Cryptocurrencies have seen a significant decline in prices throughout 2018 with many recording a fall of more than 80% in their market capitalization. While the drop was seen throughout the cryptocurrency market, there has still been those that have performed better than others in 2018.
As a result, the rankings of the top five cryptocurrencies by market capitalization has changed slightly since last year. While the top four positions have remained the same with Bitcoin still the largest, EOS has climbed from 12th to 5th position since December 31, 2017.
So, what are the top 5 largest cryptocurrencies as of right now, and what do they do? Well, this article is here to explain it all as we soon welcome the new year of 2019.
Bitcoin (BTC) is a form of digital money or electronic cash. Bitcoin is decentralized and therefore does not rely on a bank or single administrator to function. Bitcoin is sent between users directly on the peer-to-peer (P2P) Bitcoin network. Bitcoin is the largest cryptocurrency with a current market cap of $66 billion. Bitcoin was also the first cryptocurrency ever to be created. It was an invention by the anonymous ‘Satoshi Nakamoto’ in 2009 who aimed to bring freedom to money like the internet did to information.
XRP is a digital asset for facilitating payments. XRP has the fastest payments process among other major cryptocurrencies as transactions can be settled in just 4 seconds. Therefore, XRP is used as a ‘bridge currency’ by global financial institutions which enables them to make international transactions in a simple and low cost manner. Ripple which is often mistaken for XRP is the company which released XRP. Ripple offers services that use XRP, therefore, driving its adoption, and the company owns 61 billion of the 100 billion XRP in circulation. XRP is the second largest cryptocurrency with a market cap of $15 billion currently.
Ether is the 3rd largest cryptocurrency with a market cap of $13 billion. It is the native token of Ethereum which is an open software platform based on blockchain technology. The Ethereum platform allows developers to build and deploy decentralized applications while the Ethereum blockchain focuses on running the programming code of those applications. Instead of mining, miners work to earn crypto tokens called Ether that fuels the network. Ether could also be used to pay for transactions fees and services on Ethereum network or held as an investment.
#4 Bitcoin Cash
Bitcoin cash was created in August 2017 and is a fork of Bitcoin. It was designed to answer the scalability issues faced by Bitcoin. By increasing the block size, Bitcoin Cash enables more transactions to be processed. Bitcoin cash increases the block size from the 1 MB used by Bitcoin to 8 MB. Bitcoin Cash is also known as Bcash and has a market cap that sits near $3 billion as we approach the end of the year.
EOS is the native token of EOSIO similar to how Ether is to Ethereum. EOSIO provides an infrastructure for decentralized applications (dApps) that enables the development, hosting and execution of commercial-scale dApps on its platform. EOS is the currency used to pay for the required resources on the EOSIO blockchain platform. EOS was released in August 2017 and has a market cap currently at $2.3 billion.
Safety Is Paramount When Using Crypto
While cryptocurrencies are revolutionizing the way the world transacts, they are not without their weaknesses. Cryptocurrency transactions and storage require the use of crypto wallets and private keys. Unlike with traditional banking where the bank is accountable for your funds, if hackers compromise your crypto wallet then your funds are unrecoverable.
Therefore, cryptocurrency users should do their utmost to mitigate these risks. As your private keys can grant access to your funds, it is worth making an effort to encrypt the files where they are stored and using a VPN to encrypt your internet traffic when storing on a cloud drive. Quality VPNs can be pricey without discounts so it’s worth looking online before making a purchase. Numerous hacking incidents involving cryptocurrencies on both a large and small scale occurred throughout 2018, this does not have to be the case in 2019 if good security practices are followed.