Despite widespread claims of high returns from investing in crypto assets, the road to wealth via cryptocurrency is rarely smooth or effortless.

By Nigel Bowen

Despite continued fears that international as well as national regulators could crack down hard on cryptocurrencies, thus generating a “cryptocalypse”, it appears at least some cryptocurrencies are here to stay. Here’s what you need to know.

The 800-pound gorilla: Bitcoin

Bitcoin was created in 2008/2009 after the global financial crisis. Like all of the 4000-odd cryptocurrencies that have subsequently emerged, Bitcoin is enabled by its underlying blockchain technology. 

Bitcoin’s pioneering status is both its strength and weakness. 

First-mover advantage means Bitcoin was embraced sooner than any other cryptocurrency, and it continues to be the default option for investors, as well as those governments, financial institutions and businesses that have been willing to embrace cryptocurrencies and blockchain technology. 

Reassuringly, Bitcoin’s creator only issued 21 million Bitcoins. Ultimately, the number of Bitcoin in circulation will never exceed 21 million, as per its protocol. So, when the demand for Bitcoin increases, there is only one variable that can change to ensure the demand and supply of Bitcoin are in equilibrium, and that’s price. 

Bitcoin’s dominance is such that all other cryptocurrencies are collectively referred to as “altcoins”. 

However, Bitcoin has two major downsides. First, as might be expected of a prototype, it is technologically primitive when compared to subsequently developed cryptos. 

More significantly for aspiring crypto millionaires, Bitcoin has already, to use the crypto-trader lingo, gone to the moon. 

While it will continue to be volatile and thus provide opportunities for those with good timing and nerves of steel, it is hard to see its value continuing to skyrocket the way it has over the past five years.  

The challenger: Ether 

“Ether” is the cryptocurrency generated by Ethereum, a blockchain that performs a range of functions. 

What’s unique about Ethereum is that users can build applications that “run” on the blockchain like software “runs” on a computer. These applications can store and transfer personal data or handle complex financial transactions. 

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