Cryptocurrencies are still coming into their own, and that means they’re evolving on a near-constant basis. Many people around the world have gradually come to understand just what cryptocurrency is, and how it might be useful. But even as this has happened, we’ve seen new cryptocurrencies emerge, and we’ve seen existing ones gain influence. Because of all this, it can be helpful now and then to look at the crypto market as a whole, and get a feel for what the most valuable and influential assets are.
Outside of pure value or market cap, there’s no exact way to measure these digital commodities against one another. As far as we’re concerned though, these are the five most important cryptos in 2020.
It all still starts with bitcoin. The original cryptocurrency remains the most valuable, as well as the one most investors focus their energy on. While bitcoin is still an extremely volatile asset, its potential for spikes in value (such as the surge we saw last summer) make it a very tempting opportunity for many who trade in cryptocurrency. Investments aside, bitcoin also remains one of the most useful options for those who actually want to spend cryptocurrency. It’s accepted at a growing number of stores around the world, and it can also be used to load debit cards that can be used just about anywhere (with the bitcoin converted to cash at the point of sale).
Despite being worth substantially less than bitcoin, Ethereum is frequently mentioned right alongside the market leader. It is in some respects the primary challenger to bitcoin’s status as the leader of cryptos — at least where long-term potential is concerned. What sets Ethereum apart is that it was designed as a platform that could be adapted to a variety of purposes. Basically, people can build “smart contracts” into the Ethereum platform. These are automatically enforced agreements that can facilitate the transfer of assets, information, and so on. The actual cryptocurrency on this network is known as ether, and some believe that as Ethereum applications grow and expand, ether (which is used to conduct transactions on Ethereum’s network) will ultimately gain significant value.
One of the trendier cryptocurrencies for the last year or so, Ripple XRP has become a popular item among investors. In fact, an up-to-date look at this asset states that Ripple is one of the most traded cryptocurrencies in the market, alongside bitcoin. There are two main differences between the two, however. One is that currently, Ripple XRP is dramatically less valuable. The other is that Ripple XRP doesn’t use a traditional blockchain the way bitcoin does. Instead, it uses a similar distributed consensus ledger, which actually makes for quicker transactions — one of the factors people prefer about Ripple.
Litecoin is often framed as “bitcoin junior,” and there’s something to that characterization. It was one of the first imitators of the leading cryptocurrency, and it functions very similarly, but at much lower value. There are two reasons litecoin continues to be one of the most significant crypto options, however. One is that like Ripple XRP, it facilitates faster transactions, which can put some traders at ease. The other is that litecoin is hot on bitcoin’s heels as an actual, useful currency, in that it’s accepted by many if not most of the same merchants that accept bitcoin. Some actually find that litecoin’s lower values make it more convenient to use as money as well.
Finally, there’s Libra — a cryptocurrency (or perhaps stablecoin, more accurately) that doesn’t actually exist yet. As you may have heard, this is an effort by social media giant Facebook to establish its own crypto option. Libra has faced some speed bumps since it was announced in 2019, but it’s still attracting new investors, and could still be released this year. We don’t know exactly what it will look like, but with significant backing, meaningful partnerships, and the Facebook attachment, it’s going to shake up the crypto market when it launches. Even that potential alone makes it one of the most important cryptos to watch in 2020.
Author Bio: Chase Deacon is an avid cryptocurrency and blockchain enthusiast and part-time fintech blogger. When he isn’t writing, he’s usually scouring the news or reading up on the latest in the crypto world.