Cryptocurrency is a booming market based around the success of bitcoin’s decentralized virtual economy. With no central regulating or administrative authority, these economies can thrive outside of the normal boundaries of national money systems.
Since they regulate their own supply based on the activity of their users and often cap the total number of tokens, virtual economies are not subject to inflation. Since the transactions are anonymous and secured by cryptography, the money cannot be seized by the government. The IRS has determined that virtual currency isn’t taxable as money at all but is rather considered to be the user’s property.
Knowing a few of the best cryptocurrencies out there can give your investment a leg up in these markets, some of which have been around for a decade and others of which are launching this year.
Litecoin
Litecoin is often cited as the next best option after bitcoin. Founded by a former Google engineer, this open-source payment network can be used and decoded by any personal computer. It boasts a faster transaction rate even than bitcoin because of its specific scripts.
Tether
Whereas most virtual economies are untethered from any real-world asset, Tether is what’s known as a stablecoin. This means that its virtual economy is not purely virtual, pegging its market prices to the value of a national currency or a commodity like gold.
For those that want to invest in a virtual economy but fear the volatile and speculative nature of the bigger ones, Tether can be a more traditional alternative investment.
Kin
Kin is launching later this year after its successful ICO funding in 2017. It will harness its parent company, Kik, as a platform on which it will establish an immediately monetizable shared economy using the Kin token as currency.
Content creators will be able to incentivize their users to support them through Kin currency while they themselves are incentivized through Kik to use the Kin system. With already 750 billion units in circulation, Kin prices are looking promising.
Kin will launch later this year, so keep on the lookout for this newcomer in the virtual economies market.
Ripple
Traditional institutions may not be crazy about virtual “mining,” the process by which services like bitcoin create new currency. To complete cross-border transactions efficiently, Ripple’s currency is only placed into the economy when it’s needed and removed according to the network’s guidelines.
The Takeaway
No matter which cryptocurrency catches your eye, they represent increasingly valuable investments in 2020. The rise of the Kin token price predicts even more networks popping up around existing engines and user bases.
As part of a new economy, virtual currency has a lot of potential for growth that should be getting your attention as we head into a new decade.
