4 Top Ranked Cryptocurrencies & Where To Buy Them In Malaysia
If you are a newcomer to the crypto scene, it is easy to get lost and overwhelmed with information since there are over 4000 cryptocurrencies in the world as of January 2021.
So, we’ve narrowed down this article to cover the 4 top-ranked cryptocurrencies in the world. We highlight how they work, their security models, how to use them and where to buy them in Malaysia.
1. Bitcoin (BTC)
The first decentralized cryptocurrency and probably the best known among the rest, Bitcoin was created in 2009 by a character named “Satoshi Nakamoto”, but it is not clear who the real creator is and how many people are behind this pseudonym. .
Over the years, many people have come forward and claimed that they are the Satoshi Nakamoto. There have been rumors and reports suggesting that Japanese physicist Dorian Nakamoto is “The Face Behind Bitcoin,” but Dorian has denied being involved in the Bitcoin project.
According to the Bitcoin white paper published on October 31, 2008, Bitcoin was created as a peer-to-peer version of electronic money that would allow online transactions without going through financial institutions.
Blockchain is the technology that activates the Bitcoin protocol. It is a shared and distributed ledger that contains the history of every Bitcoin transaction that has ever taken place, and is made up of blocks that are chained together.
The most recent block contains the most recent transaction, its timestamp, and hash data from the previous block stored there. Changes to an older block will cause the block’s hash data to change, which will invalidate blocks that come after it because the hash data stored in the next block is no longer the same.
“Double spending” is a unique risk for digital currencies where the same money can be spent twice. Indeed, digital information can be copied and reproduced relatively easily on a computer. Physical currencies do not have this problem because they cannot be easily replicated due to their physical form.
And Blockchain has helped solve the problem of double spending in digital currencies, as all transactions are recorded in the blockchain in sequential order.
The underlying security and consensus model for Bitcoin is the Proof of Work (PoW) algorithm. Simply put, PoW involves the use of highly specialized machines to solve a complex mathematical puzzle, also known as “mining” in Bitcoin.
If a miner (machine) manages to solve the puzzle, the new block is formed. Transactions are placed in this block and considered confirmed. The miner who solved the puzzle and added new blocks will be rewarded with newly mined Bitcoins.
To participate in mining, you will need ASIC (Application Specific Integrated Circuits) computers specifically designed for Bitcoin mining and can cost several thousand dollars.
Now, different cryptocurrencies have different main uses, and for Bitcoin it is the store of value (SoV). Despite its volatility, one of the main reasons Bitcoin is considered an SoV is its scarcity.
Not only is it very difficult to mine Bitcoin through crypto puzzles, there is also a strict cap on the number of Bitcoins that can be mined, which is 21 million. To date, 18.5 million Bitcoins have been mined in circulation.
For Malaysians, there are 3 main ways to buy Bitcoin:
- Through exchanges regulated by the Securities Commission Malaysia (SC). The only 3 regulated exchanges are Luno, SINEGY and Tokenize.
- Through unregulated trade. These include Binance, Kraken, Huobi, and FTX. Note, however, that some of these exchanges are listed on SC’s investor alert list.
- Through P2P platforms such as LocalBitcoins and Remitano.
2. Ethereum (ETH)
The second largest decentralized cryptocurrency in the world, Ethereum (ETH), was created by Vitalik Buterin at the age of 21.
Before Ethereum, he entered the crypto space in 2011, co-founded Bitcoin Magazine, and got involved in many things Bitcoin-related for about 2 years.
He then dropped out of college to focus on crypto full-time and realized that there was more you could do with blockchains than a single peer-to-peer currency, this is how the idea of Ethereum was born in 2015.
Ethereum’s native coin is called “Ether,” which you can transfer from one account to another or earn through mining, like Bitcoin.
The main goal of Ethereum was to expand the limits of Bitcoin. Vitalik saw Bitcoin as a pocket calculator and Ethereum as a smartphone, thanks to which a smartphone can not only run a pocket calculator app, but many other apps as well.
The main difference between Bitcoin and Ethereum is that Bitcoin is like a ‘digital dollar’ while Ethereum is not just another cryptocurrency, but also has its own ledger technology that users can use to create new ones. programs, called “smart contracts”.
It is a type of Ethereum account and can send transactions over the network and have a balance. But these accounts are not controlled by a user.
Instead, users are given user accounts to interact with the smart contract and submit transactions that perform a function defined on the smart contract. Smart contracts can define rules like a regular contract and apply them automatically through code.
In other words, a smart contract works like a vending machine, where no physical vendor is needed to operate the machine, but users who want to make a purchase just need to enter the correct entry for the desired outcome.
Ethereum currently operates on PoW like Bitcoin as well, but is moving towards Proof of Stake (PoS) as a security model. How it works is that Ethereum users will have to wager 32 ETH to become a validator in the network.
When you become a validator, you will be chosen at random to create blocks and you will be responsible for verifying and confirming the transactions that go into a block. Part of your stake will be lost if you fail to validate the blocks given to you while if you validate a malicious block you will be heavily penalized.
However, the good news is that validators will also receive rewards for coming up with new blocks and validating the ones given to them, and you don’t need high-end hardware to create blocks or extensive calculations to mine them.
Ethereum currently has unlimited supply but is capped at 18 million ETH per year.
Similar to Bitcoin, Malaysians can buy Ethereum from:
- Thanks to SC regulated exchanges, of which we only have 3, Luno, SINEGY and Tokenize.
- Through unregulated exchanges like Binance, Kraken, Huobi, and FTX. Again, some of these exchanges are listed on SC’s investor alert list.
- Through P2P platforms like Remitano.
3. Binance Coin (BNB)
Binance Coin was created by Changpeng Zhao, a former McDonald’s employee who sold his apartment to buy and learn all about Bitcoin when he heard about it during a poker game in 2013.
In 2017, BNB was launched with an initial coin offering (ICO) of $ 100 million which sold out within 20 days, and the company raised US $ 15 million.
Cryptocurrency initially started as an Ethereum-based token, but eventually evolved to have its own custom blockchain known as Binance Chain, which did not yet support smart contracts like Ethereum.
Binance Chain is a distributed peer-to-peer system created with the aim of providing an alternative marketplace for the issuance and exchange of digital assets in a decentralized manner.
However, to help with Binance Chain limits, Binance Smart Chain was recently introduced. It now supports smart contracts and is compatible with Ethereum Virtual Machine (EVM).
Binance Chain uses both PoW, PoS and Proof of Authority (PoA) securities. PoA is used in the Binance smart chain so that blocks can be produced by a limited set of validators, have them take turns producing blocks in a PoA manner, and have validators elected through staking-based governance.
Dictionary time: Proof-of-Authority (PoA) is a reputation-based consensus algorithm in which block validators stake their reputation instead of coins. Blocks and transactions are verified by pre-approved participants, who act as moderators of the system.
Binance Coin (BNB) is capped at 200 million tokens. 100 million tokens have already been made public at the ICO, while 80 million have been allocated to the founding team and 20 million to angel investors, according to Coindesk.
However, Binance plans to burn half of its total supply (100 million) to stabilize the price of BNB over time and combat the depreciation in value that will occur with the decreasing annual reduction.
For Malaysians, there is only one way to buy BNB dollars i.e. through unregulated exchanges like Binance, Kraken, Huobi, and FTX.
4. Tether (USDT)
As cryptocurrencies are renowned for their volatility, Tether, the first stablecoin was created in 2014 by Brock Pierce, Reeve Collins and Craig Sellars.
Stable coins are often linked to real government issued currency (fiat currency) such as the US dollar and the ringgit. There are currently over 40 stable coins in circulation today. Since Tether is pegged to the US dollar, 1 USDT equals 1 USD.
The intended purpose of creating stablecoins is to combat the price fluctuations of cryptocurrencies and in the case of Tether, they wanted to meet the traders’ need to be able to easily transfer value between crypto and fiat currencies.
Tether does not have its own blockchain, but is found on 7 other blockchains which are Algorand, BCH, EOS, Ethereum, Liquid Network, Omni and Tron, with a total market cap of at least $ 37 billion, according to Coindesk.
There is only one way for Malaysians to buy USDT, and that is through unregulated exchanges like Binance, Kraken, Huobi, and FTX.
An overview of the 4 cryptocurrencies
|Bitcoin (BTC)||Ethereum (ETH)||Binance Coin (BNB)||Tie (USDT)|
|Founder||Satoshi Nakamoto (pseudonym)||Vitalik Buterin||Changpeng Zhao||Brock Pierce, Reeve Collins and Craig Sellars|
|Nature of cryptocurrency||Decentralized||Decentralized||Centralized and decentralized||Stablecoin|
|security||PoW||PoW and PoS||PoW, PoS and PoA||Depending on the blockchain|
|Where to buy in Malaysia||Regulated: Luno, SINEGY and Tokenize.|
Unregulated: Binance, Kraken, Huobi, and FTX.
P2P: LocalBitcoins and Remitano.
|Regulated: Luno, SINEGY and Tokenize.|
Unregulated: Binance, Kraken, Huobi, and FTX.
|Unregulated: Binance, Kraken, Huobi, and FTX.||Unregulated: Binance, Kraken, Huobi, and FTX.|
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