A few years ago, I wrote several stories about a Native American tribe which planned to stop relying on the dollar and use Bitcoin as their currency.
Now I’m kicking myself for bleating on about cryptocurrencies at length, but never actually buying any.
A £1,000 Bitcoin investment made in the middle of 2013 would now be worth more than £175,000 – which is about enough to get a deposit on a modest flat in London.
But there are other ways to make a bit of money in the risky and volatile world of digital dosh and just as many ways of losing it all.
People looking to replicate the success of the first Bitcoin investors are investigating ‘alt-coins’ including Ethereum, Litecoin and Ripple in the hope they can be bought cheaply now and sold for a much higher price at a later date.
Oliver Isaacs, an entrepreneur and tech investor, made early investments in all these cryptocurrencies.
He told Metro.co.uk that some of these digital denominations could end up being worth more than Bitcoin
He said: ‘Litecoin is finally benefiting from the broader interest in cryptocurrencies and I see no reason, despite still being very early stages, why the price cannot eventually match or even surpass Bitcoin’s price over time.
‘The recent price surge has been the result of heavy trading volumes on one of the most popular exchanges, GDAX, and the uptake of new users on Coinbase.’
It has an advantage over Bitcoin because transactions happen more quickly, allowing buying and selling at increased speed.
‘As cryptocurrencies are becoming increasingly accepted by mainstream investors, institutional investors and hedge funds, I think investors will be looking to diversify their portfolios away from Bitcoin into altcoins like Litecoin,’ Isaacs added.
Litecoin shot up in price from about $4.50 at the beginning of the year to more than $320. Earlier this month, it shot up 333 percent in just a few days.
It’s not the only alt-coin that’s exploding in value.
The price for Ethereum is now at $706 after shotting up from a little over $8 at the beginning of the year. That’s a rise of nearly 8,300 percent.
These two coins are likely to grow in value because they can be bought using Coinbase, which is now the most popular app on the Apple App Store.
Another alt-coin has also been growing in value at an astonishing rate.
Ripple shot up by 50 percent this week to become the fourth largest cryptocurrency.
The financial giant Bloomberg has just begun announcing the price of Bitcoin, Ethereum, Ripple and Litecoin – which is a clear indication that investors are starting to take them seriously.
How to decide which cryptocurrency to invest in
Make sure people are ‘mining’ the currency because it’s an indication that it’s generating interest. If techies are willing to buy hardware to mine a coin, then it’s a vote of confidence in its future.
Ensure that businesses accept the coin. There’s no point buying a currency no-one wants to trade in.
Look for future growth potential.
Analyse the team behind the currency. Make sure they have a good track record.
Try to make sure there are no loopholes which could allow manipulation of the currency. If people lose trust in its value, it will become worthless very quickly.
There are hundreds of other alt-coins out there which are also being bought and sold, ranging from a porn-based currency called ‘WankCoin’ to DentaCoin, which is used by dentists.
So should you ditch Bitcoin and take a risk with a new currency?
Isaacs has this advice for prospective investors: ‘I have invested in coins I think are undervalued because of lack of awareness, but which have strong infrastructure or interesting economic models.
‘Currencies that provide a purpose or value, future applications in our everyday lives, and solid growth, and management team are the ones I personally invest in.
‘Bitcoin is still king right now and is the market leader in terms of value per coin. It is also the one that most are currently familiar with and is, therefore, the most widely used globally.’
Investing in any of these could make you a mint – or lose you a fortune – so we’d advise making decisions extremely carefully.
For more information visit CoinMarketCap or Coin Gecko.
More: UK
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