Why are there different cryptocurrencies?

Nowadays, the number of cryptocurrencies available to the general public can confuse - even intimidate - new parents. So it can be helpful to remember why having more cryptocurrencies to buy is a benefit to you.

Simply put, individuals naturally have different aims and objectives, and having multiple cryptocurrencies means developers are experimenting with different approaches to helping individuals achieve these aims and objectives.

For example, a parent that is new to crypto may want to ease in to owning cryptocurrencies. This parent aims to balance risk and reward: own a new form of currency, but avoid financial wipeout. As this parent learns about popular cryptocurrencies, Bitcoin may stand out because of its brand, history, and status as the cryptocurrency with the largest market cap. Even though Solana can transfer more data per minute, the parent ultimately decides Bitcoin's reputation matters most.

A different parent may have another objective: buy crypto that has a reputation for innovation. In this case, the parent may read that Ethereum is the blockchain that developers are using to create NFTs and new financial services (known as DeFi for decentralized finance). It follows that this second parent might care less that Bitcoin has the largest market cap. Instead, this parent places more value on Ethereum's reputation as having best-in-class distributed computation capabilities.

Ultimately, decisions about what cryptocurrency to buy rely an individual's ability to articulate their aims and objectives.

UNest Plus members can access a growing list of cryptocurrencies in the UNest app today. If you're interested in upgrading, visit UNest.co or the UNest app learn more.

This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, UNest does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.