10 Best Cryptos for Diversification
These 10 cryptos are a good way to diversify into the asset class because they all have different use cases. When you are new to investing in cryptocurrency, it is tempting to have the shotgun approach, like picking 30 different ones, putting the same amount in each, and hope they go up. With 7000+ to choose from that can be pretty risky. This list is a good starting point to aid you in doing your due diligence. I plan to do more in depth articles on each of them in the coming months.
I don't write this as someone without skin in the game. I am personally invested in each of these and believe they have the highest chance of succeeding over the long term.
Disclaimer: I am not a financial advisor. Do not buy or sell based on my recommendations. Do your own research. I simply want to inform you of the possibilities, so that you can go and do your own due diligence.
TOP 10 CRYPTOS FOR 2021
So why are they on the list, and how are they different from each other.
1. XRP - Cross-border Transactions
XRP offers financial institutions the fastest, most reliable option for sourcing liquidity on demand. It is designed for cross-border transactions and is backed by a huge distributed ledger protocol which is rapidly adding banks and other institutions to the network.
The company backing it (Ripple) has the ambitious aim for it to become the Global Reserve Currency, and for it to act as a bridge currency, meaning it bridges two currencies quickly and efficiently.
It is fast, uses almost no electricity, has almost no fees, and has a long track record of success. Ripple is committed to making the XRP token succeed. In September 2020 they have added Smart Contracts into the mix through partnership with the Spark.
Price at time of writing: $0.342 AUD
2. VET - Logistic Supply Chain
VeChain was created in 2015 by Sunny Lu, the former CIO of Louis Vuitton in China. He saw the problem that the company faced of having their handbags faked, a problem costing them X million per year. VeChain is meant to help businesses store important manufacturing information on a barcode so that the consumer can verify its quality.
For example, with Louis Vuitton's handbags they can store information such as location of origin of the material, manufacturing location and more. Then the buyer can scan this barcode prior to accepting the goods. Other use cases include perishable items such as milk or 'fruit n veg', where the temperature inside the truck transporting them can be stored on the blockchain to prove it is quality.
The breadth of use case of this technology is mammoth in size. Amazingly, VeChain (VET) already has a substantial customer base among established companies like
The blockchain company has also partnered with Chinese firm Jiangsu Electronics to develop custom RFID chips for use on its platform and car company Renault for its manufacturing operations.
Price at time of writing: $0.016 AUD,
So to understand Algorand, you really need to understand smart contracts. A smart contract is an autonomous digital agreement, where the creator of the contract defines the rules for the involved parties. Once saved onto the blockchain, it will remain there forever, and the code at that location will never change. Smart contracts are also responsible for automatically executing those rules and obligations.
An example of this could be a decentralised electricity company, where you pay your electricity bills to the smart contract and if it receives payment your power goes on, and if it doesn't your power turns off.
That is a simplified example and the contracts can get much more complex that that. Other smart contract platforms include Ethereum (ETH) and Cardano (ADA). I've included Algorand (ALGO) because you can earn 5% interest per year by staking it in the Algorand App.
My personal investing goal is to at a minimum beat the bank interest rate, and this sure does that. The staking reward, which I've called interest for simplicity is paid daily, which means it benefits from compounding interest. The team backing Algorand is also a huge asset to the project, but more on that in future articles.
Price at time of writing: $0.43 AUD,
4. REN - Transfers Between Blockchains
Ren is a way to transfer any token between any blockchain quickly and efficiently, it has been hugely popular since it started. It integrates into existing business infrastructure. It will open up new business models and means of transfer.
In the past year it has gone up 476% and 11% in the last week.
For a technical look at Ren and why it is different to other coins read this reddit post by raleigh_CA.
Price at time of writing: $0.479 AUD
5. ONE - Decentralised Applications
Harmony (ONE) is a fast and secure blockchain for decentralized applications. It's goal is to be a radically fair for the world. It uses the same consensus mechanism as XRP which is a huge benefit. Harmony aims to build an open network of nodes operated and governed by a large community. This node community is called Pangaea.
I've added this coin to the list because it is easy to accumulate a number of coins at a low price, whilst still being a really good technology.
Price at time of writing: $0.007 AUD
6. AGI - Artificial Intelligence
SingularityNET with the token AGI, lets anyone create, share, and monetise AI services at scale. Search, trial, and select from an ever-growing library of AI algorithms created by a community of service providers. Integrate AI services into your own applications. For example you can add facial recognition to your platform or language detection by using AGI. This is a good addition because it is in a different sector of the crypto market - Artificial Intelligence. They also build, design and integrate AI solutions for businesses.
Price at time of writing: $0.061 AUD
Fun Fact: Each crypto has their own name (eg. VeChain), 3 digit ticker (eg. VET) and a symbol (eg. V).
7. ZIL - Commerce
Zilliqa is a Singapore based project leveraging their silicon-smooth, speedy and cost-effective blockchain platform to catalyse and transform digital infrastructure across all global communities and industries. They have built a network that developers can build decentralised applications on. It is eco-friendly. In terms of diversification, it helps to buy coins based in different countries to lower your economic risk profile, meaning that if the country faces problems it doesn’t impact your whole portfolio. In the past year it has gone up 229% in value.
Price at time of writing: $0.026 AUD
8. AAVE - Lending
Aave is an open source and non-custodial DeFi lending protocol that enables users to lend and borrow a diverse range of cryptocurrencies using both stable and variable interest rates. Users can earn interest on deposits and borrow assets. It is enabling the lending of cryptocurrencies where interest is paid to the owner.
Aave has one feature that sets it apart from the rest. Flash loans allow customers or to take out loans without any collateral. These flash loans enable a customised smart contract to borrow assets from Aave’s reserve pools within one transaction. The loan is made on the condition that the liquidity is returned to the pool before the transaction ends.
Price at time of writing: $56.54 AUD
Tezos is an open-source platform for assets and applications backed by a global community of validators, researchers, and builders. It can be staked, earning a staking reward and stored on the Nano Ledger X. In Tezos, all stakeholders may participate in network upgrades by evaluating, proposing, or approving amendments. Tezos has appreciated in value by 140% this year, and 6% in the past fortnight. Thoroughly beating the bank interest rate. Tokens like Tezos that have staking are effectively another an income stream, comparable to long term deposits or dividends from shares.
Price at time of writing: $3.13 AUD
I like atom because of it's staking capabilities. It uses the same consensus mechanism as XRP. It is also able to have applications built on it. It has gone up 84% in the past year and 12% in the past fortnight. When you combine the coins above that do staking, you can effectively earn daily interest from 4 different coins all at the same time. In my opinion this is good diversification, and powerful over the long term.
Price at time of writing: $7.88 AUD
If you're an investor, or someone that wants to learn. It is really worth the effort to spend some time researching these, as we are nearing the start of the next crypto bull market for the cryptocurrency space, and it's better to buy at the bottom of the market than at the top.
Thank You to My Research Partner
I would like to thank Luca Maffioli a great friend and diligent researcher who has helped me put together this list. His careful and open-minded exploration of different projects has really helped me think outside the box in many ways that I never would have before. Thank you bro.
I hope you enjoyed this top 10 list. I want to remind everyone that risk and reward are linked. When buying cryptocurrencies you are taking a risk, but by leaving your money in the bank earning an interest rate less
then the inflation rate, you are also losing money each year. Be careful. Due diligence, research and taking an educated risk are the key to long term gains in investing.
The two safest long term investments on this list are XRP and VeChain in my opinion.
Feel free to message me if you have any questions.
I hope you have a wonderful day, Mitch Hamilton