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Crypto Curious? Top 3 Tokens for a Beginner's Digital Asset Portfolio

The Motley Fool logo The Motley Fool 1/25/2023 Anders Bylund
Crypto Curious? Top 3 Tokens for a Beginner's Digital Asset Portfolio © Provided by The Motley Fool Crypto Curious? Top 3 Tokens for a Beginner's Digital Asset Portfolio

Cryptocurrency is becoming increasingly popular, and with it comes the need to understand how to get started. For those who are new to the world of crypto, it can be daunting trying to figure out which currencies to invest in. Fortunately, I can recommend three easy cryptocurrencies for beginners to use as a starting point. More sophisticated crypto solutions can wait until you learn the basics.

The three crypto names below are some of the most popular and well-known options on the market today. As the archetypes of different types of crypto digital assets, they offer a great way for beginners to learn about crypto investing without getting overwhelmed by too much information at once. By understanding the basics of Tether (CRYPTO: USDT), Bitcoin (CRYPTO: BTC), and Ethereum (CRYPTO: ETH), you will be ready to make informed decisions when it comes time to start investing in other digital currencies.

These tokens are great places to start learning about the digital asset space and are also robust investment ideas in and of themselves.

Tether: It's crypto, but also a lot like good old cash

Tether is a fundamental cryptocurrency that offers a unique solution to the challenges of digital currency trading. It is a decentralized, open-source asset built on the Ethereum blockchain that provides users with a stable, secure, and reliable way to store and transfer value. One Tether token was designed to match the value of one U.S. dollar, and the cryptocurrency's $67.1 billion market value is backed by an equal amount of cash, gold, loans, and other traditional value-store assets.

Like other so-called stablecoins, Tether works like cash in many ways and allows users to easily move funds between different crypto exchanges and trading services without worrying about exchange rate fluctuations or transaction fees. This makes it an attractive option for those looking for easy access to digital currency markets without having to deal with high risk or volatile swings in price.

Tether is a simple and easy-to-use cryptocurrency that offers a unique solution to some of the challenges digital currency trading poses. It's like keeping your cash in old-school savings or money market accounts, often paired with more generous interest rates. Picking up some Tether will get your toes wet in the crypto waters without straying too far from cash-like financial concepts and ideas.

Bitcoin: The first and still most essential cryptocurrency

Bitcoin was the world's first cryptocurrency, and is still the most important one in many ways. It has become a global phenomenon, with its decentralized system providing an alternative to traditional banking. It provides a secure and convenient way to store and transact money without going through a central authority, based on a public but securely encrypted transaction ledger, hosted by thousands of computers around the world. With features such as strong privacy, low fees, fast transactions, immutable ledger entries and more, Bitcoin has become the go-to cryptocurrency for many investors and traders around the world.

Bitcoin was created in 2009 by Satoshi Nakamoto, an anonymous person or group of people. It was designed to be a peer-to-peer electronic cash system that would allow for low-fee, fast transactions without going through a central authority. The price of Bitcoin is determined by supply and demand on exchanges. It is also protected by a hard limit on the number of Bitcoins that will ever be produced. It's kind of like gold: With a strictly limited global supply, the long-term value relies on rising demand.

The value of Bitcoin has been volatile over time, and there is a small but real possibility that it could become worthless in the future. However, there is also the possibility that it could become extremely valuable in the long run. And many other cryptocurrencies were started as slightly tweaked clones of the Bitcoin code.

So if you want to learn the basics of cryptocurrency ownership and creation, this is the perfect place to start.

Ethereum: The global hub for decentralized apps

Ethereum is a decentralized, open-source platform that helps developers create and deploy decentralized applications. It also provides access to the Ethereum blockchain, where users can create and store non-fungible tokens (NFTs), smart contracts, and other digital assets. With Ethereum, users can run their own decentralized networks and applications, providing secure storage of data and value.

Ethereum is becoming increasingly popular due to its secure infrastructure, low cost of entry into the blockchain space, and ability to create unique digital assets with automated monitoring. If you're looking to get into the world of basic crypto investing, then Ethereum is another great place to start.

Furthermore, Ethereum is a role model in the crypto world just like Bitcoin. Many smart contract platforms are copied from the original Ethereum code, and others are actually tokens on the Ethereum blockchain network. That's an industry standard known as ERC20, laying the groundwork for tons of new ideas that also take advantage of Ethereum's robust feature set.

And Ethereum's lead in the decentralized app community is great enough that many of its rivals are building Ethereum-compatible smart contracts into their original code platforms. Imitation is a great compliment.


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Anders Bylund has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.


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