Synthetic Crypto Assets: The Future Of Crypto Trading?

By Yash

Synthetic Crypto Assets

The world of cryptocurrency continues to grow at an astonishing rate. While bitcoin remains the most well-known digital currency and the first blockchain asset, more than 2,000 other virtual currencies are now listed on the coin market cap. This growing popularity has meant that a new breed of investors and traders has emerged with a thirst for knowledge about how to trade cryptocurrencies. Suppose you’re just getting started with trading crypto or want to expand your scope of trading opportunities beyond just bitcoin. In that case, there are several alternative options you may want to consider. Many newer cryptocurrencies offer benefits over bitcoin or at least have their own unique set of selling points. Some also have much lower market caps than bitcoin, making them easier for smaller traders to get in on. Here are some synthetic crypto assets worth exploring:

 

What is a synthetic crypto asset?

 

Many altcoins (coins other than bitcoin) on the market are synthetic crypto assets. These are tokens that are based on smart contracts that use the Ethereum network. This means they’re all ERC-20 tokens, the same protocol that allows the seamless exchange of tokens on the Ethereum network. This also means that synthetic crypto assets are not mined like bitcoin. Instead, they’re created by programmers using the computing power of computers around the world. The biggest synthetic crypto asset is called ether. It was created during Ethereum’s initial coin offering (ICO) in 2014. Ethereum is a blockchain designed to host decentralized applications or dApps. Ether is the fuel that powers the Ethereum network, and it’s used to pay for just about everything on the Ethereum blockchain.

 

Ether

 

Ethereum was the first blockchain to use smart contracts, the most widely adopted network outside Bitcoin. It was designed with the idea that the blockchain could be used to host decentralized applications or dApps. Ether is the fuel that powers the Ethereum network, and it’s used to pay for just about everything on the Ethereum blockchain. Ether is listed on most major exchanges, and it’s been trading since 2015. With a market cap of about $40 billion, it’s the second most valuable synthetic crypto asset after bitcoin. Ether’s price has fluctuated significantly in the past, although it remained relatively stable in 2019.

 

Ripple

 

Ripple is another synthetic crypto asset that’s worth knowing about. It’s a payment protocol designed to increase the speed and accuracy of cross-border transactions. Ripple’s market cap is around $13 billion, making it a lower-priced investment than ether. Ripple claims to be the fastest and most scalable blockchain, making it ideal for cross-border payments. It’s been adopted by banks worldwide, which has helped build a solid network of users. The price of Ripple has also been fairly stable in 2019, making it an attractive option for long-term trading. The biggest risk of investing in Ripple is that it’s not yet completely decentralized, making it vulnerable to government regulation.

 

Litecoin

 

Litecoin has a market cap of around $2 billion, making it a fairly affordable synthetic crypto asset. It’s a blockchain project that was created as an alternative to bitcoin. It’s been referred to as the “silver to bitcoin’s gold.” Litecoin is cheaper and much easier to mine, which is why it’s often viewed as a more accessible investment than bitcoin. Litecoin was designed to be used as a transaction method. It can process a block up to four times as quickly as bitcoin, making it more efficient as a payment method. This makes it an ideal digital asset to use with merchants who want a cheaper transaction cost. Litecoin has been more volatile than ether or Ripple, though its price has mostly trended upwards since 2019.

 

NEO

 

NEO has a $2 billion market cap and has been gaining a lot of attention as a synthetic crypto asset. Unlike most blockchain projects, NEO uses a delegated Byzantine Fault Tolerance (DBFT) consensus algorithm. NEO’s blockchain uses smart contracts, which sets it apart from other synthetic crypto assets that use ERC-20 tokens. NEO is also unique in that it has its own token, NEO, that can also be traded on cryptocurrency exchanges. In fact, it’s the 11th most valuable cryptocurrency in the world. NEO’s high ranking is due to the fact that it’s designed to function as a decentralized network for smart contracts.

 

Bitcoin Cash

 

Bitcoin Cash was created as a result of a “hard fork” in the Bitcoin blockchain. The fork is a controversial method of creating new synthetic crypto assets by splitting off from another blockchain. This means that Bitcoin Cash is a synthetic crypto asset derived from the Bitcoin blockchain. Billionaires like John W. Henry, George Soros, and the Winklevoss twins have invested in Bitcoin Cash. The price of this synthetic crypto asset soared in December 2018, and it remained fairly stable in 2019. Bitcoin Cash has a market cap of about $13 billion and is one of the best-known synthetic crypto assets. However, it’s also one of the riskiest synthetic crypto assets. There is debate over whether it’s truly decentralized like other blockchain projects.

 

Ethereum Classic

 

Ethereum Classic is a synthetic crypto-asset created when Ethereum underwent a hard fork. Ethereum Classic is actually the original blockchain that existed before the controversial fork. It has a market cap of around $1.5 billion, making it a smaller investment than Bitcoin Cash. Ethereum Classic uses smart contracts, making it another viable synthetic crypto asset to invest in. There is a lot of debate around whether it’s truly decentralized.

 

Zcash

 

Zcash is one of the newer synthetic crypto assets on the market. It was created in 2016 and is currently the 12th most valuable cryptocurrency. The price of Zcash has fluctuated wildly since it was first listed, though it remained relatively stable in 2019. Zcash is a blockchain project that claims to offer “privacy for all.” It uses “zero-knowledge proof” technology to make transactions private. Zcash has been adopted by several large companies, including JP Morgan Chase and Toyota. Zcash’s biggest risk is the potential for future regulation. It’s one of the more centralized synthetic crypto assets, which may be more vulnerable to government regulation.

 

Conclusion

 

Synthetic crypto assets are ERC-20 tokens created on top of the Ethereum blockchain. This means they all have similar characteristics and can trade them on a single exchange. Zcash is one of the newer synthetic crypto assets, and it’s also one of the riskiest. There is a lot of debate over whether it’s truly decentralized, which means it’s more likely to be targeted by government regulation in the future. These synthetic crypto assets provide a range of investment opportunities outside of bitcoin. They are different projects with different use cases, so it’s worth researching the different synthetic crypto assets to find the right one for you. You must invest in any cryptocurrencies after doing your own research and finding out what is right for you according to the amount of capital you have and your appetite for risk.