Types of Cryptocurrencies


Jack Israel, Senior Staff Writer

Cryptocurrencies have become a topic that has been blasting the media all over the world. Many have developed a growing interest in the many different types of cryptocurrencies. 

Here are some of the most popular cryptocurrencies:

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Bitcoin (BTC): Bitcoin was the first cryptocurrency to be created using blockchain technology. It is currently the top cryptocurrency by market cap and it makes up nearly half of the crypto market. Due to the increased interest of investors worldwide, Bitcoin has experienced surging prices. Bitcoin set up the basis of the technology for other cryptocurrencies that has since followed in its footsteps.

Ethereum (ETH): Ethereum also operates on blockchain technology, but it has a few more uses than Bitcoin. The currency for Etherium are Ethers. Ethereum is the second-largest cryptocurrency by market cap following Bitcoin. Ethereum has caught the eyes of many investors due to its non-fungible tokens (NFTs) that are based on the Ethereum blockchain. NFTs are digital assets that hold value. In addition, Ethereum uses smart contracts, which set up terms of agreement between the buyer and seller through cryptography. This ensures that both sides of the trade fulfill the wanted task in order to be rewarded with their Ethers. Ethereum enables people to fully utilize blockchain technology to their advantage, and has many legitimate uses for blockchain technology beyond solely speculative investments.

Dogecoin (DOGE): Dogecoin was initially started as a meme directed towards the other cryptocurrencies. The Shiba Inu dog became the mascot of the cryptocurrency and the face of the meme. Dogecoin gradually became used more as a digitized payment rather than solely an investment, making it so that payments can be made more effective than in traditional ways. Its value has soared due to the interest of prominent figures in the industry like Elon Musk and Mark Cuban. 

See the source imageSee the source imageLitecoin (LTC): Litecoin is Bitcoin’s top competitor, and it was created to become a better version of Bitcoin. The blocks in Litecoin, as well as the speed of its transactions, are substantially faster than those of Bitcoin. Litecoin also uses a different mechanism that makes the ways of blockchain easier for individuals. Litecoin is an emerging cryptocurrency that has made a real impact in the crypto industry.

Cardano (ADA): Cardano was created by one of the original founders of Ethereum, and was formed based on what tweaks this founder had wanted to make to Ethereum. Specifically, Cardano was designed off of what Ethereum lacked. It is said that the blockchain technology utilized by Cardano has the ability to do more than the abilities of Ethereum. Cardano’s technology is based on extensive research that is shown in its workings, and it is often referred to as a “third-generation blockchain” due to its advanced technology. Cardano’s main purpose is to utilize a proof-of-state (PoS) blockchain contraption, which makes its processes much more secure while using less energy. It is sought as a new and improved Ethereum that tackles issues of scalability, flexibility, and security with the other cryptocurrencies. 

See the source imageTether (USDT): Tether was one of the earliest founded groups of cryptocurrencies named “stable coins.” The purpose of these “stable coins” is to reduce the volatility that is often seen in numerous other cryptocurrencies. This is meant to attract many buyers as the volatility of many cryptocurrencies is something many investors want to steer clear of. Tether’s goal is to integrate the benefits of cryptocurrencies as well as government-issued currency that reduces fluctuations.

See the source imageBinance Coin (USD): Binance Coin is one of the largest cryptocurrencies. Although Binance ran on the Ethereum blockchain when it first started, in 2019, Binance launched its own blockchain, which is still in current use. Similarly to the function of Ether on Etherium, BNB is used for all of the operations that Binance offers. Binance was inaugurated after an Initial Coin Offering (ICO), where all 200 million of its coins were mined. Binance has a repurchase plan called “burning” where 20% of its profits are used to repurchase BNB coins every quarter so that the value of BNB is maintained. Then they are all burned (permanently destroyed) until 50% of their currency is purchased again. This process ensures that there will always be 100 million BNB coins, of the 200 million that was originally mined, in circulation to help sustain a high value for this cryptocurrency. Binance has been immensely successful with its partnership with Asia’s live streaming platform called Uplive, which uses BNB coins as virtual gifts, helping make Binance Coin one of the most used cryptocurrencies. 

As Fintech is a dominating industry, numerous different cryptocurrencies have been created that have distinguishing features diverging from each other. However, many of these cryptocurrencies have very similar features as well. Regardless, it is necessary to understand the distinctions between the different types of cryptocurrencies before messing around with them.