Cryptocurrencies are virtual currencies, which feature cryptograph security. They are a decentralised currency that acts as a perfect hedge against inflation. The cost-effectiveness and ease of transaction have made cryptocurrencies one of the most talked-about subjects in recent times. But how many cryptocurrency types are there? Is Bitcoin the only major player currently in existence? Or, are there other big names in the market?
Surprisingly, thousands of cryptos exist globally. The following sections mention details about the most popular ones among them.
Cryptocurrency, or crypto, is a virtual asset that circulates without needing a regulatory body. Instead, they are crafted through cryptography techniques, enabling individuals to sell, buy, and securely trade them.
One of the most common ways through which cryptos are created is called mining. This is a complex process which requires solving complicated mathematical puzzles to authenticate transactions on a network. Following this, newly created cryptocurrencies are issued to individuals.
After this, you can use the crypto for trading purposes, purchase goods and services, or exchange them for cash.
Digital currency, such as cryptocurrency, is designed to function as a form of exchange. They let you use apps and games, purchase goods or services, or trade them to generate wealth. That said, there are different types of cryptocurrencies in the market. The most popular types of cryptocurrencies are:
Bitcoin is the oldest and top cryptocurrency in the crypto space. Also called the original cryptocurrency, it was crafted in 2009 under the pseudonym of Satoshi Nakamoto.
Bitcoin uses blockchain technology, allowing users to make transparent P2P transactions. All individuals can view these transactions. However, they remain secured within the blockchain through an algorithm. Moreover, while every user can view transactions, only the owner of a Bitcoin can decrypt it using a private key.
These transactions feature broadcast to the network, and you can easily receive confirmation within 15-20 minutes via mining.
Litecoin is an altcoin which came into existence in 2011. Altcoins feature two components – alternative and bitcoin. In simple words, these cryptos indicate coins that are other than Bitcoin. Similar to other cryptos, Litecoin is a completely decentralised type of cryptocurrency.
To mine Litecoin, you have to solve complicated mathematical puzzles. These are also called hashes, which will assist you in gaining the right to document new transactions to the blockchain. This process is similar to that of Bitcoin.
Further, the miners confirm each transaction block. They use technology-backed computers to confirm each of the blocks and then secure it against the blockchain. After verification, the next block enters. Miners who become successful in verifying the block receive 12.5 Litecoins.
Launched in 2015, Ethereum is an open-source platform-based cryptocurrency. Similar to other cryptos, ETH runs on a decentralised network known as the blockchain. It tracks the transactions and manages Ethereum.
One of the many features of this crypto is that it can power various applications. In addition, Ethereum also offers a wide range of functions, such as smart contracts, dApps, NFTs, DeFi, and more.
You can unlock ETH coins through mining, which requires solving complex mathematical puzzles. However, what makes Ethereum one of the unique cryptocurrency types is that the mining process will soon change. The brilliant minds behind Ethereum have decided to change the “proof-of-work” system to “proof-of-stake”. This change is called “The Merge” and will change how this crypto works.
Zcash is a digital currency that features building on strong science. It allows users to transact safely and efficiently at a lower fee. The addresses of Zcash are either private or transparent. Private addresses begin with a z, whereas transparent addresses start with a t. The address owner can decide to disclose transaction details and z-address with third parties.
In Zcash, the t-to-t transactions work similarly to Bitcoin. This means all details regarding the sender, receiver, and transactions are publicly visible. Many exchanges and wallets rely on t-addresses currently. However, an increasing number of users are moving towards shielded addresses to maximise protection.
Dash is a relatively new cryptocurrency type that came into existence in 2014. This crypto is based on the Bitcoin project, which allows convenient and cheap currency flow. It features many similarities to Bitcoin. However, it also has many features that set it apart, such as its speed.
Like any other cryptocurrency, one can obtain Dash coins through mining. Each time miners successfully solve a mathematical problem, they create a Dash block in the blockchain. This mining process is called Proof of Work, where technology-backed computers solve mathematical problems by a hashing algorithm.
Ripple is not essentially a cryptocurrency but a digital payment network on the basis of a decentralised P2P platform. This is what sets it apart from the other types of cryptocurrencies. Instead of utilising the traditional form of crypto mining, Ripple utilises a unique distributed consensus mechanism.
That said, XRP is the cryptocurrency of Ripple, which runs on its own ledger. You can buy this crypto and use it just like any other currency.
In contrast to Bitcoin, XRP is pre-mined. In simple terms, its ledger creates 100 billion units and releases them in periodic intervals. Ripple owns a portion of these circulating units, which incentivises the crypto to grow.
This cryptocurrency focuses primarily on privacy in its P2P platform. Interestingly, any transaction on this network cannot be linked to a particular individual, as it is fungible. To fulfil its aim of providing anonymity and privacy, Monero relies on two terms – stealth addresses and ring signatures.
A stealth address enables an individual to create a one-time unique public address for every other transaction. That said, every user has to create a private view key and a private send key. This will help them view all related transactions on their accounts.
Meanwhile, a ring signature is a form of digital signature, which users with a private key can sign. When you transact with Monero, your wallet creates a ring out of other users’ keys from the blockchain. This results in anonymous transactions.
Since the launch of Bitcoin, the crypto industry has witnessed a massive surge. Reports state that there are more than 17,000 cryptocurrencies in circulation currently. Here are some of the reasons behind this massive growth:
Also Read: What Is Cryptocurrency: Definition, Types And How Does It Work
Among the thousands of cryptocurrency types circulating in the market, many of them feature little or no value, landing them in the category of memecoins. Thus, before you think of investing in this avenue, ensure to conduct thorough, extensive research.
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Ans: You can buy and sell cryptocurrencies via a crypto exchange. To expedite the process, you need to choose an exchange and sign up with them. After that, you will have to fund your account to begin trading.
Ans: As of June 1 2022, it takes almost 145.1 days to mine one Monero at the present difficulty level and the block reward and mining hash rate. This coin features a hash rate of 42,000 H/s while consuming around 450 watts of power. Monero provides a block reward of 0.65 XMR.
Ans: Memecoins are just like any other cryptocurrency. However, unlike those coins, a memecoin pays homage to a meme, which is a sarcastic or funny idea. Users design these tokens with the sole purpose of making them viral and famous.
Ans: Altcoin is a combination of two terms – alternative and bitcoin. Specifically, altcoin is any cryptocurrency other than Bitcoin. Ethereum is the most popular type of altcoin currency in circulation. A few other examples are XRP, Tether, Cardano, Dogecoin and more.
Ans: Buying cryptocurrencies extend a host of advantages, such as:
Protects from inflation
They feature extensive security
Cryptocurrencies are decentralised
They are a convenient and fast method to transfer funds
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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