The world of cryptocurrencies can be a confusing one to navigate. It feels like a new cryptocurrency pops up every day, each one touting itself as the “next Bitcoin.” Perhaps you are interested in cryptocurrency but have a long list of questions you want answered first. How many cryptocurrencies are there? What’s the difference between them? Are digital currencies the wave of the future or just a fad? What’s the best cryptocurrency to invest in?
What frustrates a lot of people is the fact that many questions surrounding cryptocurrency don’t have definitive answers. However, if you’re interested in becoming more familiar with the topic, you can start by learning a little bit more about some of the most popular types of cryptocurrency. Read on to discover a helpful list of cryptocurrencies you should know about.
How Many Cryptocurrencies Are There?
Before diving in, it’s important to note that this list won’t be a comprehensive one. It’s also almost impossible to place a concrete digit on the number of cryptocurrencies. Developers create new ones all the time, while some fall off the map without fanfare. Some exchanges, like CoinMarketCap, list more than 6,000 cryptocurrencies, but that number fluctuates frequently. No matter the number, the following are some of the most well-known cryptocurrencies.
Let’s start with the first and most famous cryptocurrency: Bitcoin. This cryptocurrency began in 2009 and runs on blockchain, like most cryptocurrencies. It pioneered the decentralization of digital assets and transactions, creating a new method for organizing personal finance. With a market cap of more than 800 billion dollars (and growing), Bitcoin is the most widely used and recognized cryptocurrency in the world. That indicates staying and buying power in a field filled with so much uncertainty. If you want a digital currency with more stability, Bitcoin makes an excellent choice.
If you’d like more information on Bitcoin, check out What is Bitcoin?
Outside of Bitcoin, Ethereum may have the most name recognition of all cryptocurrencies. This digital currency carries tremendous promise as it’s also a blockchain platform. Many developers have shown a preference for Ethereum since they like some of its applications for non-fungible tokens (NFTs) and smart contracts. One benefit to Ethereum having its own network is that it can forgo app exchanges like the Google Play Store or the App Store from Apple, which take a sizable percentage of revenue. Ethereum has also grown by leaps and bounds in only about five years, which shows sustained popularity.
Litecoin was an early entrant into the cryptocurrency world after launching in 2011. Since it closely followed Bitcoin, many people think the two are nearly identical, but Litecoin separates itself in several ways. One of those ways is through a faster block generation rate, which means that it confirms transactions in a shorter amount of time than Bitcoin. With that in mind, more merchants have jumped on board with Litecoin, making it one of the most popular cryptocurrencies in the world. As a creation of a former Google engineer and MIT graduate, it has the pedigree to withstand constant market fluctuations.
For major financial institutions, large transactions are expected, which has made them nervous about working with cryptocurrency. That’s where Stellar can help. Stellar uses an open blockchain like many other cryptocurrencies, but it aims to help investment firms and banks by making enormous transactions easier. Those transactions can happen in an instant with Stellar instead of the days it would take otherwise. They also take place with minimal cost. However, to use the network, users need to make transactions using Lumens, which is the Stellar network’s currency.
Tether has an advantage over many other cryptocurrencies because it’s what’s referred to as a stablecoin. In other words, it’s directly tied to fiat currency. That means that the value of Tether is equal to the U.S. dollar or another fiat currency like the euro. Cryptocurrencies have a reputation for being volatile as their values grow or shrink dramatically over time. With the fiat currency connection, Tether has the potential to become more stable. For anyone who may shy away from digital currency due to its unstable nature, Tether might be a good entry point.
6. Binance Coin
Binance is one of the largest crypto exchanges out there. If you want to trade on that exchange, you can do so through Binance Coin. Since the Binance Exchange charges fees for exchanging other types of cryptocurrency, many investors use Binance Coin to pay for those fees. If done in this way, people get a discount on those fees. Binance Coin got its start in 2017 as a type of token found on the Ethereum network before setting out on its own. In only a few years, Binance Coin has grown in popularity and value as one of the most used digital currencies in the world.
Cardano likewise started in 2017, and though it’s a latecomer to the crypto market, it was one of the first to use proof-of-stake validation. Proof-of-stake is a method that shortens transaction time while also making more efficient use of the energy needed for verification. In a sense, this means that digital currencies like Cardano are more environmentally friendly. One of the founding members of Ethereum helped create Cardano, so it should come as no surprise that Cardano operates similarly to Ethereum.
Dogecoin started as a joke in 2013. It all began with software engineers who wanted to point out the ridiculousness of the volatility of cryptocurrency. Strangely enough, Dogecoin caught on thanks to its meme-like nature. Represented by a Shiba Inu mascot, Dogecoin has gained traction and popularity due to Elon Musk‘s support. This cryptocurrency behaves similarly to Bitcoin, but one significant difference is that it has no cap on the number of coins people can create. That makes Dogecoin a bit more unstable as its value can decrease as users generate more coins.
Ripple is a payment processing company that created its own digital currency called XRP. Users can utilize this XRP on RippleNet, which is a digital payments platform aimed at financial institutions. Similar to Stellar, it lowers the cost of transactions, particularly when they’re large-scale. It also makes exchanges easier when they involve fiat currencies and other types of digital currency. XRP can also extend short-term lines of credit to users, which is one way this cryptocurrency stands out.
Polkadot is all about cooperation and coordination among different blockchains. Created by yet another Ethereum co-founder, Polkadot only launched in 2020. Through Polkadot, developers can create a blockchain of their own while receiving protection from Polkadot’s blockchain. This extra security measure, referred to as shared security, means newer and smaller blockchains experience a decreased risk of attack from cybercriminals. Polkadot connects different blockchains, helping them work as one to create a more secure and effective network. Though Polkadot is a recent addition to the cryptocurrency world, it has already achieved a market capitalization of over 10 billion dollars.
Investors can find Uniswap on the Ethereum network. One factor that attracts so many people to cryptocurrencies is the decentralized nature of the concept. Uniswap takes it one step further by providing an open-source platform. The open-source code makes it so that any developer or programmer can create a unique exchange all on their own. Uniswap debuted in 2018, and many experts say it’s one to keep an eye on in the years to come.
While blockchains have gained popularity, they do have their shortcomings. Developers created Chainlink to address one of them, mainly connecting outside applications through secure means. By choosing the Chainlink network, developers can have their smart contracts interact with data outside the network. This level of technology has some promising uses, such as monitoring pollution in water sources. When a certain level of pollution is reached through a smart contract, the contract triggers automatic fines or warnings. Outside of future use cases, Chainlink performs well as a basic cryptocurrency.
Another unique digital currency is Monero. This cryptocurrency launched in 2014 and receives support solely based on donations from its vibrant community. Monero emphasizes keeping transactions private. It achieves this by utilizing ring signatures, a technique not found in many cryptocurrencies. This technique ensures total privacy and anonymity for everyone involved in the transaction. In fact, Monero is so helpful at maintaining security and privacy, some people under authoritarian rule have chosen it as their preferred digital currency.
14. Bitcoin Cash
When people look for the next Bitcoin, it’s easy to keep an eye on Bitcoin Cash. To grasp the importance of Bitcoin Cash, it’s essential first to understand what a cryptocurrency fork is. A fork happens when different groups disagree on what changes to make to the code for a digital currency. Since the developing community largely drives the decisions on changes, disagreements can become intense to the point that one group splinters off with a new code. That’s what happened to Bitcoin back in 2017, resulting in Bitcoin Cash. The main difference between Bitcoin and Bitcoin Cash is that Bitcoin Cash significantly increases the block size, which means it can handle more transactions at a faster rate.
TRON also started out on the Ethereum network and acts as a way to share content. Unlike other cryptocurrencies, TRON is a platform dedicated to entertainment and the creation of new content. People who use the platform receive the TRX currency directly. This bypasses the monetization model found on platforms like Google Play. TRON has staying power as well since various large corporations have already partnered with it. Some of those companies include Samsung and the search engine Baidu, which acts like the Chinese version of Google.
16. USD Coin
The USD Coin cryptocurrency shares a significant quality with Tether in that it is a stable coin. The goal of this digital currency is to feature a simple ratio where one USD Coin equals one U.S. dollar. A consortium called Centre manages USD Coin after launching it in 2018. USD Coin received a major boost when Visa announced they would use it to settle transactions on their payment network. With this type of backing, USD Coin may enter the mainstream in the future.
The Tezos digital currency combines many of the features in the above cryptocurrencies. It’s an open-source network with proof-of-stake features used for deploying smart contracts. It also follows a feature called an on-chain governance model, allowing for new additions to the code with support from the community. This model makes it so Tezos doesn’t experience the kind of forks found in other blockchains, enabling a greater level of consistency and stability.
The Growth of Cryptocurrencies Will Continue
While the future of digital currency is far from certain, there’s a growing acceptance that it’s here to stay. One day, cryptocurrency may even become as common as having a checking account or credit card. The future is bright for cryptocurrencies as people use them for more payments. It might not be long before it’s normal for customers to use digital currency to pay for items like a car or pay off student loans. Whether you have a great interest in the subject or you’re just curious about using it for a side hustle, cryptocurrency represents a fascinating world that will continue to grow. In many ways, it offers an intriguing window into what the future may hold.