Cryptocurrencies are not just cool and secure iterations of virtual currency but also the representation of new revolutions in finance. However, Bitcoin is the only term that emerges prominently in discussions around cryptocurrencies. On the other hand, you can come across a wide variety of cryptocurrencies in the form of coins and tokens. Therefore, the interest in the types of cryptocurrency has been gaining considerable levels of momentum in recent times.
Many people don’t want to settle for the different altcoins developed along with the foundations of Bitcoin. Rather than looking for the altcoins only, you need to look for the types of cryptocurrency solutions in different areas, such as stablecoins, decentralized finance, and other variations. The following post will help you find an outline of the different types of cryptocurrency with popular examples for each category.
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Different Types of Cryptocurrency
The discussions regarding types of crypto such as Bitcoin and Ethereum suggest a prolific track record of increasing in value over the course of time. On the other hand, recent dips have wreaked havoc in the market, calling out the aspect of trust and credibility in cryptocurrencies. You have the popular choices as well as the ones with limited popularity, albeit with lesser predictability and improved speculation.
Now, it is important to wonder about the specific criteria for grouping crypto types into multiple categories. The utility of cryptocurrencies serves as a direct answer to your question. Different cryptocurrencies have unique utilities along with multiple founders with different visions for the future of the cryptocurrency. Based on a general overview of the crypto market, you can find the following notable categories of cryptocurrency in the market right now.
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List of Most Renowned Cryptocurrencies
When you think of a discussion on cryptocurrency types, you are most likely to think of Bitcoin. You have the other popular altcoins inspired by Bitcoin, which have developed their own place in the crypto ecosystem. In 2009, Bitcoin started the crypto revolution, and today, you have thousands of cryptocurrencies with varying sources of value. On top of it, the vague impression regarding the potential of smaller cryptocurrencies often calls for an emphasis on the most popular choices. Here is an overview of some of the most popular types of crypto you can find today.
Any discussion on cryptocurrencies would feature at least one mention of Bitcoin, the original cryptocurrency. It is the most popular cryptocurrency in the world and enjoys the highest valuation. However, Bitcoin has been through extremely uncertain bouts of volatility in many instances in its history. It developed as a peer-to-peer cash transfer system and has served as the inspiration for a completely new virtual currency ecosystem.
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The second choice for a top cryptocurrency list would obviously point at Ether or ETH, the native cryptocurrency of the Ethereum network. ETH is one of the significant crypto assets as Ethereum serves as the open-source blockchain for developers to create decentralized applications and other cryptocurrencies. Most important of all, it is the second-biggest cryptocurrency in terms of market capitalization. The value of Ether has grown substantially with the massive expansion of the decentralized applications ecosystem on Ethereum.
The official cryptocurrency of the Ripple blockchain, a digital payment network, XRP is also one of the renowned cryptocurrency types in this list. It has been tailored for digital payments and offers a faster as well as more efficient tool for powering up global payments. Furthermore, Ripple and XRP would serve third-party development use cases for other applications of XRP.
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The next entry among popular crypto types would also bring choices like Cardano into the equation. Cardano blockchain uses the ADA cryptocurrency, and the unique highlight of the cryptocurrency is the consensus protocol. The peer-reviewed Ouroboros blockchain protocol serves as an effective approach for achieving decentralization while maintaining better security and scalability.
5. USD Coin
The discussion on different types of cryptocurrencies would also draw attention to USD Coin. It actually claims to be the first digital dollar with the backing of the US Dollar. The USD Coin ensures better stability in comparison to other cryptocurrencies, thereby offering better scope for digital payment use cases. Therefore, the USD Coin is a suitable choice for adopting cryptocurrencies without the concerns of losing value.
The Chainlink blockchain with its LINK cryptocurrency also qualifies as another top addition among popular cryptocurrencies. You should notice that LINK leverages real-world data alongside off-chain computation in an efficient manner. Subsequently, the blockchain ensures better security and reliability for crypto transactions to all users.
The list of stablecoins in popular types of cryptocurrency would obviously include the name Tether or USDT. It is a stablecoin and probably the first cryptocurrency to have the backing of a fiat currency, i.e., the US dollar. In addition, you should also note that Tether is actually the largest stablecoin in terms of market capitalization.
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Stellar is another cryptocurrency network with a popular native cryptocurrency, the Lumen or XLM. The crypto network has been tailored as an open network for storage and management of money. At the same time, the platform offers flexibility for creating, sending, and trading digital currencies.
Dogecoin or DOGE is one of the most renowned cryptocurrency types, created as a parody of cryptocurrency. However, the meme-inspired cryptocurrency gained a radical growth in value throughout early summer 2021. Even the CEO of Tesla, Elon Musk, expressed his opinions on Dogecoin and ultimately helped in driving the growth of Dogecoin’s value and popularity.
The final addition among the popular types of cryptocurrency would draw attention to Polkadot. The blockchain network focuses on improving the seamless exchange of information and transactions between blockchains. As a result, it would play a crucial role in driving scalability of blockchain networks. The platform has improved standards for data and identity security while allocating complete control to the hands of users.
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Some other Popular Cryptocurrencies Are
1. Decentralized Finance
Decentralized finance, or DeFi, is also one of the platforms for identifying answers to “How many types of cryptocurrency are there?” especially for the integral need for cryptocurrencies in DeFi. The simple objective of decentralized finance revolves around removing intermediaries such as banks and other financial intermediaries. For example, imagine accessing financial services such as loans and investments without contacting the bank or any financial institution.
Cryptocurrencies have the potential for automation and digital transformation of various aspects of the financial system. Just like the different variants of accounts and tools in traditional finance, cryptocurrencies will serve an important role in the emerging DeFi ecosystem. For example, people can borrow crypto loans against their cryptocurrency holdings or earn interest on their cryptocurrencies.
The implications of crypto types in the DeFi ecosystem present some conclusive value advantages. You can ensure faster and pseudonymous transactions with a consistently accessible market developed on the principles of transparency.
2. Digital Gold
Digital Gold is an interesting concept in the discussions on cryptocurrencies, which resemble actual gold in terms of storing and increasing value. Just like the limited supply of gold on earth, digital gold cryptocurrencies will also feature a limited supply. The best example of such types of crypto refers to Bitcoin.
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3. Digital Cash
The variants of cryptocurrencies would also include the utilities of digital cash or virtual money, which you can use for purchasing products online. Initially, Bitcoin had developed as a peer-to-peer cash system. On the other hand, speculations regarding the utility of Bitcoin fuelled the creation of a new cryptocurrency, Bitcoin Cash.
The variation of Bitcoin emerged prominently because of the volatility of Bitcoin to serve as a credible cryptocurrency. As a matter of fact, the basic notion for Bitcoin Cash emerges from the possibilities of volatility in cryptocurrency valuation. Bitcoin Cash is one of the renowned entries in the top cryptocurrency list with dedicated services for digital payments.
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4. Decentralized Applications
The utility of the popular crypto types draws some prominent references to decentralized applications. Ethereum is one of the notable examples of a blockchain network operating with a native cryptocurrency. It provided a programmable foundation for developers and established the foundation for a new breed of decentralized applications.
Therefore, you can note how the different types of cryptocurrency alternatives can serve additional use cases beyond the scope of finance. For example, Ethereum-based NFTs have been credible highlights among decentralized applications and their use cases. Other examples of similar cryptocurrencies include Polkadot and Cardano.
5. Stablecoins and Strange Cryptocurrencies
The most notable entry among answers for “How many types of cryptocurrency are there?” would refer to stablecoins. They are developed as the ideal solutions to the price volatility in cryptocurrencies. Stablecoins are generally pegged against a fiat currency or a reserve to ensure a fixed price. USDT and USD Coin are popular examples of stablecoins. On the other hand, you can also come across some strange cryptocurrencies. For example, Putincoin or Whoppercoin are creative takes on cryptocurrencies.
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An overview of the different cryptocurrency types is essential for any individual interested in cryptocurrencies. Investors are actively seeking financial opportunities with cryptocurrencies. However, cryptocurrencies can serve many other additional functionalities. You can explore the domain of cryptocurrencies to figure out the different variants of cryptocurrencies serving distinct utilities.
For example, you have certain cryptocurrencies facilitating growth in the DeFi ecosystem. On the other hand, you have cryptocurrencies such as stablecoins for driving cryptocurrency adoption. Irrespective of the different possibilities for leveraging cryptocurrencies, the general uncertainty about cryptocurrencies can serve as a formidable barrier. Therefore, it is important to learn about cryptocurrency basics and what you can do with them. Go ahead and start learning more about your favourite cryptocurrencies.
*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. 101 Blockchains shall not be responsible for any loss sustained by any person who relies on this article. Do your own research!