Cryptocurrency is an online currency that can be used for purchases and other transactions. Cryptocurrency uses encryption technology to secure transactions and control the creation of new units. The first cryptocurrency was Bitcoin, which was created in 2009. Since then, hundreds of other cryptocurrencies have been developed.
Some are easier to use than others, and some are intended for specific purposes such as making payments or storing value while others are intended to help users create their own blockchain-based apps on top of an existing network like Ethereum’s “Ether” token or NEO’s “GAS” token.
In this guide we’ll cover everything you need to know about 10 popular types of cryptocurrency along with how they work:
What is Cryptocurrency?
Cryptocurrency is a digital currency that uses encryption to secure transactions and control the creation of new units. It’s also known as crypto, altcoins (alternative coins), or tokens. Cryptocurrency is used as a medium of exchange in peer-to-peer transactions between individuals, businesses and organizations.
How does cryptocurrency work?
Cryptocurrencies are based on blockchain technology, which is a public ledger that records all transactions that take place across its network. It does this by updating itself with new information every time a transaction occurs; this process makes it possible for people to see what’s happening with their money at any time.
What are the Different Types of Cryptocurrency?
- Coins and Altcoins: These are the most popular types of cryptocurrency, which you can buy and sell on exchanges like Coinbase or Binance. Coins are often referred to as “currency coins,” because they have their own blockchain and can be used as payment systems within platforms such as Ethereum or Litecoin.
- Tokens: Tokens are digital assets that represent something else (like shares in a company) or allow users access to certain features on a platform (like paying for services). There’s no limit on how many tokens can be created–they’re just lines of code that automatically generate when someone sends ether into an ICO smart contract address through Ethereum’s network.
Well Known Cryptos
Bitcoin
Bitcoin is a cryptocurrency. It’s the most valuable cryptocurrency, with a market cap of over $100 billion (as of January 2019). Bitcoin was created by Satoshi Nakamoto in 2009 and was the first decentralized digital currency.
Bitcoin has a finite supply of 21 million coins, which makes it one of the few cryptocurrencies that can’t be inflated by any central authority like governments or banks.
Ethereum
Ethereum is a blockchain platform for decentralized apps and smart contracts. It can be used to create new tokens and cryptocurrencies, but it’s also used by other cryptocurrencies like Ethereum Classic, ZCash and Augur.
Ether (ETH) is the currency of Ethereum; it’s used to pay for transactions on the network. The price of ETH changes depending on supply and demand like any other cryptocurrency. If more people want to buy something with it than sell it off, then its value will increase.
Binance Coin
Binance Coin is a cryptocurrency that was launched by Binance, a popular cryptocurrency exchange. It was created to help the company pay for its fees and services on its platform.
In addition to being used as an internal payment method, Binance Coin can also be used as an alternative means of payment for other services offered by Binance such as Launchpad (a token sale platform) or Info (a data portal).
Tether
Tether is a cryptocurrency token that is backed by the US dollar and allows you to store, send and receive digital tokens that are 100% backed by the US dollar in a 1:1 ratio.
The basic idea behind Tether is that it’s an easy way for people who don’t want to deal with banks or other financial institutions to hold their money on an exchange without having to worry about losing their funds if something goes wrong.
Solana
Solana is a new blockchain that aims to solve the scalability problem. It’s built on a new consensus algorithm called Proof of History, which uses a block’s hash to verify its existence. This allows for faster processing time, as it doesn’t have to validate every transaction included within that block.
Solana is based on distributed ledger technology, but it differentiates itself by using Proof-of-History (PoH) as its consensus algorithm instead of Proof-of-Work (PoW) or Proof-of-Stake (PoS).
XRP
XRP is the native cryptocurrency of the Ripple network. XRP was created to be used by financial institutions, and it’s designed to facilitate cross-border payments between banks.
XRP can also be used as a bridge currency between other cryptocurrencies, like Bitcoin or Ethereum. This means if you have BTC but want to buy ETH with it, you could convert your BTC into XRP first and then use that XRP to purchase ETH. You don’t need to exchange directly for each other; this allows for easier liquidity in trading pairs between different cryptos than would otherwise be possible.
Cardano
Cardano is a blockchain platform that’s been built from the ground up to solve the problems facing today’s cryptocurrencies.
Cardano was created by Charles Hoskinson, who is also one of the co-founders of Ethereum. He has said that Cardano will “change the world” and “fix all these things that are wrong with cryptocurrency.”
USD Coin
USDC is a stablecoin backed by the US dollar. It’s not really a cryptocurrency, though; it’s an ERC-20 token on the Ethereum blockchain. This means that it doesn’t have its own blockchain or network and instead relies on Ethereum for its functionality.
USDC was created by Circle Internet Financial Ltd., which also created another popular stablecoin called USDT (or Tether). Unlike Tether, however, USDC actually has collateral backing it up: 1 USDC is equal to 1 USD in value at all times–or as close as you can get with cryptocurrency anyway.
LUNC
Terra Classic is a new cryptocurrency, designed to be the standard currency for everyday transactions. Terra Classic is based on Bitcoin and Litecoin, but has some major differences. Some of these differences include transaction times and confirmation times, difficulty adjustment times, and block rewards. Its current LUNC price is $1.24 and has a market cap of $284 million.
Shiba Inu
In fact, the Shiba Inu has become so popular on the internet with its crypto-related meme popularity that it is being featured on some crypto projects. One in particular is a new cryptocurrency called Dogecoin whose logo is a picture of Kabosu, a Shiba Inu from Japan whose photo was tweeted and then went viral.
This asset also works in pairing pegged to the US Dollar such as SHIB USDT and can be traded against other cryptocurrencies.