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Today, computer technicians use cryptography in a variety of ways. One of those ways is cryptocurrency! Decryptionary.com defines cryptocurrency as “the currency created with technology that controls the creation and protection of its transactions while concealing the identity of the user”. For now, you can forget about how cryptocurrencies are made and focus instead on what they do. Discover 10 most popular types of cryptocurrency in trading.
Types of Cryptocurrency
There are over 4,000 cryptocurrencies as of January 2021 and choosing the best coin to invest in can be a daunting task, especially if you are new to the crypto world. Bitcoin was the first cryptocurrency ever created, and everything other than Bitcoin is collectively referred to as “altcoins”, which essentially means “an alternative to Bitcoin”.
While it is impossible to predict which cryptocurrencies are best, Bitcoin and some of the larger cryptocurrencies are top picks due to their scalability, privacy, and range of functions. . While there are many ways to make money with Bitcoin, the most popular cryptocurrency, let’s explore all the different cryptocurrencies you can invest in.
Top 10 Different Types of Cryptocurrency
To help you figure out the answer to “How many cryptocurrencies are there”, let’s dive into the ultimate list of different cryptocurrencies.
Bitcoin has pioneered a new innovative alternative to cash known as a digital currency. It was originally released in 2009 and was founded by Satoshi Nakamoto. Bitcoin is based on a distributed ledger called blockchain technology. Around 18.5 million Bitcoin tokens are currently in circulation, compared to the current market cap of 21 million.
- The largest community of developers and investors
- Easy for beginners
- Supported by leading exchanges and wallets
- Accepted by many mainstream companies including Microsoft, Overstock.com, Bloomberg, Expedia.com, and others
- Low transaction speed(one transaction takes about 10 minutes and the Bitcoin network can handle 7 transactions per second)
- Bitcoin mining requires expensive, super-powerful, power-consuming hardware High transaction fees
Created in 2015 by Vitalik Buterin Bloomberg, Ethereum is more than just a digital currency, becoming the second-best coin that anyone can invest in. It is a platform based on blockchain technology for developing decentralized applications and smart contracts. Smart contracts are encrypted agreements on the blockchain that execute when certain predefined conditions are met. What makes Ethereum different from other cryptocurrencies is that you can start building directly on the Ethereum network blockchain.
- Building smart contracts is often considered the next big thing in the crypto universe
- Launching Initial Coin Offerings (ICOs) for Other Blockchain Projects
- High transaction speed (several seconds)
- Scalability issues
- Use obsolete mechanism (Proof Work) for transaction verification
- Network congestion
- Requires a lot of electricity
- Supports one coding language – Solidity
Founded in 2012, Ripple focuses on solving problems related to a single industry: international payment transfers. It aims to make international transactions both fast and cheap. It is better known for its digital payment protocol than the cryptocurrency XRP.
- International money transfer takes seconds
- Significantly low fees
- Tested in the real world
- Used by American Express and Santander
- Banks and financial institutions (biggest Ripple users) have started to develop their cryptocurrencies
Lite coin (LTC)
Charlie Lee, a former Googler, created Lite Coin in 2011 to improve existing Bitcoin technology, shorten transaction times, reduce fees, and centralize miners. Similar to Bitcoin, the Lite coin is just a digital currency that does not provide a foundation for smart contracts. Lite coin has stood the test of time in its effectiveness and is currently one of the most popular cryptocurrencies.
- Transactions take around 2.5 minutes
- Average Lite coin transaction fees are $0.179
- In addition to transaction speed, it faces fierce competition from privacy-providing coins, smart contracts, international payments, and more.
- Mining is very expensive and requires specialized powerful hardware
Bitcoin Cash (BCH)
Bitcoin Cash, introduced in 2017, has one key difference from the original Bitcoin and that is its block size: 8 MB. Bitcoin has a block size of 1 MB, which means Bitcoin Cash offers a faster processing speed
- Faster processing speed
- The average Bitcoin Cash transaction fee is $0.067
- Not completely decentralized
- Expensive like Bitcoin mining
- Lower productivity
Cardano, co-founded by Charles Hokinson, is an “Ouroboros Stakeofproof” cryptocurrency created with a research-driven approach by mathematicians, engineers, and cryptography experts. Due to rigorous extensive testing, peer-reviewed research, and the author of 90 papers on blockchain technology, Cardano seems to stand out among its peers in terms of proof-of-stake as well as other key features. and other major cryptocurrencies.
- Supported by a global academic community of researchers and scientists contributing to the development of blockchain
- Much more scalable with a current capacity of 257 transactions per second
- Intended to bring data interoperability allowing to seamlessly interoperate with other cryptocurrencies and their infrastructures
- Not fully implementing all proposed ideas
- Massive Competition from Ethereum to EOS and NEO to Fusion
Stellar is an open blockchain network that is focused on money transfers. Its network is designed to make money transfers faster and more efficient, even across national borders. Time-Consuming transactions between banks and investment firms can now be done almost instantly with no mediators and low transaction fees.
- More decentralized
- Strategic partnerships with more than 30 banks and with organizations such as Deloitte and IBM
- Fierce competition with Ripple
NEO, formerly known as Ant shares and developed in China, is actively looking to become a major global crypto player. It focuses on smart contracts (digital contracts) that allow users to create and execute agreements without using an intermediary. The main feature that investors find appealing is the similarity between Ethereum and NEO.
- Can do 10,000 transactions per second
- Supports multiple languages like C++, C#, Go, and Java
- Large market base in China and Asia
- Supported by the government
- Competitors Ethereum, Cardano, EOS
IOTA, or Internet of Things Applications, doesn’t work with a block and a chain; it works with smart devices on the Internet of Things (IoT). This allows communication between different objects using sensors, via the Internet. IOTA is committed to making this technology more secure, transparent, and scalable. Its protocol is called Tangle.
- Zero transaction fees
- Infinite scalability
- The success of IOTA depends on the success of the Internet of Things (IoT), which makes its future more unpredictable.
- Recently discovered a security issue with Tangle
- Fierce competition with capable big IoT players
EOS, created by Dan Larimer, is building a platform for developers to build decentralized applications and smart contracts, but with a huge improvement in technology.
- More scalable than Ethereum
- Use advanced mechanics (Authorized Proof Stake + Byzantine Fault Tolerance) 10,000100,000 transactions per second
- Supports multiple languages including C++
- Experienced team with a proven track record
- Unpredictable because it hasn’t launched yet
After reading this guide, you will be more familiar with the most popular cryptocurrencies in trading and technology and the different cryptocurrencies that exist. You know how they differ and you understand some of the pros and cons of each. This puts you in a much better position to start doing more in-depth research and making your own decisions on each issue.
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