Cryptocurrency Analysis; That’s One Hot Market
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It is the dawn of a new age and early adopters are being rewarded. Bitcoin has increased more than 1900% since the start of 2017 and it is only expected to go higher.
The best cryptocurrency to invest in for 2018 is Bitcoin, the first and most widely used token, but there are many others with equally bullish prospects. The top cryptocurrency exchanges all support BTC, your gateway to the world of digitized financial exchange.
Some cryptocurrency analysis suggests Bitcoin could replace gold as a hedge against inflation and safe haven asset. Bitcoin’s $292 billion market cap is equal to 3.8% of the world gold market. If Bitcoin is to rival gold as an asset class prices have a long way to go before they peak.
Bitcoins were made to be hoarded, that’s what some opponents to the coin will say. Hoarding is what your Grandparents called saving, the idea that if you hold on to your money it will grow in value. This is a deflationary characteristic central banks like to avoid, they deal in fiat money and fiat money is made for spending. The endless quest for economic growth and the goal of long running inflation means your dollars, euros, yen and pesos will all be worth less next year than they are today.
Why are the early adopters being rewarded so richly? Because they are providing liquidity and legitimacy for a new and untried technology. Is there risk? Heck yes but that doesn’t mean cryptocurrency is a scam, a fraud or a bubble. Where there is risk there is reward and top cryptocurrency exchanges are seeing an astronomical increase in new accounts because of it.
Bitcoin, Blockchain and Distributed Ledger
Bitcoin, Blockchain and distributed ledger are all the same thing, right? Cryptocurrency? Not exactly.
Bitcoin is a blockchain the same way Bourbon is a whiskey; not all blockchains are Bitcoin and not all whiskey is Bourbon. Blockchain is a technology based on the distributed ledger concept. Bitcoin is an expression of that technology, an application if you will.
Imagine a business. This business keeps records but only audits the books 4 times a year, once per quarter. This system has worked for them a long time but is slow, cumbersome and filled with opportunities for mistakes and fraud.
Now imagine if that business submitted its records at the end of each day. The books are submitted to a community of third party operators, available for public scrutiny and must be verified by the community in order to be validated. Less chances for fraud, right?
To make the system even more secure each block’s transactions have to be verified independently and accepted by a majority of nodes in the network to be considered valid. It only takes one negative response to invalidate the entire block.
That means the books, the blockchain, are always 100% accurate and up to date. That’s the power of blockchain. I know it doesn’t sound like much but once you’ve had time to think about how it can be applied in daily life we think you’ll be as excited about it as we are.
How Bitcoin Works, The Basics Of The Blockchain
Bitcoin is a decentralized distributed ledger that keeps track of value. Users deposit money into exchanges and then records that value in the form of Bitcoin. The Bitcoins themselves are simply tokens used to track and record transactions, they don’t exist anywhere except on the blockchain and in the accounts of the people who hold them.
Bitcoin is decentralized because there is no “headquarters” or primary server operating the system. The system is run by a community and full of redundancy, if any one of the nodes were to perish the others would easily and willingly fill the void.
The network includes any device capable of mining, sending, receiving or storing a Bitcoin. When a BTC is sent from one wallet to the next the transaction is recorded on the blockchain. All the transactions that occur within a specified window of are included in the “block”. The progression of blocks is the chain, the blockchain.
The block is like a box of checks. The blockchain is all the blocks previous to and leading up to the current one. When a block is closed it gets audited and verified by the miners and added to the chain. This means that every Bitcoin can be accounted for at all times, transaction by transaction, all the way back to the point at which the token was mined.
Mining Bitcoin, The Miners, The Service, The Reward,
Mining Bitcoin and the Bitcoin miners are how the system works. The miners are the operators who receive, verify and distribute the ledger for public consumption. They do it as a service for the community but they don’t do it for free, they do it in order to “find” or “mine” new Bitcoins.
Finding Bitcoins isn’t easy, it’s very hard in fact and that was done on purpose to keep the number of miners under control; if there are too many miners and it is too easy to find new tokens there will be too many of both and their value will decline.
There are a finite number of Bitcoins programmed into the system and a progressive scale that makes it harder to find them as time goes by. This creates scarcity in the market and is a naturally deflationary fundamental fact of BTC. It is also one reason why the price keeps going up.
There are only so many Bitcoin in existence, and only so many more will be made, if you want to buy one you have to buy it from someone who owns one or mine it yourself.
What Miners Do; Exchanging Electricity For BTC
Mining Bitcoin isn’t easy and that’s a fact. It takes a lot of very powerful computers using cutting edge graphics microchips to do it. These computers cost a lot of money and use a lot electricity to operate. Not only that, they create a lot of heat and need to be kept cool in order to function. That costs a lot more money and does include the cost of the office space required to house the equipment.
When you boil it down the miners are using their computers to perform alchemy. They are using electricity to convert money into newly minted Bitcoins. Most of the top cryptocurrency exchanges are large scale miners, or used to be, and began offering exchange services when they had a sufficient hoard of tokens.
The downside to mining is that there is no guarantee a miner will find a Bitcoin. If it was as simple as hooking up a mining rig then they would call it making Bitcoins, not finding. The reason is because it’s a race to find each new coin. You have to be the first miner to solve a very complex mathematical puzzle, each puzzle is a complex algorithm unique to each block. The answer unlocks the block in a way that allows it to be verified, first to verify is awarded the new tokens once the community verifies and validates.
The Top Cryptocurrency Exchanges, Wallets And Cold Storage
When you buy on an exchange you are not technically buying you are exchanging your fiat currency for an equal value of cryptocurrency.
There are many top cryptocurrency exchanges, each come with unique qualities. The largest legally operating in North America is Coinbase although there are others. Coinbase allows clients to buy, hold and store the four top cryptocurrencies; Bitcoin, Bitcoin Cash, Ethereum and Litecoin. It is an online based platform that does not require any downloads to your computer.
Most of the top cryptocurrency exchanges will support Bitcoin and Ethereum but very few support them all. Some tokens, especially the very new or less well known, may only be available at a single exchange or directly from the issuer. Learn More about Coinbase here.
The Gemini Exchange is another of the top cryptocurrency exchanges in North America. It is owned by the Winklevoss twins and a registered, regulated NY financial institution. It facilitates the exchange of US dollars to Bitcoin and Ethereum, and Bitcoin and Ethereum with each other.
A problem with the exchanges is that not all will accept fiat currency. Some are strictly intended for the purpose of buying, selling and trading cryptocurrency with cryptocurrency. That means to use them investors are required to join an exchange that will process fiat money, buy Bitcoin or Ethereum and then send it to the exchange they really want to trade on.
Yet another issue with the exchanges is that they are not a secure place to store cryptocurrencies once you have bought them. Cryptocurrency exchanges are storehouses of money and attract a lot of unwanted attention. They offer the best security they can give but let’s face it, this is the Internet we’re talking about. If someone wants to hack into your account they will find a way. Hackers have already broken into a number of top cryptocurrency exchanges and pilfered money from them all.
You can avoid this by using a wallet and storing your tokens offline. Think about this, the token is known to the blockchain with a private serial identification key. The way you own a cryptocurrency is to control the key. If you keep your tokens at the exchange your key is controlled by them, held on their servers and share the same risk. If you keep your tokens in a wallet the keys are stored locally, on your device, and exposed to much less risk.
The Exodus Wallet is an offline wallet and exchange that does two things. It provides wallet services for dozens of top traded cryptocurrencies and connects to the Shapeshift exchange for easy token to token trading. The best part is that all of your private keys are stored locally in a dedicated file and encrypted for added security.
The Best Cryptocurrency To Invest In For 2018
The best cryptocurrency to invest in for 2018 is just about any token on the list, assuming of course they are not a scam. That being said there are a number of tokens that are set to outperform in 2018 and the number one is Bitcoin itself.
The addition of BTC futures contracts to the Cboe and CME are only one example of Bitcoins growing acceptance, as it spreads through society it will continue to rise in value. Estimates vary but supporters generally agree Bitcoin’s market cap could easily double by the end of 2018 and continue rising from there. One cryptocurrency analysis tool suggests the token could be worth $200,000 in the foreseeable future.
Best cryptocurrency to invest in for 2018: Ethereum is another great option
Best cryptocurrency to invest in for 2018For those looking to the next big thing in blockchain Ethereum is the next best cryptocurrency to invest in for 2018. Where Bitcoin is a touch tone phone capable of dialing up a wallet and sending value, Ethereum is a smart phone capable of logging and executing “smart contracts”.
The Ethereum network operates as a currency like Bitcoin and it can be harnessed by business, government or organization to create new blockchain based technologies. Trading near $850 Ether is worth less than 5% of Bitcoins value (when trading near $18,000) and a likely candidate for explosive growth moving forward.
There are some risks with Ethereum and they could cap gains in both the near and long terms. The first is growing pains. Ethereum is a hot technology and it is growing fast. There is an urgent need to advance the technology but those advancements are slow coming.
The second is that there are an unlimited number of Ether; the miners will keep making more so long as the network is in use. There were recently a reported 16.75 million Bitcoins compared to an enormous 96.5 million Ethers. Even if the Ethereum network had a market cap equal to Bitcoin’s it would trade a much lower price due to dilution. Regardless, Ethereum is extremely undervalued and should be trading with at least a $1,000 handle if not higher.
Best cryptocurrency to invest in for 2018: Litecoin could be a great choice
Litecoin is another undervalued token and on the list of best cryptocurrency to invest in for 2018. It is the original Bitcoin hardfork and cousin to both Bitcoin Cash and Bitcoin Gold. It was launched in 2011 in an effort to “lighten up” the Bitcoin blockchain. It addresses issues that still plague classic Bitcoin today including transaction time and system efficiency. A commonly used cryptocurrency analysis tool suggests it could double over the next few months.
Three things Litecoin has going for it are 1) it as a well established network intended to streamline the consumer/merchant aspect of cryptocurrency 2) it has a faster and more efficient transaction times than the original Bitcoin and 3) it is undervalued relative to both Bitcoin and Bitcoin Cash. At $350 Litecoin is trading at less than 15% of Bitcion Cash (hitting new all time highs as I write this) and less than 2% of Bitcoin which leaves quite a bit of meat on the bone. The only downside is that there are about 54.5 million Litecoins in existence, a number that could dilute value over the longer term.
Omisego is an Ethereum based blockchain application using the token OMG, it is also on our list of best cryptocurrency to invest in for 2018. The network is designed to facilitate cross border payments, remittances and other financial transactions in the greater Asia region. It is the largest and most noteworthy of the ICO’s, having started the trend, and is the most valuable.
The token recently broke out of a long term consolidation range, in tandem with the broader cryptocurrency market, and is setting new all time highs. Price is supported by an expectation the network could go live at any momentu, an event likely to drive the token even higher.
Should You Invest In Bitcoin?
Our cryptocurrency analysis shows a market in the very earliest stages of its development. It is growing fast and will soon dominate global financial transactions.That analysis also shows a high propensity for risk which means that while attractive this market is one that should be approached with care. That being said you can’t win it if you aren’t in it. It is an historical event we are watching and lucky to be a part of it. An argument could be made for ownership of a small position just to be able to you are a part of it and participation is the key to success.
Our cryptocurrency analysis tools tell us Bitcoin is no bubble, it is the leading edge of a flood of money destined for the blockchain. As with any type of investment stick with the best in breed, diversify, avoid unnecessary risk and don’t trade the rent money. The best cryptocurrency to invest in for 2018 is Bitcoin but there are many other good choices starting with Ethereum and Litecoin. For best results only use top cryptocurrency exchanges and cryptocurrency analysis tools from trusted sources.