For first-time investors in the virtual market, there’s a lot to learn. But before anything else, we suggest that you at the very least know about the four major cryptocurrencies we use and their differences. Below you’ll find an overview of each one.
1. Bitcoin (BTC)
Estimated to have a market cap over ~135B AUD, Bitcoin is the first and most well-known cryptocurrency on the virtual market. Bitcoin is what really drove investors to go into crypto currency market. Transactions reach up to 350,000 on busy days. However, the market is set to have a limit of only 21 million coins.
This seems concerning at first until you realize that you don’t have to sell a whole coin each time you place a market order. You could buy or sell a fourth, a hundredth, or even a hundred-millionth of a coin, so there’s no real end potential for the current market.
2. Litecoin (LTC)
Litecoin is a derivation of the Bitcoin meant to improve the transaction speed. What this means is that Bitcoin transactions take up to 10 to 15 minutes to confirm due to all the calculations needed behind each one. Litecoin cuts the transaction time down to 2-3 minutes by reducing the necessary calculations behind the scenes, which makes it more efficient to pay-as-you-go.
However, Litecoin still has reached the fame and stardom of the Bitcoin with a current market cap estimated at 4B AUD. It’s still larger than many of the other cryptocurrencies in the world, but comes in last among the top four.
3. Ethereum (ETH)
Ethereum comes second out of all the current cryptocurrencies on the market with a market cap of over 38B AUD. Unlike Bitcoin, Ethereum is added to the market each year which means that there is no hard upper limit to the amount of Ethereum being bought and sold. This makes it a high competitor to its cryptocurrency cousin.
And unlike the Litecoin, Ethereum transactions are vastly improved at only 10-15 seconds. It’s still not as fast as today’s credit cards, but it is getting closer.
4. Ripple (XRP)
And finally, Ripple is the black sheep of the group. It doesn’t operate under a public ledger like the other three and instead utilizes an “iterative consensus process.” This processes behind-the-scenes calculations much faster than the other three—making transactions only a few seconds long.
Ripple also sits along on its own exchange with a market cap at about 10B AUD. This is definitely the most unique of the top four today.
The Number of Cryptocurrencies Don’t Stop There
Though you’re more likely to run into Bitcoin, Litecoin, Ethereum and Ripple on most virtual marketplaces, there are still far more out there to be discovered. Be sure to do your research on each of them so you can be fully informed before stepping into the online exchange.