Cryptocurrencies have become all the rage, as evidenced by their popularity on social networks and other media. Its great growth and the succulent gains that some of these virtual currencies seem to give have contributed to its expansion.
However, despite their sudden fame, not everyone is quite sure what they are, how they work, and how many types of cryptocurrency there are. Below we will talk a bit more about cryptocurrencies and find out what are the most famous types of cryptocurrencies.
Types of cryptocurrencies
Cryptocurrencies have become very popular, not least due to the economic instability of 2020 by COVID-19 and the apparent economic recovery that led to 2021. The virtual world has gained weight, and with it investing in assets that are moving away, to a greater or lesser extent, traditional stock markets.
Cryptocurrencies or cryptocurrencies are digital or virtual currency designed to function as a medium of exchange, just like money in real life. These coins are used to pay for products or services, working for the same thing as we use physical money.
However, using virtual money may involve risks, including hacking and theft from us. This is where cryptography comes in, which is the science that encrypts a message so that it can only be read by the correct receiver. Thus, cryptocurrencies are digital currency which, thanks to cryptography, is protected so that it reaches its destination, without being intercepted or stolen along the way.
Cryptography is not only used to ensure the security of cryptocurrency transactions, but also to prevent the creation of new units of these cryptocurrencies.. So, we can say that cryptocurrencies are limited entries in a database that no one can edit unless certain conditions are met.
The cryptocurrency landscape is very diverse. Anyone who wants and understands blockchain technology a bit can create their own cryptocurrency with little difficulty, although that doesn’t mean it’s 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.
In both cases, it is a fact that the market for these currencies is growing, and there are currently around 1,600 cryptocurrencies considered to be unprofitable, although it is estimated that there must be over 10,000 of these invented cryptocurrencies.
However, the cryptocurrencies and digital tokens that are of real importance can be reduced to a short list of 15, showing the cryptocurrencies that are sufficiently mined to have significant liquidity and which 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 because their true identity has never been revealed. Created with Blockchain technology, its original purpose was to be used as a payment method that is unaffected by government oversight, transfer delays, or transaction fees.
This currency it is considered to be the original crypto, the first functional cryptocurrency ever to be created and its intention was to be an alternative to the traditional monetary system, which in the crypt world is known as “flat coins”.
The creators of this cryptocurrency have a kind of book called a “white paper” claiming that a flat monetary system controlled by central banks and a small number of financial institutions has led to the centralization of wealth and power. This meant that financial and social mobility was hampered, hitting the middle and lower classes due to inflation.
Bitcoin’s goal is to solve this problem, setting the maximum number of units that can be created and thus avoiding inflation caused by printing money. With peer-to-peer Blockchain technology, they don’t need any financial institution to facilitate transactions and verify ownership.
Today, Bitcoin is mainly used as a form of investment. Its characteristics are closer to those of raw materials than conventional currencies. However, its high volatility prevents it from being a legal alternative to fiat money (physical money), as 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 seen significant ups and downs, dropping from a technical value of $ 0 in 2009 to $ 60,000 per unit in February 2021. This means that not all Bitcoin is currently being bought. , but fractions of them.
2. Ethereum, Ether (ETH)
After Bitcoin we have Ethereum as one of the most capitalized currencies in the cryptocurrency market. In fact, the name of this currency is Ether, and Ethereum is the name of the blockchain platform that supports it. Ethereum is a blockchain platform for “smart contracts”.
Ether is responsible for providing the fuel needed to process decentralized grid applications. Ether emissions are limited to around 18 million per year, or 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 useful currency rather than an investment currency.
3. Dogecoin (DOGE)
Dogecoin is a humorous coin created from one of the most famous memes on the internet: The Doge Dog. It was created by modifying a Bitcoin protocol in order to reach more recipients than BTC.
Although Dogecoin is considered a prank, the truth is that there are approximately 28.2 billion DOGEs in circulation in the market.. Each of its pieces is divided into 100,000,000 decimal places. The advantage of this cryptocurrency is that it is cheap, currently only costing $ 0.306652.
4. Binance Coin (BNB)
Binance Coin (BNB) is the cryptocurrency issued by the world’s largest exchange site: Binance. BNB has become a very attractive payment method that offers the advantage of being able to reduce the cost of transaction fees for people with BNB tokens in their account. In addition, tokens of this currency can be received 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, traded on many different crypto exchanges around the world. It is also a payment network for banks with the aim of making 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 has been closely linked and backed by several traditional banks since its launch, which is why Ripple XRP is considered an establishment cryptocurrency.
NEO is China’s first 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 more sophisticated blockchain technology. In 2017, the brand name was changed to NEO.
7. Cardano (ADA)
Cardano is one of the types of cryptocurrency that any user around the world can use as a secure value exchange, without intermediaries. All transactions are recorded permanently, securely and transparent on Cardano’s blockchain platform.
8. Litecoin (LTC)
Litecoin is an open source peer-to-peer currency, whose creators conceived it as a potential alternative to flat coins. It has climbed places becoming a leading rival for Bitcoin. Its creators hope that over time, LTCs will become a method of payment for services and goods. usual.
The source code of this cryptocurrency is public and anyone can access it. It is an open source, fully decentralized global payment network and administratorless transaction system. Use a peer-to-peer network, allow instant payments and be very transparent, showing how your project works at every stage.
Launched in March 2014, BitBay is a centralized exchange system based in Estonia that supports trusted pairs and cryptocurrency pairs. It offers a low trading rate of 0% in the case of working in the cryptocurrency markets, with deposits and withdrawals of 4 fiat currencies and over 30 cryptocurrencies.
10. Polkadot (POINT)
Polkadot’s philosophy is that with its blockchain project aims to solve a problem based on communication inaccuracies between different blockchains. Currently, the operation of blockchains limits the possibility of external interference, which is an advantage because it ensures a high level of security, but hinders communication between the different blockchains.
DOT processes different transactions for different blockchains in parallel, using validators that stack DOT tokens and approve individual operations during the process.
IOTA is an open source billing platform project based on the DAG architecture (Directed acyclic graph). 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 es 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” of the network in which it operates.
Chainlink es 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, which data providers use to charge smart contract fees.
14. Currency (XMR)
Monero is one of the emerging cryptocurrencies. It is digital, decentralized and anonymous but differs from Bitcoin in that it does not allow transaction tracking. Monero aims to strengthen the anonymity of users.
15. Tie (USDT)
Tether (USDT) has been one of the most popular cryptocurrencies since was designed to match its value against the US dollar in a 1: 1 ratio. This makes this currency a very useful cryptocurrency when trading cryptocurrencies, as it allows traders to avoid market volatility and use as a benchmark a currency that is at all times the same value as the currency. main flat base currency, the dollar. .