Different Types of Cryptocurrency Spotlight
Are you curious about the different types of cryptocurrency on the market? While there is a wide range of these crypto coins and tokens, which are the best investment options? We will spotlight these different types of cryptos to help you make a better decision about your money.
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What You Need To Know About Crypto
Before you get started, here are some basic facts about cryptocurrency. These digital currencies have been at the forefront of everyone’s mind in the financial industry. Since money allows peer-to-peer payments without needing a bank, they have gained in popularity. All of the coins and tokens use blockchain technology that acts like a digital public ledger. Each transaction’s information is stored in the ledger and will receive a unique “hash” or identity. One of the most successful types of cryptocurrency is Bitcoin. This digital currency has put all crypto on the map. With that, many in the financial world wonder whether these digital assets have the ability to decentralize the current banking system.
Related: What is Bitcoin Cash?
The Different Types of Cryptocurrency
Since blockchain technology is open source, any software developer can use source code to create a type of digital currency. In fact, many developers have done that in the past. Some experts have estimated there are over 10,000 different digital currencies in circulation at the moment, and that figure is expected to increase.
Why is there a surge? It is easy to create a new cryptocurrency. All you need to do is design source codes that you can use for the tasks. For example, many people have used the Ethereum network to create their own personal digital coins. Those assets are called “forks” in the source codes and can be used to create new crypto. There are even forks in the Bitcoin source code. In 2017, Bitcoin Cash was developed because of a fork that allowed more transactions to be recorded in a single blockchain.
With the rising crypto prices, many developers are trying to get into this digital asset world. But many of these new cryptocurrencies will eventually disappear after a few years. With that in mind, you must be careful when using or purchasing any digital currency.
Main Types Of Cryptocurrency
As you may already know, Bitcoin was one of the first cryptocurrencies to be created. Aside from Bitcoin, all other digital currencies are known as altcoins. While many people feel confident using Bitcoin, there are others that you will want to discover. Some of these altcoins are known for their functionality, privacy, and scalability.
There isn’t one “best” cryptocurrency in the market. They all have different features that may benefit or disadvantage you. Here is a look at some of the top digital coins in the current marketplace.
This digital coin is the first decentralized currency that uses blockchain technology to facilitate transactions. Instead of using a bank to control the money, Bitcoin utilizes a blockchain as a public ledger for all its transactions. That ledger allows individuals to prove their Bitcoin is legitimate and prevent fraud in the system. This decentralized currency enables peer-to-peer transactions, which are less expensive and faster than traditional methods.
Another popular option is Ether. This digital token can be used to make transactions on the Ethereum network. Ether also uses blockchain technology that enables other decentralized applications and creates smart contracts. The software can be distributed on something other than the traditional app exchanges, like Apple App Store or Google Play Store. Ethereum is known as both a software development platform and a cryptocurrency.
Tether is a stablecoin that is tied to the U.S. dollar. With this cryptocurrency, you can have the best of the digital asset world with the currency’s stability backed by a sovereign government.
Related: Where Can I Pay With My Bitcoin?
You can find Balance Coin on the Binance cryptocurrency exchange platform. This digital coin is valuable for trading. It can be used as currency, but many people use the tokens to pay fees and to build apps on Binance’s DEX.
Like Tether, USD Coin is another stablecoin, and the U.S. Dollar backs it. This digital currency is hosted on the Ethereum blockchain. With this currency, it is a fully digital dollar that has the stability of U.S. fiat currency. However, the coins’ owner doesn’t have to have a bank account or live in the country. USD Coin is a coin that you can spend similarly to the fiat currency.
Related: How To Avoid Crypto Theft?
A Wide Range of Cryptocurrencies
Keep in mind that these types of cryptocurrencies are just the tip of the iceberg. There are plenty of other digital coins making their way to the market. Every year, there are thousands of new coins – all looking to unseat the top crypto, Bitcoin. You can use many of these digital currencies for a wide range of applications.
Bitcoin continues to be the most popular crypto, but some developers are looking for new ways to innovate the current blockchains and find new uses for them. Over the years, those developments have led the way to other platforms, such as Ethereum. For many investors, those coins hold plenty of appeal. There is no longer a need to keep your funds in a traditional bank or pay exuberant fees to access your money. A decentralized blockchain is working towards removing third-party from all transactions and making payment options a faster and more secure process.