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November 8th, 2021

Cryptocurrency in 2022

The crypto boom is happening. Strap on your seat belt.

A lot of companies all over the world have started accepting crypto currencies. The acceptance of cryptocurrencies as a mode of payment has also triggered investment in the same. The demand for these cryptocurrencies is also increasing with time. However, some currencies have better chances of ruling 2022 than others. You will get a list of those crypto currencies. But before that learn about the factors that help in increasing the value of any crypto currency.

 

Characteristics of a Good Cryptocurrency

The factors that instantly increase the popularity of cryptocurrencies among the general public are as follows:

 

Security

Digital payments solutions have become an integral part of our lives with the advancement in technology. Since financial activities have come to the forefront of the internet, it is no surprise that users look for security. Cryptocurrencies are stored in digital wallets. Every user needs to enter a private key to become eligible to withdraw money from the wallet. You need to keep the private key safe to retain the protection of your digital funds.

The wallets that store crypto currencies are sometimes linked to identities of the real world. However, the nature of some blockchain networks is to make the transactions anonymous. The blockchain networks record transactions between two wallets using blocks. The block of transactions is added to a ledger or list. As soon as the transactions are registered to the ledger, they cannot be altered. This particular database containing all the history of transactions is distributed among a network of computers. This helps in ensuring further protection of the database.

 

Decentralised Authority

The lack of central authority increases the amount of security that can be offered. This also helps in ensuring that the value of a cryptocurrency cannot be subjected to corruption or manipulation. Several cryptocurrency platforms are offering proof of work to foster a decentralized approach. Blockchain networks keep track of all the data related to transactions. It helps in maintaining transparency within the blockchain networks. Moreover, it becomes practically impossible to tamper with the data that’s available on the blockchain. However, the cryptocurrency needs to be equipped with proper processing speed.

 

Scalability

The scalability of any cryptocurrency depends on the number of transactions that can take place every second. When transactions can be settled efficiently and quickly among two parties, a monetary currency becomes more popular. Cryptocurrencies function on a peer-to-peer basis without any central authority monitoring them. But increased scalability is often associated with sacrificing the aspect of decentralization.

Dash and Bitcoin Cash were launched with the goal to decrease the processing time of transactions. If a cryptocurrency wants to become as effective as fiat currencies, it needs to have speed at least equivalent to that of platforms like PayPal. The cryptocurrencies must be focused on increasing the speed of transactions even more. Each transaction is expected to be complete within three seconds or even less than that.

Finding scalability solutions for cryptocurrencies is still in progress. Lightning networks and other second-layer technology are trying to overcome the issue of processing speeds. Some other features like parallel processing and shading are also under testing. A valid solution for the issue of scalability is not too far.

 

Solve Problems

The purpose of using a cryptocurrency varies from one person to another. Each platform aims at solving a different aspect of value exchange. For instance, Bitcoin Cash was created to solve the issue of scalability. Similarly, some other alternative cryptocurrencies may be developed to solve issues like lack of anonymity.

 

Useability

Apart from the high speed of transactions, a cryptocurrency should also be easy to use. For novice users, cryptocurrency can be quite intimidating. But any good blockchain technology will enable even the less tech-savvy users to handle a cryptocurrency. Users need flexibility and an easy interface to deal with the complexities of making transactions with a crypto currency. Try to avoid a cryptocurrency that is hosted with a website. Any good crypto currency platform will have a proper app to help you in managing your finances.

 

Demand

The high demand for a cryptocurrency enables the product to become more valuable. For a cryptocurrency to become more valuable to the buyers, there needs to be a high interest rate in the market. Media coverage and potential regulation are two crucial factors that affect the demand for any cryptocurrency. Competition in the industry is also another major factor that influences the demand for a cryptocurrency.

 

Cryptocurrencies That Could be Impactful in 2022

Some of the cryptocurrencies that might have a large impact on finance in the coming year:

BitcoinIt is bound to appear on top of the list. Most of the trading platforms have begun to accept Bitcoin. It has been dominating the market since the time it was launched. Therefore, it is not a surprise that this cryptocurrency will dominate the economic market in 2022.

Ethereum: There is no doubt regarding Ethereum taking the second spot on the list. The value of Ethereum shot up by 800 percent in the last year. Cryptocurrency plays an essential role in the expansion of decentralized finance. Therefore, ethereal gaining all the attention is not surprising at all.

Binance Coin: This is the digital currency that has led to a striking increase in its value in the last year. After its launch by Binance, the Cryptocurrency has evolved a lot. New and unique developments related to the Binance coin have enabled an exponential increase in its value.

Tether: The reason behind the popularity of this crypto currency is its difference from its peers. Tether is the third most valuable cryptocurrency in the world. It is the ideal investment for people trying to avoid the volatility of cryptocurrencies.

Polkadot: Polkadot has been responsible for transforming the process of decentralizing the internet. Cryptocurrencies shine bright in two particular areas, which are security and speed. Polkadot excels in both areas to become one of the most reliable Cryptocurrencies.

Stellar: Low exchange costs are associated with Stellar. It has shown incredible growth in the last few months. The frictionless cross-border payment feature of this crypto has been stealing the show.

Ripple: Ripple has plans to go public recently. It is one of the major reasons for it to dominate the world of crypto currencies in 2022.

Cosmos: It helps in connecting all the networks of block chain, which results in an “internet of block chains.” It is quite possible to see a hike in the price of the cosmos in 2022.

Cardano: It has been stealing the limelight for being light on energy consumption. The energy levels of Cardano are quite low as compared to the levels of Bitcoin. Cardano has embraced proof-of-stake validation quite early. The transaction verification aspect is not inclusive in this platform. Therefore, it has a more decentralized approach with smart contracts.

Stellar Lumens: This platform has introduced a cross-border payment facility for users. It integrates as well as works alongside the old school system of banking. This crypto currency has undergone a lot of changes to building more utilities for users. It is quite likely to yield worthwhile results in terms of investments in the future.

 

Closing Thoughts

These are some of the potential crypto currencies that will rule the year 2022. Do you have any guesses about which one is going to the crypto king?

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