Types of cryptocurrency in the world
Currently, there are over 3000 cryptocurrencies in the world. Each one belongs to one of the three standard categories. They are altcoins, tokens and bitcoin. A cryptocurrency is a means of payment, created using a blockchain. Cryptocurrencies operate through the Initial Coin Offering (ICO) public offering. It is a traditional stock exchange debut. It is done through records. The second way to obtain cryptocurrencies is mining them. With the help of special rigs, which perform very complex mathematical operations, the desired virtual currency is extracted. Blockchain-based cryptocurrencies function on a peer-to-peer network. This means that the blockchain has no administrator, and all cryptocurrency users can use them on an equal footing and create a common network.
Types of cryptocurrency
Bitcoin (BTC) – it is one of the first cryptocurrencies introduced to the stock exchange and at the same time, it is the leading virtual currency in the world. Considering the market capitalization, this cryptocurrency always takes the first place. Bitcoin is a global peer-to-peer electronic payment system. The system allows the parties to conclude transactions directly with each other. The parties do not have to use the services of an intermediary, like ex. A bank. Bitcoin was released in 2008, and the network was launched in 2009. Since Bitcoin started trading, no downtime has been recorded, allowing its users to transfer money from anywhere, anytime. It is often considered a digital replacement for fiat currency and gold. This is because it can be spent and stored in the same way as traditional money. Bitcoin is a finite resource and therefore a valuable money storage means, same as gold, which inspired the creators of this cryptocurrency. A significant advantage of the currency is the convenience of its use. The funds reach the target account instantly, no matter what countries the users come from.
Altcoin – Also known as an alternative coin, because it was created as a replacement for Bitcoin, the transaction fees of which are quite high. In addition, altcoins are created due to the desire to earn money on cryptocurrencies that are constantly developing. It’s a way to multiply your capital and invest money. The most popular altcoins are:
Ethereum (ETH) – has a blockchain, it allows you to create smart contracts and create your own tokens used in the ICO process. Ethereum is available on many cryptocurrency exchanges. It uses 15-second blocks. In the case of Bitcoin, blocks take 10 minutes. The advantage of ETH is a global decentralized application server that is linked to the transaction history. BTC is just a typical cryptocurrency, meant to be used mostly for payments. The transaction fees in the case of ETH depend on its complexity. In case of BTC, transaction costs are fixed.
XRP – the main concept here is cooperation with various payment systems around the world, based on a decentralized digital system. It allows you to make transactions in just 5 seconds. Payments are processed and received automatically and are irreversible. Bitcoin and XRP are similar to each other. These currencies have a limited number of units that can be mined. They can be transferred between users and are equipped with digital security keys, which prevent fraudulent transactions. However, XRP offers a shorter transaction execution time than Bitcoin, as there is no need to wait for the block to be approved.
Tether (USDT) – The value here is based on supply and demand. The main concept behind USDT is that each coin is backed by one dollar. This currency is built on the Bitcoin blockchain. As such, every transaction that has ever been made can be checked in the ledger. The main advantage of USDT lies in its’ stability as a digital currency. Tether is constantly evolving and building trust among its users. USDT’s newest feature is their new periodic accounts.
Monero (XMR) – a cryptocurrency which guarantees anonymity when transferring funds, based on the blockchain technology. The currency is privacy-oriented and is an open source system using blockchain. The cryptocurrency is designed to hide the identity of senders, recipients and the amount of each transaction made. Bitcoin is also known for its anonymity, however there are limits to privacy you get there. It registers addresses and transactions in the blockchain, which makes it possible for third parties to see that data. They are therefore public and accessible. Monero hides the sender’s and recipient’s data, thus unauthorized persons cannot identify whether the key is publicly available.
Litecoin (LTC) – Often depicted as an improved version of Bitcoin. It runs faster and the transaction costs are lower than with BTC. It is one of the oldest cryptocurrencies and the second altcoin ever created. The average trading time is around 2.5 minutes.
Tokens – Unlike Bitcoins and Altcoins, tokens do not exist on their own. They are dependent on the network of another cryptocurrency. They do not have their own chain or block bases. Tokens are built on top of an existing blockchain.
Summary
Know we have hope, that we explained you types of cryptocurrency. Have a good day!