoin (LTC)
Launched in 2011, Litecoin was one of the first digital currencies to follow the footsteps of Bitcoin. It uses scrypt that you can decode using consumer-grade central processing units (CPUs).
Even if Litecoin is similar to Bitcoin in various ways, what makes it different is that it has a quicker block generation rate and provides a quicker transaction confirmation time. Aside from developers, there are many merchants that are accepting Litecoin and are now the sixth biggest digital currency in the world.
8. Stellar (XLM)
Popularly known as XLM, Stellar’s Lumens was developed to serve a niche need within the crypto market. It works like the crypto world’s PayPal, which serves as a bridge between blockchain networks and banks. As a decentralized network, XLM converts currencies and trades them across channels. This is why its transactions are faster and cheaper than a traditional bank.
9. Polkadot (DOT)
Developed by Gavin Wood, Polkadot is a proof-of-stake digital currency aimed to deliver interoperability among various blockchains. Its protocol is made to connect permission-less and permissioned blockchains to enable systems to work under one roof. For specific-use cases, Polkadot also uses parallel blockchains with their native tokens.
What Are The Things You Should Consider When Buying Cryptocurrencies?
As you decide what coins to add to your cryptocurrency stack, make sure to consider the following to make a well-informed decision:
- Pick The Best Crypto Exchange Platform
If you want to diversify your crypto portfolio by investing in more digital currencies, you should consider using a crypto exchange platform that offers your preferred cryptocurrencies. Keep in mind that not all crypto exchange platforms are the same–some may only provide a few coins options. This being said, if you want to keep all your assets on one platform, choose a crypto platform that allows you to buy several coins.
- Security
As a cryptocurrency investor, you have to ensure that your investment is secure. This is important since several new crypto players have had serious issues with security. If you don’t want to deal with such problems, go with platforms or digital currency wallets that offer better security.
- Cost
Another thing to consider when buying cryptocurrencies is the cost. Take note that commissions may vary widely. Some platforms may charge you a few percent to purchase cryptocurrencies directly. This few percent may not be a big deal for some investors, but it may eat away all your profits if you decide to trade often.
Final Thoughts
Cryptocurrencies are no doubt a good investment for everyone. With the number of coins you can add to your cryptocurrency stack, you can be sure that you’ll have various options to choose from when you decide to invest more.
To get the most out of your investment in cryptocurrency, make sure to continue learning about the market. As a crypto investor, the wisest thing you should do is to stay updated about the market happenings and cryptocurrency trends.
