Last week I published an article about the best digital currency portfolio you can currently buy. The list is based on market capitalization, and the top five coins are Bitcoin, Ethereum, Monero, Dash and Litecoin.
I was surprised by the number of comments asking for a list of cryptocurrencies with the best return on investment. Many readers have heard good things about Ripple (XRP), but they don’t know exactly why. So naturally they got curious and started to look into it.
The problem with virtual currencies is that they can be quite complicated to understand. There are lots of technical explanations, and some are more convincing than others. So I decided to create my own cryptocurrency portfolio with the best ROI out there. The valuable cryptocurrencies will be grouped according to their category: payment system, store of value, and decentralized currency. Here is what I came up with:
4 Cryptocurrency Portfolios With the Best ROI
The List is a guide to the best digital currency portfolio and return on investment. We will try to make it as simple as possible. The data used in this list is from Cryptonator and Coin Market Cap.
Cryptocurrency Portfolios (Portfolio 1)
Cryptocurrency portfolios are a kind of investment, but they are not like the usual sort of investing. They are not like stocks or bonds, where you can buy them and forget. There is no stock market for cryptocurrency portfolios. You can’t buy them in boxes of ten or fifty. You can only buy them one at a time with money, which you then have to hold onto and manage.
Cryptocurrencies themselves seem to be a promising thing to invest in. Most of them are still in their early days; some may turn out to be totally worthless and disappear forever (or at least until some clever person comes along with a better one). But that doesn’t mean they can’t be profitable over longer periods. Cryptocurrency portfolios will be more like hedge funds than conventional investments, but that does not make them risky; it makes them more reliable and predictable.
Cryptocurrency prices are notoriously volatile. There is no way to predict which crypto will be rising and which ones will be falling. Nevertheless, over the short term, there are clear winners, and it’s possible to construct a portfolio based on them.
It’s not enough to find the best digital currency that has done well over the past few days or weeks. You will lose money if you buy at the top when everyone is buying and sell at the bottom when everyone is selling. You want to buy low and sell high.
One of the biggest problems with digital currency investing is that most people can’t actually buy digital currency. The most widely used software, Coinbase, only lets you buy Bitcoin, Ethereum or Litecoin in fifty-cent increments; one Litecoin costs $350. So there’s no way to take advantage of price differences among coins.
But there are other ways around this problem. With a little finagling, you can get around it by using a combination of multiple exchanges and several different wallets. And even if you have to keep your crypto on a separate computer from your main one, there are still many options for that too.
The prices of cryptocurrency exchanges and digital wallet apps have exploded over the past year, and there are dozens of newcomers every day. The explosion has led to a proliferation of cryptocurrencies, a term that covers digital currencies like Bitcoin, Litecoin, Ethereum, and Ripple as well as emerging altcoins.
The current price of Bitcoin is around $14K per coin. That’s a lot more than it was just last year, when it was around $800. At that price, 1 BTC would be worth about $4 million. But the price keeps rising because there is a relatively fixed supply of coins that can be mined by anyone with an inexpensive computer. A single bitcoin can be divided in half 10 times, 20 times, or 50 times. This effectively limits how many bitcoins can ever exist to 21 million coins.
Each bitcoin is divisible down to 0.00000001 bitcoin (millibitcoin). These are known as “satoshis.” The smaller the bit you divide something into, the fewer decimal places you need to use in your calculations. So dividing by 10 means only 2 decimal places; 000 000 001 bits to write out these numbers; and dividing by 20 means 4 decimal places; 100 000 000 bits to write out these numbers; and so on up to
Cryptocurrency is a term coined by the first person to document it. In the mid-1990s, a programmer named Wei Dai used the term “cyberspace currency” to describe what he was working on. The name caught on, and over the next decade dozens of cryptocurrencies were created, with names like “Peercoin,” “BitGold,” and “Liberty Reserve.”
What made these new currencies so popular? Like other forms of money, they promised to solve some problems that had seemed intractable.
First among them: how to move money around without a middleman (like a bank). Bitcoin solved this problem by creating a digital ledger that recorded all transactions. When someone wanted to send bitcoins from one wallet to another, they could simply transmit a message saying “Give me X bitcoins.” No middleman needed.
This was revolutionary in theory, but in practice it was difficult for ordinary people to use. Most people didn’t have ready access to computers; others didn’t know how to program them. The result was that most of these currencies failed.
Eventually dozens of cryptocurrencies failed in such spectacular fashion that it became clear this was not just an accident or an outlier. Cryptocurrencies were almost always built on top of one or more failed
The most obvious reason is that some people do not want to be led in a particular direction, or are looking for a particular way of doing things. There may be other reasons as well, but the first one is so obvious that it is worth saying.
The second reason is that not every project works. Sometimes there are problems; sometimes you make a big mistake, and have to start over. But if you have been working on something for years, you don’t want to give up on it just because you made a mistake once or twice. You’re trying to build your reputation as someone who can get things done.
So you stick with it, no matter how long it takes.