Types of Cryptocurrencies: Everything You Need to Know
Cryptocurrencies are encrypted data strings that denote one unit of currency. Blockchain, a peer-to-peer network, monitors and organizes cryptocurrencies. Also, it acts as a safe ledger of the transaction, for instance, purchasing, selling, and transferring. Cryptocurrencies, unlike physical money, are decentralized. It means they aren’t issued by the government or any other financial institution.
Also, cryptocurrencies are made and secured through cryptographic algorithms that get maintained and confirmed through the process known as mining. In the case of mining, a network of specialized hardware (like application-specific integrated circuits or ASICs) or computers process and validate those transactions.
In this article, you will find a cryptocurrency list that includes types of cryptocurrencies. We’ll mention below cryptocurrencies:
List of Cryptocurrency
Here are the ten major types of cryptocurrencies in the market right now. The market caps and prices reflect the figures we collected on 2 March 2022.
Market cap: $838,217,411,363
Bitcoin is the first cryptocurrency among all cryptocurrencies. It was introduced back in 2009 by someone or a group known as Satoshi Nakamoto. There is over 18.8 million Bitcoin tokens currency in circulation, while the limit is 21 million. Also, Bitcoin was made to be independent of any central bank or government. Rather, it depends on the blockchain tech – a type of decentralized public ledger to have the digital record of all Bitcoin transactions. The basic system of consensus and cryptography forms the foundation of most types of cryptos nowadays.
Bitcoin miners utilize powerhouse computers for verifying the transaction blocks and generating more coins through a time-consuming, complex process known as PoW (proof-of-work). These transactions are permanently logged on the blockchain. It helps to secure and validate every bitcoin and even the network as a whole.
Market cap: $361,021,322,167
Ethereum is the second one on the list of cryptocurrencies. Similar to Bitcoin, Ethereum happens to be a blockchain network. However, Ethereum was made to be a programmable blockchain. It means Ethereum was not made to support any currencies. Rather, it was meant to enable the network users to form, publish, and use applications known as dApps. The native Ethereum currency, known as ETH (Ether), was made as a type of payment on the platform.
Ether is typically the number two in virtual currencies because it stays right behind Bitcoin. The PoW system is also used to generate ETH. However, unlike Bitcoin, limitless ETHs can be made. ETH has helped to fuel several initial coin offerings as most ICOs use this blockchain. It is also behind the growth of the NFTs, non-fungible tokens.
Market cap: $32,459,237,864
Cardano calls itself the third-generation blockchain platform and considers itself as the next-level player among all cryptocurrencies. It depends on PoS (proof-of-stake), which means complex PoW calculations and higher electricity use needed for mining Bitcoins are not required. It also makes the network more sustainable and efficient. ADA, named after Ada Lovelace (the renowned mathematician of the 19th century), is Cardano’s crypto.
Traceability and identity management are the chief applications of Cardano. Identity management through Cardano helps to streamline data collection from varied sources. Traceability is used for auditing the manufacturing path of a product and potentially preventing counterfeit goods and fraud.
At present, Cardano is still being made in five phases to reach the aim of developing the network in a dApp (decentralized application) platform with verifiable smart contracts and a multi-asset ledger.
4. Binance Coin
Market cap: $68,133,754,469
When talking about types of crypto, Binance deserves a place too. Binance happens to be one of the biggest crypto exchanges in the world. Also, Binance coin (BNB) is the crypto token made to be used as the medium of exchange on Binance. Initially, it was made on the Ethereum blockchain, though it now stays on the blockchain platform of Binance.
It was made as to the utility token back in 2017 to let traders avail of discounts on the trading fees on Binance. However, it can be utilized for payments, entertainment, book travel, and financial services.
It was made with the highest count of 200 million tokens. Half of this was made available to the investors during the ICO. Binance purchases the coins back each quarter to permanently destroy some of them and continue to drive demand.
Market cap: $79,465,466,595
Tether holds the distinction of being the first-ever crypto marketed as ‘stablecoins.’ It is a type of crypto called fiat-collateralized ‘stablecoins.’ Tether’s value remains pegged to the American dollar.
Tether, similar to other stablecoins, is made to provide lower transaction charges, greater transparency, and higher stability to the users. It isn’t a speculative investment. In fact, it is useful to investors who are worried about the increasing volatility of the cryptocurrency market.
Since Tether is connected to the American dollar, its ticker is called USDT. It keeps maintaining a 1:1 value with the dollar, though this particular claim is doubted by some people. As per the company, it does not come with any guarantee of redemption of the tethers. Tethers can’t be exchanged for US dollars.
Market cap: $33,838,450,684
Sol is among the types of cryptocurrency that is generated by the blockchain platform called Solana. Solana has been highly volatile of late. It was trading at nearly $191.00 in September 2021, while it was $3.42 in 2020.
It has made rapid strides in the arena of decentralized finance (i.e., Defi). Particularly its smart contract feature that refers to programs run on the platform as per preset conditions (similar to paper contracts, minus the middlemen) is commendable.
Solana also made another non-fungible token called the ‘Degenerate Ape Academy’ possible and that came into existence in August 2021.
Market cap: $37,157,289,501
Since Ripple Labs made XRP, these two terms are often interchangeably used by people. However, these are different terms. Financial service companies use Ripple as a global money transferring network. XRP refers to the crypto that was made to function on the Ripple network. XRPs can be purchased as investments, as coins for exchanging other cryptos, or as a mode of financial transaction on Ripple.
XRP cannot be mined like Bitcoin and other crypto currencies. Rather, a limited number of XRPs are kept in circulation – 100 billion. Moreover, XRP does not have a complicated digital verification process through blockchain like Bitcoin and other cryptos.
The Ripple network has a unique system to validate transactions where the participating nodes carry out a poll for verifying transactions. Thus, XRP transactions are cheaper and faster than Bitcoin.
Market cap: $17,916,366,538
Dogecoin is the eighth on the list of cryptocurrency. It’s the first joke crypto that was launched back in 2013 to make fun of Bitcoin. However, it soon captured people’s attention and a sufficient amount of investment. Furthermore, in April 2019, Elon Musk had tweeted that he had a good feeling about Dogecoin, and that raised the value of Dogecoin as legit crypto.
It is an altcoin like Ethereum and Bitcoin that is run on the blockchain network through the PoW system. However, an unlimited number of coins can be mined in this case, unlike the 21-million limit placed on Bitcoin. Also, Dogecoin is related to several headline moments in the world of crypto. Investors have paid nearly $30,000 in Dogecoin to let the Jamaican bobsled team reach the Winter Olympics back in 2014.
Though it holds the position of one of the biggest coins in terms of market caps, Dogecoin trades at the lowest prices, like 24 cents.
Market cap: $18,715,189,871
Polkadot has a history with a crypt that is on this cryptocurrency list. Gavin Wood, the co-founder of Ethereum, is also the co-founder of Polkadot. His aim was to take the abilities of the blockchain network to the next level. The cryptocurrency of this blockchain is known as dot. Two blockchains are used by Polkadot, i.e.:
- The main relay network where the transactions tend to be permanent
- The parallel network of user-made blockchains known as ‘parachains’
Parachains are easily customized for several uses, such as making apps (these can also support the other coins), and these tend to benefit from the security of the chief blockchain.
Polkadot is different from other blockchains in its main mission to solve the issue of interoperability. It aims to build bridges between different blockchains. It isn’t the only system that tries to act as the translator to let the blockchains talk to each other. However, ever since it came into existence in 2020, it has turned into a rather big network in a shorter amount of time.
10. USD Coin
Market cap: $53,618,015,406
USD Coin is the stablecoin that uses the Ethereum blockchain and a number of others. It remains connected to the American dollar. It means that similar to the stablecoin tether mentioned above, the USDC is equal to one American dollar. The assured 1:1 ratio turns it into a stable kind of exchange.
The aim of having stablecoins like USDC is to make transactions cheaper and faster. Though there are still questions regarding the tether stablecoin and its connection to the US dollar reserves, most investors consider USD coins to be more transparent.
The American arm of Grant Thornton, LLC, a global accounting firm, monitors the reserves of USD coins. On 29th March 2021, Visa announced the usage of USDC for settling transactions on the payment network.
The Endnote on Cryptocurrency List
These are the top 10 major cryptocurrencies that you need to know about on the cryptocurrency list. Consider the different aspects of trading and using any of the cryptocurrencies before proceeding. Because different types of cryptocurrency require different types of perspectives. You can also talk to a financial advisor to know more about crypto currencies. At present, dealing in crypto has become easier even for novices.