Cryptocurrency has made a lot of changes in the world as we know it. Years ago, the idea of a digital currency seemed far-fetched as a legal tender that did not exist in any real form. Can you imagine that?
However, the result is that the current reality is much more than previously imagined.
Today Cryptocurrencies like Bitcoin have become more than just a form of digital currency used by individuals who are used for trading and shopping on websites with ease.
On the other hand, Bitcoin and different types of cryptocurrencies have attracted us to re-analyze their relationship with money.
Unlike fiat currency, which derives its value from an underlying asset, namely gold, cryptocurrencies are completely digital and do not exist in physical form.
Due to their decentralized nature, cryptocurrencies are largely unaffected by external factors like politics, government instability, etc.
Therefore, through this mechanism, the free market completely regulates the valuation of cryptocurrencies.
As a result, we have seen how Bitcoin and other crypto coins explode in price just like the previous year and this year.
Most of the investors who want to hedge the value of their assets against the value of other investment assets have turned to cryptocurrencies as the best future asset store.
What is it about this mysterious digital currency that has everyone confused but intriguing? Let’s see the explanation below:
How Many Types of Cryptocurrencies Are There?
Before we analyze more deeply about cryptocurrencies, we must first know how many types of cryptocurrencies are on the market.
As of September 2021, it is determined that a total of approximately 6,500 types of cryptocurrency coins are in circulation.
For new investors, this can be a great opportunity because the unregulated nature of cryptocurrency means that almost everyone is free to issue their cryptocurrency.
Even Facebook and the rest of the country have caught up to crypto rhythms to take advantage of this new development.
However, given the highly volatile nature of the crypto industry, not all of them are successful. Many of these new crypto projects are destroyed before successfully launching on the market.
If you are thinking about investing in crypto, consider it and stick to the basics.
For example, established cryptocurrencies like Bitcoin and Ethereum have stood the test of time and are quite solid investments to consider when investing in crypto.
If we remember, in 2017, the Crypto market price skyrocketed (Bubble). Many amateur investors make the mistake of taking advantage of a volatile market.
As a result, most beginners usually end up with big losses and cannot smoke their kitchen, aka going bankrupt for seven generations.
What Are the Types of Cryptocurrencies?
Now that you have a bit of an idea of how cryptocurrencies work let’s look at the types of cryptocurrencies available in the market.
Given the many new cryptocurrencies under development, we have included the most relevant examples.
Considered by many as the crypto mother that started the crypto world, Bitcoin was developed by the mysterious Satoshi Nakamoto in 2009 after the subprime mortgage crisis.
In his paper, Nakamoto argued that the unregulated nature of cryptocurrencies and the limited supply ensured that Bitcoin would be inflation-proof.
In recent years, Bitcoin has become a prima donna with increasing acceptance of Bitcoin worldwide.
Bitcoin’s ability to facilitate the rapid transfer of funds to any part of the world has been a game changer in the cryptocurrency market.
Ethereum is one of the popular cryptocurrencies that rose to prominence alongside Bitcoin.
The second most popular crypto behind Bitcoin, Ethereum, is described as an open-source platform for decentralized applications and projects.
Unlike Bitcoin, which is primarily used as a medium of exchange, Ethereum builds on Bitcoin technology by offering enhanced functionality.
Apart from facilitating payments, Ethereum can also be used to develop programmable transactions.
It has been used to great effect for the creation of smart contracts powered by Ethereum.
These contracts can function autonomously and make decisions based on predefined parameters.
For example, a smart contract could be programmed to initiate shorting of a stock or currency when the price increases a certain amount.
It can also be used to automatically take long-term positions when the price of a particular asset falls.
The inherent volatility of the crypto market has discouraged investors from taking up currencies like Bitcoin.
Given how market conditions can change instantly, millions can be won or lost in just a few seconds.
Because it is based on this, that has given rise to the introduction of what is called stablecoin.
A different type of cryptocurrency that pegs its value to real-world currency or other assets.
Tether is specifically designed to bridge the gap between fiat currencies and cryptocurrencies.
By pegging its value with USD, Tether has maintained a fairly stable valuation over the years.
- Bitcoin Cash
Known as an altcoin or alternative cryptocurrency, Bitcoin Cash is very close to traditional Bitcoin. This is what makes the difference between Bitcoin and Bitcoin Cash.
Bitcoin Cash holds the historical distinction of having successfully completed a Bitcoin hard fork relatively early. A hard fork occurs when radical changes are made to a blockchain network.
In the case of Bitcoin Cash, the block size is increased, allowing more transactions to be processed in a shorter period.
- Bitcoin SV
Another offshoot of Bitcoin, Bitcoin Satoshi Vision or SV, takes Bitcoin back to its roots by restoring the original Bitcoin protocol.
This is done to remain stable at all times. All of them will enable miners to plan their mining activities better.
- Coin Binance
Unlike other cryptocurrencies, Binance coins are used to buy and sell pure cryptocurrencies on the Binance cryptocurrency exchange.
However, along with its development, Binance Coin can currently be found in many crypto markets worldwide to be traded and used as an investment asset.
One of the main competitors of Bitcoin is Litecoin. Mining Litecoin is quite interesting, as the first miner who successfully verifies a block is rewarded with 50 bitcoins.
The difference from its competitors is that Litecoin generates more coins and has a faster transaction speed.
The main appeal of Bitcoin and other cryptocurrencies lies in their decentralized and unregulated nature, which allows anonymous transactions.
But government crackdowns and technological advances have meant that cryptocurrencies no longer offer such protection.
Monero aims to solve that problem because of its focus on secure encryption and other security measures.
Originally intended to be Facebook’s first contribution to the crypto market, analysts anticipate that Libra will change the world just like Bitcoin did.
Supported by millions of users and with a truly global reach, Libra represents the future of cryptocurrency.
However, government oversight and regulatory requirements have hampered plans for a 2020 release.
Conclusion Types of Crypto Coin Types
Cryptocurrency has many types; we can only explain some things depending on what and how it is used.
The types of crypto above are only a small part of the many types of cryptocurrencies circulating worldwide.
However, the explanation above gives insight into the various types of crypto coins. I hope it is useful.