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What are the Different Types of Cryptocurrencies?

by John
types-of-crypto-currencies

There are a lot of different types of cryptocurrencies. Each of these has specific features that make it stand out. For example, BitCoin is the first cryptocurrency that was invented using blockchain technology. Apart from being first, it is also one of those cryptocurrencies that are ranked at the top of crypto exchanges and markets.

This currency has a huge market cap of $795.31 Billion. But, it has a limited supply and there is a huge demand that is putting more and more pressure and is creating a gap between demand and supply. That is leading to the inflation in the price of this coin. Below is a list of the top cryptocurrencies, assets, objects, and meme or joke coins. 

Currency

  • Bitcoin (BTC): As mentioned above, Bitcoin is the first cryptocurrency that was invented and was made public so that it could be traded and used. It revolutionized the world of digital trading. It has one of the biggest market caps in the world and is ranked at the top of financial markets and crypto exchanges. But it is known as one of the highly volatile cryptocurrencies. This is because its price goes up and down, which has resulted in losses of billions of dollars. 
  • Ethereum (ETH): Ethereum was the first alternative to Bitcoin that had all the features of Bitcoin such as security, fraud prevention, smart contracts, decentralized blockchain, and more. It has the second biggest market cap among cryptocurrencies. The current price of Ethereum is about $3,200. Similar to the BTC it had many ups and downs for the past few years. But now, it is known as a stable coin because its price has been stable for a long time. 
  • Litecoin (LTC): Litecoin or LTC was launched in 2011 after the initial success of Bitcoin. This coin was created by Charlie Lee, who was a former MIT alumnus and Google employee. Litecoin has similar features as bitcoin but it is also different from bitcoin because it has faster encryption that allows easier and faster block generation. It is also known as the stable coin because it has held its price for a long time. 
  • Cardano (ADA): It is one of the latest editions of the blockchain currencies with improved encryption algorithms and better block generation methods. This cryptocurrency uses “Ouroboros proof-of-stake” methods instead of the Proof of Work methods for the encryption and validation of the transaction. That makes it more effective and faster. It is currently one of the top cryptocurrencies that are being traded in exchanges and markets all over the world. 
  • Polkadot (DOT): Polkadot is different from all of the other cryptocurrencies because it offers a different approach to validating the transaction and the creation of new blocks. The Polkadot uses a POS or proof of stake method for the validation and generation of new blocks on the blockchain. It is also known as one of the best cryptocurrencies that is a favorite choice of many traders. It is ranked among the top traded cryptocurrencies on all of the exchanges in the world. 

Crypto

Assets

Apart from cryptocurrencies, there are a lot of other types of crypto assets. These include crypto tokens and Defi. The crypto tokens serve a specific purpose, for example, initial coin offering (ICO) which represents a stake in the blockchain of that coin. These tokens are related to the value of a company, they are known as security tokens. From this example, you can understand the purpose of these tokens and why they are used. Each token is created and used for a similar purpose that money serves. 

Some of these tokens have a different purpose such as the Storj tokens, which allow people to share information and files over the decentralized network. This is done to ensure the safety of a document. There is also a Namecoin token that works as DNS or domain name service for decentralized network access. These types of tokens that serve other purposes are known as utility tokens. 

Object

There are also a lot of objects that are sold using blockchain technologies, which increases the point of cryptocurrencies. These are types of non-fungible tokens. Also known as the NFTs. Basically, these are token non-interchangeable units of data. This data is stored on the blockchain and is owned by a person. People are buying these NFT objects. To understand the concept of NFTs better, consider this example. A person buys a painting such as the Mona Lisa. It is a physical painting, and that person pays a lot of money for that. But he sells that sometimes in the future and makes a profit from it. Or he/she lets others use it for art galleries and exhibitions and makes some profits from that. 

NFT

The same goes for the NFTs. People buy NFT tokens that have some value or may have some value in the future. For example, a recent online meme was sold for more than $500 million in NFTs. Now, the owner of that meme on a blockchain can decide to share it with the world, charge people a certain amount for its rights, or sell it to someone who wants to pay more. This is how the recent trade of NFTs has progressed. It has become a huge market and a lot of crypto exchanges, and crypto enthusiasts are saying that it would become one of the largest types of arts and would serve as a way for the artists to make a profit. 

Meme Or Joke Coin

There are a lot of cryptocurrencies that were created as a joke but became very popular and successful. These currencies also offer some features that are unique to them or have been updated in a way that makes them faster and better as compared to the old cryptocurrencies. The DogeCoin, Shiba Inu, Mona Coin, Dogelon Mars, Banano are some of the examples of these meme coins or joke coins.

Dogecoin

Conclusion

There are multiple types of crypto assets that a person can have, these include crypto tokens, currencies, objects, and meme coins. Each of these has the potential of trade or serves a purpose.

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