By Daniele Bianchi

The number of cryptocurrencies has now reached around the 1,600 mark, but with an Initial Coin Offering (ICO) relatively easy and quick to do that is set to continue its upward curve and with now estimating that 39 have market capitalisations of more than $1 billion you can see the incentive.

Governments are also looking to develop their own ICOs after Venezuela's attempt to get around its many sanctions and boost the crisis-hits economy by launching the Petro.

Many critics have called this explosion a bubble that can’t last much longer, with Goldman Sachs comparing the market to the internet bubble of the late 1990s. It is a volatile market, especially with the vast army of cryptos usually moving as one, with $550 billion wiped off in one day in February.

And Goldman Sachs are among many that believe like the internet bubble only a few will survive when the crash comes. But which of the myriad cryptos will be the Googles and Amazons that become the long-term dominant digital currency. Here are the top five that I think have the potential to be around in the next decade:


1 Ethereum

Where do all the ICOs come from? Well, most are built on Ethereum’s platform. As long as ICOs are in demand then Ethereum will keep growing and so will the price of its currency.

But its other strong point – and probably more long-term value – is its smart contract system, which has been its attraction since its inception as an open source platform in 2013.

Created by Russian-Canadian programmer Vitalik Buterin, Ethereum is now the second most-valuable cryptocurrency, but its smart contracts can be applied to many domains, giving it tremendous value.

Smart contracts use the same distributed ledger system as blockchain and so allow the exchange of property, shares, or any sort of legal contracts without the need of a middleman.

Ethereum’s smart contract automatically executes the exchange of contracts when certain conditions are met without any possibility of fraud and so has the potential to be applied in a wide variety of industries.


2 Monero

This open source cryptocurrency’s big attraction is that it is completely anonymous, every transaction between the sender and the receiver is recorded but it is completely private.

Usually crypto users have a public address or key that is recorded so it can be traced, but Monero uses a ‘stealth address’ system for each transaction so only the sender and receiver can see the address.

This means Monero is fungible, ie it can be interchanged with another Monero. There will be many people who value Monero’s privacy, though that also means it attracts criminals trying to avoid detection by the law.


3 Ripple

Ripple was built to revolutionise the way payments are made across countries, which at the moment is still done by SWIFT (The Society for Worldwide Interbank Financial Telecommunication), a network established by banks and financial institutions worldwide and now seen as the plumbing of the global financial system.

But in comparison to the digital world we live in, SWIFT - which was set up in 1973 and in 2015 linked more than 11,000 banks and financial services, exchanging 15 million messages a day - is slow and cumbersome.

Ripple is looking to replace SWIFT with RippleNet that sees payments made across borders and institutions in an instant compared to the days it takes with SWIFT.

It was developed using blockchain technology and partnered with Massachusetts Institute of Technology (MIT) in 2015 to develop new financial services. Santander, Westpac, Standard Chartered and American Express are among the companies already using RippleNET.

In comparison to Bitcoin and other cryptocurrencies Ripple is cheaply priced, but this can partly be explained by there being nearly 40 billion XRP tokens in existence, while Bitcoin is limited to around 17 million coins.


CEDEX aims to turn diamonds into a new asset class. It is a diamond exchange platform where not only can people liquidate their diamonds in a secure way, but anyone can invest in diamonds, shares of a valuable stone or shares in an Exchange Traded Fund (ETF) of diamonds.

By using blockchain and a machine learning algorithm the CEDEX platform can evaluate a diamond as every stone is given a  GIA Certificate number and is then able to take into account its purity and rarity.

This valuation is then transparently displayed to traders with a rate and contract being made for every stone uploaded.

The CEDEX coin allows anybody to invest or purchase these diamonds. The CEDEX ICO pre-sale of 25 million coins in March 2018 was incredibly successful, with $20 million raised in just under four hours.


5 Litecoin

Litecoin is very similar to Bitcoin, but is quicker and in much more ready supply. It is a spin off from Bitcoin and an open source project with the code freely available on Github – a platform for coders and software developers to work together on projects.

Litecoin was created in 2011 by ex-Google coder Charlie Lee, who set out to solve some of the issues Bitcoin had. Bitcoin is seen as a long-term store of value by crypto enthusiasts, like gold, while Lee set out to make Litecoin as cryptocurrencies' ‘silver’, ie for cheaper everyday transactions.

It is four times quicker than Bitcoin at mining coins so there are a vast amount of Litecoins available, which gives it a relatively lower price.

Lee sold his entire holding of Litecoin in December 2017 and though he is still working on the currency, he eventually aims to step back fully so it is a completely decentralised currency.

Litecoin is a fraction of the price of Bitcoin and this alone gives it great potential to increase in value in the long term.

Daniele Bianchi is Assistant Professor of Finance and teaches Empirical Finance on the MSc Finance.

Follow Daniele Bianchi on Twitter @WhitesPhD.

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