If you're just getting started in the world of cryptocurrency investment, you might be wondering where to begin. With thousands of cryptos available, the selection can seem overwhelming. For example, there are more than 7,700 listed on CoinMarketCap. This includes everything from the world's most well-known crypto, Bitcoin, to popular meme coins like Shiba Inu.
So there are plenty of possibilities. And there also is plenty of risk. Some cryptos don't offer much in terms of real-world utility. That means it's difficult to say whether they'll grow (or even be around) well into the future. If you're new to crypto investing, you'll want to stay away from these names. Instead, it's best to start off with a player that's already showing just how useful it can be...
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The second-biggest crypto
I'm talking about the world's second-biggest crypto after Bitcoin. And that's Ethereum (ETH 1.09%). Ethereum's currency is called Ether. But Ethereum isn't only designed as an alternative currency system.
Instead, Ethereum's main feature is its ability to run decentralized applications (dApps). These run across a network rather than on one server. The advantage? No one person or organization controls or can interfere with operations. This minimizes the risk of fraud. And downtime isn't an issue because an individual isn't needed to manage the processing of transactions.
So, what are the transactions? Developers can build and individuals can use dApps for a variety of purposes including finance, gaming, and even for investment in artwork.
Ethereum could make a major mark on the financial world in particular. The platform promises to make your money "programmable." That's because you can do more than just buy this cryptocurrency and hold on to it. On Ethereum, you can borrow money with or without collateral. Other uses include scheduling payments or even buying insurance. For example, farmers can buy crop insurance on the platform, and natural disasters like floods result in automatic payouts. Right now, about 3,000 dApps run on Ethereum, according to State of the DApps, a website.
An even brighter future
And it looks like the future might be even brighter for Ethereum. That's because the crypto is making an upgrade that should eliminate one big problem right now: transaction speed. Today, Ethereum can only process about 30 transactions per second. But an upgrade set to release next year aims to speed that up to as many as 100,000.
If all goes smoothly with the upgrade, we could see gains in Ethereum. And since that upgrade should make the platform more efficient, we could see increases further down the road.
This doesn't mean Ethereum comes with zero risk. As with any crypto, you should only invest what you can afford to lose. Since crypto is so new, it's impossible to predict what will happen, even if a particular crypto lays out a solid development plan. But if you accept this, now is a great time to get in on this growing industry. And Ethereum, for its strong presence today and potential for tomorrow, is a good place to start.
