4 Bitcoin Alternatives That You Need for 2018

altcoins - 4 Bitcoin Alternatives That You Need for 2018

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Whether you appreciate cryptocurrencies or think it’s a scam, you’ve undoubtedly heard of bitcoin. Even Mad Money‘s Jim Cramer rails on about the digital token, though obviously not in a pleasant way. Perhaps he feels that he missed the boat, which is surely a common motif. But if you’re still willing to risk diving into the blockchain, bitcoin alternatives, referred to as altcoins, are your best bet.

Just what are altcoins? The term comes from the combination of two words: “alt” for alternative, and “coin” for virtual currency. Simply put, altcoins are cryptocurrencies other than the original bitcoin. A few years ago, these alternatives didn’t get much coverage. But with bitcoin soaring well above $10,000 last November, altcoins to buy lists are sprouting like wildfire.

The reasoning is patently obvious: bitcoin stands alone in terms of pure pricing. According to Coinmarketcap.com, bitcoin cash has the second-highest unit price, at approximately $2,450 a pop. Only one other digital token, dash, has a four-digit price point.

Psychologically, investors prefer to acquire whole units of an asset, not “fractional ownership.” Doing that with bitcoin is cost prohibitive. But with several altcoins to buy priced well under $10, these tokens are much easier to procure in whole.

However, not all cryptocurrencies are identical. Some have a distinct advantage over others, making them ideal bets, especially for newcomers. Here are four altcoins to buy in 2018 if you missed the bitcoin train!

Bitcoin Alternatives: NEM

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I first featured NEM as a cryptocurrency idea for our InvestorPlace readers last October. With a then-price of less than 21 cents, NEM was one of the cheapest major altcoins available. Given that my article was one of the most heavily visited on the topic, I sincerely hope my readers acted on my suggestion. Today, the NEM price is a dime under $2.

If you’re doing the calculations, NEM jumped approximately 800% in two-and-a-half months. You will not find such performance buying and holding equities in the pedestrian stock markets. My absolutely best stock idea, Bitcoin Investment Trust (OTCMKTS:GBTC), gained only 447% in half-a-year’s time. In contrast, you can take smaller-sized risks with altcoins, and make more money than you would in the traditional markets.

Of course, most people might get discouraged about the 800% move, thinking that the best is behind us. Consider, though, the remarkable case of ripple. Like NEM, ripple is a heavily diluted token, with nearly 39 billion coins in circulation. That hasn’t stopped ripple jumping from 19 cents to nearly $4 in the past three months.

More importantly, NEM arguably has a better blockchain. While ripple is exclusively focused on streamlining bank transactions, the NEM blockchain is open to multiple applications. Furthermore, businesses are attracted to NEM because its blockchain is scalable to increasing demand.

Given the success of similar altcoins, you’d be crazy not to try your hand at NEM!

Bitcoin Alternatives: Ethereum

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Prior to the aforementioned ripple coin’s rally, ethereum used to be the number-two cryptocurrency by market capitalization. Despite ripple’s shocking price explosion, ethereum still commands tremendous respect. Coinbase, the world’s most popular cryptocurrency exchange, offers ethereum on its trading platform, not ripple. But it might surprise some newcomers that ethereum isn’t the original coin that bears its name.

That honor belongs to ethereum classic. The entire story of how ethereum and ethereum classic were born is beyond the scope of this article. But a long story short, in the run-up to creating a fully-fledged market for the original ethereum, a hacker exploited a loophole in the system, draining out ether tokens. The crypto community panicked as ethereum backers debated on a solution.

A consensus of supporters decided to create a hardfork of the ethereum blockchain. However, a significant amount of dissenters existed. They objected to the hardfork on the basis that it violated the immutable principle of a blockchain application. Rather than follow the new blockchain pathway, the dissenters remained on the original. Thus, ethereum classic came to existence.

The hardforked ethereum is what most investors today get excited about, and for good reason. Its price will very likely hit and exceed $1,000. However, ethereum classic is the better deal. At under $33, if the original could duplicate half of the offshoot version’s success, it would be a phenomenal investment.

Bitcoin Alternatives: Steem

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The biggest hesitation that investors have against altcoins is that they must spend real money to acquire virtual currencies. We often hear criticisms that bitcoin is simply vapor that is destined to vanish, eliminating billions of actual dollars. But what if there was a way to acquire cryptocurrencies for free? Steem is the answer to this seemingly rhetorical question.

The steem coin is the underlying cryptocurrency of Steemit, a blockchain-powered social media platform. Unlike Facebook Inc (NASDAQ:FB) or Twitter Inc (NYSE:TWTR), regular folks can earn money through posting original content. Before you dismiss Steemit as a too-good-to-be-true fairy tale, take a look at the network’s top earners. With just one post, you can make hundreds of dollars, even thousands.

Better yet, you can transfer the steem coins you earn to a third-party exchange like Bittrex. Using my Bittrex beginner’s guide, you can easily sell your steem coins for bitcoin. From there, you have access to hundreds of altcoins. Using the Steemit network is undoubtedly the least riskiest way of building a cryptocurrency portfolio.

However, there is a catch: it’s very difficult to build a profitable steem account through blogging alone. In order to “juice up” your profitability potential, you can purchase “steem power” coins. This of course is a capital risk.

But with most major altcoins flying through the roof, getting involved with steem today could pay huge dividends later.

Bitcoin Alternatives: Stellar

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It’s hard to imagine any asset priced below a dollar as having a solid profitability potential. Hardened market investors understand that penny stocks are usually only attractive because of their unit price. However, with youth comes blissful ignorance. While older investors avoid cheap investments like the plague, Millennial cryptocurrency investors run to them like flies on stink.

When it comes to the digital markets, though, it pays to listen to youth. This is particularly the case for stellar. A little more than a week ago, stellar traded hands at 22 cents. At time of writing, the digital token came within striking distance of a buck. That’s serious performance given the ridiculously short time frame.

More importantly, I think stellar has additional room to run. Unlike the scalability-challenged bitcoin, the stellar blockchain closes transactions within seconds, not hours or days. As the blockchain concept becomes an everyday reality, transaction speed will be critical.

Furthermore, stellar extends the lightning-quick transactions to fiat currencies. For example, users can swiftly convert dollars to euros, rather than relying on cumbersome and expensive banking institutions. Recognizing the potential, International Business Machines Corp. (NYSE:IBM) uses the stellar blockchain to develop a payments system with large banks.

With so much opportunity, and an accessible price point, stellar is one of the best altcoins to buy in 2018!

As of this writing, Josh Enomoto is long all the cryptocurrencies mentioned in this article.

Article printed from InvestorPlace Media, https://investorplace.com/2018/01/4-bitcoin-alternatives-that-you-need-for-2018/.

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