For a lot of people, cryptocurrency still feels like the Wild West of banking. It's relatively new, hard to understand and challenging to learn which types of digital coins are worth investing in. While most people have at least heard of bitcoin, other coins exist, too. Are they worth your money?
Dubbed "altcoins," I asked ChatGPT to explain a bit about these wily little digital coins and which ones are worth investing in. Here's what it said.
What Is an Altcoin?
I confess, I wasn't clear on the nature of an altcoin, so the AI clarified for me that it's basically "any cryptocurrency that isn't bitcoin." Uncreatively, the name comes from "alternative" + "coin." Some people exclude Ethereum from the category because it's so big, but technically, Ethereum is an altcoin too.
While bitcoin was designed mainly as digital money and a store of value, ChatGPT told me "altcoins explore all sorts of other uses."
- Ethereum (ETH): Runs smart contracts and decentralized apps.
- Ripple/XRP: Focuses on fast, cheap cross-border payments.
- Cardano (ADA): Aims to be eco-friendly and research-driven.
- Solana (SOL): Offers super-fast and low-cost transactions.
- Meme coins (like Dogecoin): Started as jokes but gained popularity.
Why Do Altcoins Exist?
The examples above already show how altcoins serve a wide range of purposes. ChatGPT explained that most of them were created "to improve on bitcoin's limitations," be that speed, energy use or programming issues, or "offer completely new functions in finance, gaming, NFTs and more."
While some of them offer real utility, others are highly speculative, and you definitely don't want to blindly invest in them.
ChatGPT warned that for the average American worker, "balancing safety and upside is key." You can expect bigger, more established altcoins to offer more stability, whereas newer projects can yield explosive gains -- or total losses.
Established, Stable Picks
In the realm of the more stable and established picks, ChatGPT offered the following three choices based on insights from Barron's and Crypto Economy.
Ethereum (ETH): The AI suggested that Ethereum is among the most stable altcoins. "Think of Ethereum as the main 'operating system' for most crypto apps," it said. A lot of digital contracts and new kinds of online finance run on Ethereum. Thus, "big investors are pouring money in, and some experts think it could climb toward $7,000 this year," the AI said.