Cryptocurrencies have become fashionable, something that is evidenced by seeing how they have become popular on social networks and other media. Its great boom and the succulent profits that some of these virtual currencies seem to give has contributed to its expansion. How many types of cryptocurrency are there?
However, despite their sudden fame, not everyone is very clear about what they are, how they work and how many types of cryptocurrencies there are. Next, we will talk a little more in depth about cryptocurrencies and we will discover what are the most popular types of cryptocurrencies .
Types of cryptocurrencies
Cryptocurrencies have become very popular, especially as a result of the economic instability of 2020 due to COVID-19 and the apparent economic recovery that 2021 has brought with it. The virtual world has been gaining weight, and with it the investment in assets that move away , to a greater or lesser extent, from the classical stock markets.
Cryptocurrencies or cryptocurrencies are a digital or virtual currency designed to function as a medium of exchange, just like money does in real life. These currencies serve us to pay for products or services, working for the same thing that we use physical money.
However, using virtual money can involve risks, including being hacked and stolen from us . This is where cryptography comes into play, which is the science that is responsible for encrypting a message so that it can only be read by the appropriate recipient. Thus, cryptocurrencies are digital money that, through cryptography, is protected so that it reaches its destination, without being intercepted or stolen along the way.
Cryptography is not only used to ensure that cryptocurrency transactions are secure, but also to prevent new units of these cryptocurrencies from being created . Thus, we can say that cryptocurrencies are limited entries in a database that no one can change unless certain conditions are met. How many types of cryptocurrency are there?
The cryptocurrency landscape is very diverse. Anyone who wants to and understands a little about blockchain technology can create their own cryptocurrency with little difficulty, although this does not mean that it will be successful. Whether one of these coins becomes popular and is used by thousands of people depends more on luck and the means available to its creator to sponsor it than other factors.
Be that as it may, it is a fact that the market for these coins is growing, with currently some 1,600 cryptocurrencies considered minimally profitable , although it is estimated that there must be more than 10,000 of these invented cryptocurrencies.
However, cryptocurrencies and digital tokens that have real significance can be reduced to a short list of 15, appearing in it cryptocurrencies that are operated enough to have significant liquidity and that are the most used and popular.
1. Bitcoin (BTC)
Bitcoin was created in 2009 by Satoshi Nakamoto , a pseudonym that could well be that of a person or a group of them since their true identity has never been revealed. Created with Blockchain technology, its original objective was to be used as a payment method that is not affected by government supervision, delays in transfers or transaction fees.
This currency is considered the original cryptocurrency, the first functional cryptocurrency ever created and its intention was to be an alternative to the traditional monetary system, which in the crypto world is known as “flats currencies”.
The creators of this cryptocurrency have a kind of book called a “white paper”, stating that a flat monetary system controlled by central banks and a small number of financial institutions led to the centralization of wealth and power. This brought with it that financial and social mobility were hampered, hitting the middle and lower class because of inflation. How many types of cryptocurrency are there?
The objective of Bitcoin is to solve this, setting the maximum number of units that can be created and, thus, avoiding the inflation caused by the printing of money. With Blockchain technology “peer-to-peer” (peer network) they do not require any financial institution to facilitate transactions and verify ownership.
Today, Bitcoin is mostly used as a form of investment . Its characteristics are more similar to those of raw materials than to conventional currencies. However, its high volatility prevents it from being a legal alternative to fiat money (physical money), since the value of a unit of BTC is currently too high to be used as currency.
Thanks to being the first functional cryptocurrency, Bitcoin remains the most popular currency and its value has a strong impact on the rest of the crypto market . Throughout its history it has had some important ups and downs, going from being technically worth $ 0 in 2009 to reaching $ 60,000 per unit in February 2021. This means that currently not whole Bitcoins are bought, but fractions from them.
2. Ethereum, Ether (ETH)
After Bitcoin we have Ethereum as one of the currencies with the highest capitalization in the cryptocurrency market . Actually, the name of this coin is Ether, with Ethereum being the name of the blockchain platform that supports it. Ethereum is a blockchain platform for “smart contracts”.
Ether is responsible for providing the fuel necessary to process the decentralized applications of the network. Ether emissions are limited to about 18 million per year, which is 25% of the initial supply.
While Bitcoin is intended as an alternative to traditional currencies, the purpose of Ether is to be used as a means of payment for the use of the Ethereum platform. This cryptocurrency is considered a utility rather than an investment currency. How many types of cryptocurrency are there?
3. Dogecoin (DOGE)
The Dogecoin is a coin created in a humorous way from one of the most famous memes on the Internet: Doge the dog. It was created by modifying a Bitcoin protocol in order to reach more recipients than BTC itself.
Despite the fact that Dogecoin is considered a joke coin, the truth is that about 28.2 billion DOGE circulate in the market . Each of your coins is divided into 100,000,000 decimal places. The advantage of this cryptocurrency is that it is cheap, currently costing only $ 0.306652.
4. Binance Coin (BNB)
Binance Coin (BNB) is the cryptocurrency issued by the largest exchange in this world: Binance . BNB has become a very attractive means of payment that offers the advantage of being able to reduce the cost of transaction fees to people with BNB tokens in their account. Added to this, you can receive tokens of this currency as a reward for recommending its use to other people.
5. Ripple (XRP)
Ripple XRP is one of the largest and most well-known cryptocurrencies today, trading on many different crypto exchanges globally. It is also a payment network for banks with the aim of making your international payment transactions more efficient and profitable.
The project is dedicated to payment transactions between zones that use different flat currencies, thus increasing their efficiency. It is closely linked and backed by several traditional banks since its launch, and therefore Ripple XRP is considered an establishment cryptocurrency
NEO is the first Chinese open source blockchain project . Originally this project existed under the name AntShares, launched in 2014 with a total number of 100 million coins, all already issued, and aimed to improve Ethereum by offering the same utility but with a more sophisticated blockchain technology. In 2017, the brand name was changed to NEO. How many types of cryptocurrency are there?
7. Cardano (ADA)
Cardano is one of the types of cryptocurrencies that any user anywhere in the world can use as a secure exchange of value, without intermediaries . All transactions are recorded permanently, securely and transparently on the Cardano blockchain platform.
8. Litecoin (LTC)
Litecoin is an open source peer-to-peer currency, whose creators devised it as a potential alternative to flats . It has climbed through the ranks, becoming a prominent rival to Bitcoin. Its creators hope that over time the LTC will become a common method of paying for services and goods.
The source code of this cryptocurrency is public and can be accessed by anyone. It is an open source, fully decentralized global payments network and managerless transaction system. It uses a peer-to-peer network, allows instant payments and shows great transparency, showing how your project works in each of its stages.
Launched in March 2014, BitBay is a centralized exchange system based in Estonia that supports fiat pairs and crypto-crypto pairs . It offers a low trading fee, 0% in case of working in cryptocurrency markets, with deposits and withdrawals of 4 fiat currencies and more than 30 cryptocurrencies.
10. Polkadot (DOT)
Polkadot’s philosophy is that with its blockchain project it aims to solve a problem based on communication inaccuracies between different blockchains . Currently, the way blockchains work limits the possibility of external interference, which is an advantage because it guarantees a high level of security, but hinders communication between different blockchains. How many types of cryptocurrency are there?
The DOT processes different transactions for different blockchains in parallel, drawing on validators who stack DOT tokens and approve individual operations in the process.
11. IOTA (MIOTA)
IOTA is a project of an open source billing platform, based on the DAG (directed acyclic graph) architecture . Its cryptocurrency was created as a data integrity technology and industrial devices, to work with devices compatible with the Internet of Things or IoT (Internet of Things).
12. Stellar (XLM)
Lumen XLM is the digital currency of the Stellar network, a payment protocol that connects banks, payment operators and individuals . This platform allows you to transfer money instantly at low cost, regardless of currency conversion and location. XLM is both a means of payment and the “fuel” for the network in which it operates.
13. Chainlink (LINK)
Chainlink is a decentralized platform based on the Ethereum blockchain . It was created by Sergey Nazarov and is registered in the Cayman Islands. Its main objective is to solve the problem of connectivity of smart contracts with external data sources. This project has its own utility token, called LINK, that data providers use to charge fees for smart contracts.
14. Monero (XMR)
Monero is one of the emerging cryptocurrencies. It is digital, decentralized and anonymous but it differs from Bitcoin in that it does not allow the tracking of transactions . Monero aims to strengthen the anonymity of users.
15. Tether (USDT)
Tether (USDT) is one of the most popular cryptocurrencies, since it was designed so that its value matches the US dollar in a 1: 1 ratio . This makes this currency a very useful cryptocurrency when trading cryptocurrencies, since it allows operators to avoid market volatility and use as a reference a currency that at all times has the same value as the main flat-type monetary reference, the dollar. How many types of cryptocurrency are there?