The crypto craze has taken over the finance world and does not seem to be slowing down. Over the last few years, it has established itself as a dominant force in financial markets and fights for a portion of investor wallets. But for many newcomers, understanding the market state and which tokens to buy can be daunting. So what are the top cryptos to invest in 2023?
Introduction About Crypto
Crypto tokens are essentially a digital form of an asset. They enable users to make and receive payments from anywhere in the world, with no central authority controlling the system. Tokens operate on a blockchain, which is a distributed, public ledger of transactions available to anyone. Any data or transaction once created on a blockchain cannot be altered or deleted.
Today, the options available in the crypto industry are endless. From simple transactions to NFTs, sports platforms and even games, you can engage with a huge variety of platforms. To invest in crypto, all you have to do is choose an exchange and get started. You can pick from centralized or decentralized exchanges, each with its own advantages and shortcomings.
Top 10 Crypto to Invest in 2023
What are the top cryptos to buy?
Binance Coin (BNB)
Launched in 2017, BNB has evolved from a simple token to powering its own ecosystem. At first, BNB was used to provide special benefits to users of the Binance crypto exchange, such as lower fees, exclusive access to initial coin offerings and cashback.
Today, it forms the backbone of the BNB Chain ecosystem, which boasts high speed and low cost to compete with Ethereum’s dominance. It has established itself as a strong option in the market.
Pros of BNB
- Low costs and high throughput mean it can service much greater demand than many competitors.
- Owning BNB provides you benefits on the Binance exchange platform
Cons of BNB
- BNB is a highly centralized token, as it is controlled and managed by Binance. This reduces the freedom available to its community.
- BNB’s success is tied to Binance, which has been targeted by the regulators of several countries like the UK, Japan and Germany.
TRON is a crypto and dApp platform to decentralize the internet. Its focus is to improve the scalability and availability of the blockchain to prevent downtime and network congestion. Additionally, it offers EVM compatibility, which makes it easy for Ethereum developers to port their applications to the TRON ecosystem.
Pros of TRON
- High throughput and scalability indicate the ability of TRON to service high demand is excellent.
- Delegated Proof of Stake (DPoS), used by TRON, makes it easier for users to participate in network security.
Cons of TRON
- TRON does not have as many developers creating for the ecosystem as its competitors.
- Ethereum continues to be the dominant force in dApps and TRON has not been able to mount a significant challenge to the incumbent.
Known as the “internet of blockchains”, Cosmos aims to create an interconnected network of chains to improve performance and developer options. Instead of depending on a single blockchain’s systems, Cosmos allows developers to deploy independent blockchains for their dApps. This allows them to benefit from the same network security and scalability, but customise the blockchain and its tokenomics for optimal performance.
Pros of Cosmos
- Interconnected blockchains improve the interoperability and performance of the network. It also allows users to connect with assets outside the Cosmos ecosystem like Ethereum and Bitcoin.
- Developers benefit greatly from the freedom provided by sovereign blockchains.
Cons of Cosmos
- Cosmos faces threats from larger competitors like Polkadot and Avalanche, which use similar methods for scalability.
- Most of the traffic in Cosmos is concentrated in a small number of zones, instead of being spread evenly across the network.
Maker is a decentralised protocol that runs and manages DAI. DAI is a stablecoin pegged to the US Dollar through crypto collateralization. The protocol is governed by the MakerDAO, a decentralised autonomous organization that allows its users to vote on key issues. MKR is the governance token of the platform and owning it enables you to participate in decision-making for the platform.
Pros of Maker
- The protocol is decentralized and controlled by its users, granting you a voice in its future
- DAI is one of the most popular stablecoins and is accepted by several DeFi protocols.
Cons of Maker
- Maker’s value stems entirely from its associated services like DAI. Any fall in their relevance will affect Maker’s value.
- Crypto collateralization is risky, as crypto assets are highly volatile. This can cause DAI to deviate from its peg, which may make MKR lose value.
Solana is a decentralised blockchain platform created for scalability first and foremost. It is one of the fastest blockchains on the market, with a transaction speed of almost 65,000 per second. It accomplishes this through the unique Proof of History consensus mechanism, which allows nodes to synchronize time across the network.
Solana has been one of the fastest-growing projects in the DeFi space and is widely called an “Ethereum-killer”.
Pros of Solana
- Solana is one of the fastest blockchains on the market, making it highly popular among investors.
- The platform also has very low transaction fees, with an average of $0.00025.
Cons of Solana
- Solana is not easily interoperable with Ethereum, thus restricting its smart contracts to those built for the network.
- Solana has experienced several network outages that have made it unreliable for its users.
Polkadot is a Layer-0 protocol for connecting and securing several blockchains, allowing them to be interoperable. This enables transfers of all types of digital assets including tokens and smart contracts.
This protocol can connect private and public blockchains, oracle services and other networks. It enables information sharing across a wide variety of networks and protocols.
Pros of Polkadot
- Interoperability is the biggest selling point of the Polkadot protocol. It allows several different blockchains to access data and assets from each other.
- Polkadot is among the most active platforms for developers to create on.
Cons of Polkadot
- Polkadot has a lot of competition in this space, with alternatives like Cardano and Cosmos fighting for more market share.
- Slots for independent blockchains are sold via auction, making it difficult to acquire them without access to substantial funding.
Dogecoin is one of the most popular tokens among investors. Initially started as a joke on Bitcoin, it became an internet sensation that garnered a passionate and active community. Its unique value is that it is based on the popular “Doge” meme.
The project has been endorsed by several figures in the crypto community and celebrities like Elon Musk and Vitalik Buterin.
Pros of Dogecoin
- The unique value proposition of a meme coin has sustained its power in the market.
- Active community working for the token’s success.
Cons of Dogecoin
- No practical application, value is only based on a meme.
- There is no cap on the total supply of DOGE, which leads to inflation in the token.
Unlike other general-purpose tokens, XRP is focused on creating payment solutions for banks and financial institutions. It solves several problems with competing systems like SWIFT for international settlements. Instead of requiring several hours or days for transfers to be finalized, XRP allows such settlements to be completed in a matter of seconds.
Ripple has made traditional finance much more accessible for users through the efficient application of blockchain technology.
Pros of Ripple
- Much faster than its competitors like SWIFT.
- Expands access to banking and international settlement by lowering barriers to use.
Cons of Ripple
- The network is highly centralised as all transactions are confirmed by a federated group of financial institutions.
- Ripple Labs is engaged in a legal battle with the Securities and Exchange Commission of the US.
The oldest and most popular crypto token on the market, Bitcoin was the coin that started the entire crypto craze. From its humble beginnings in 2009, it has soared to unimaginable heights and gained the attention of investors, the media and businesses.
The network is used as an alternative means of payment to cash and is protected through Proof of Work consensus. All transactions are stored on a blockchain, while miners can earn rewards for each block of transactions they confirm.
Pros of Bitcoin
- Most well-known token, which leads to heavy investments in the project.
- Relatively stable compared to some newer crypto tokens.
Cons of Bitcoin
- BTC operates on Proof of work, which consumes a lot of electricity and requires excessive time to confirm transactions.
- As BTC acts as an index of the general crypto market, it rarely deviates from general market trends and conditions.
After Bitcoin, Ethereum has established itself as one of the most dominant forces in the crypto market. It was the first to introduce smart contract functionality, which enables developers to create and automate several key features we take for granted today. Ethereum is also built to provide a platform for decentralised applications and finance, becoming the leading blockchain to service this need.
Pros of Ethereum
- The largest player in the DeFi and dApp space. This gives it market dominance and requires that competitors offer much greater incentives to switch.
- Ethereum’s long-awaited upgrades are expected to greatly improve network performance and costs.
Cons of Ethereum
- Ethereum is notorious for its high network traffic that can slow transactions down to a crawl. It must rely on scaling solutions to address the traffic on its network.
- Ethereum’s transaction costs can also skyrocket. In some cases, the fees can be higher than the value of the transaction.
From general-purpose tokens to specific applications in finance or scalability, the crypto market has great choices for every type of investor. While these tokens include some of the easiest-to-recommend investments for newcomers, seasoned investors may find smaller, more volatile tokens to make riskier investments for higher returns.
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