I can bet on the fact that you don’t know all the types of cryptocurrency. And no, these are not the different types of coins. And Bitcoin is not a type of cryptocurrency, it’s an example.
But I’m sure that you would like to know the different types of cryptocurrency out there, and that’s how you stumbled upon this article.
Let’s look at the different types of cryptocurrency and their examples.
Let’s dive in.
What is cryptocurrency
Cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.
Cryptocurrency is a type of alternative and digital currency.
In short, it’s an alternate form of money that’s not cold hard cash but is present in the form of coins or tokens on the internet.
These coins or tokens are produced from an online software known as blockchains.
Blockchains, are an opensource, which makes it easier for developers to take the original source code and make a new creation altogether. This is what cryptocurrencies are primarily based on.
Read also: 5 Cryptocurrency Trends That Entrepreneurs Need to Know
Types of Cryptocurrency
Now that we know what cryptocurrencies are, let’s look at the types of cryptocurrencies that are out there in the market along with its examples.
1. Transactional cryptocurrencies
This is the original category that cryptocurrency comes under.
The entire point of this of this cryptocurrency is to eliminate all kinds of control of central authorities and middlemen from our day-to-day transactions. These types of cryptocurrency that can be store and exchanges for value. They move the value of the coin outside the blockchain, due to their zero/low cost.
Transactional cryptocurrencies are slowly gaining popularity due to large numbers of people using it.
The whole point of transactional scalability is to provide a strong platform where mass adoption is possible. There are many cryptocurrencies that have been made to salvage the situation of mass adoption of transactional cryptocurrency.
Examples of transactional cryptocurrencies include – Bitcoin and Litecoin, to name a few.
2. Cryptocurrency platforms
These platforms create a base to build other cryptocurrencies. In short, its a base and a building block to create other decentralized apps/cryptocurrencies.
This type of cryptocurrency a smart contract feature that enables blockchains. Smart features are nothing but computing systems that enable self-execution, which are written in codes, and stored in blockchains.
It’s a computing platform that can be used to make new cryptocurrencies and can be used for transfer between accounts.
Examples of platform cryptocurrencies include – Ethereum and Neo, to name a few.
3. Cryptocurrency private coins or Application cryptocurrencies
These are based on the platform cryptocurrencies. There are more than 600 types of application cryptocurrency out in the market, and all of them base their development and operation on the smart contracts platform.
But, privacy is one of the major concerns when it comes to the internet. If you slip up in any way and end up making your Private key known, then your entire transaction history is going to become a part of the public news.
Which is why there are certain cryptocurrencies that help you keep all your private information safe and secure.
Examples of Cryptocurrency private coins include – Monero and Dash, to name a few.
4. Utility tokens
These tokens are also known as an app or user coins and are designed for a specific purpose. They can help you gain access to the products and services that you need.
Examples of utility coins include – Azbit and DeNet, to name a few.
These are some of the different types of cryptocurrency that are out there in the world.
The general cryptocurrencies that we see on the internet such as Bitcoin, Litecoin, Dogecoin, Ethereum etc. come under the categories mentioned above.
Read also: What are NFTs?
Last but not least, let’s take a look at the top 10 cryptocurrencies in the market.
Top 10 Cryptocurrencies
Okay, be honest, what is the first thing that comes to your mind when you read the word cryptocurrency?
But did you know that there are over 1,600 cryptocurrencies in the world?
And they are divided into 2 types – Bitcoin and Altcoin.
Bitcoin is a cryptocurrency, a form of electric cash. Its a decentralized digital currency without a central bank or a single administrator. Bitcoin can be sent from user-to-user on the peer-to-peer Bitcoin network without the need of any intermediaries.
Altcoins are any digital currencies that are similar to Bitcoin. The term “Altcoin” stands for “alternative to Bitcoin,” and its used to describe any cryptocurrency that is not Bitcoin. Most of the commonly used Altcoins used, have the same building blocks as bitcoin.
This type of cryptocurrency still remains as the best type of cryptocurrency till date.
2. Bitcoin cash
This cryptocurrency came into the market in 2017, and is already one of the most traded cryptocurrencies in the market. Many compare it with bitcoin.
This is known as the “the little brother” of Bitcoin, yet it has faster transaction and a higher number of tokens.
This cryptocurrency resembles the Shiba Inu dog that which was one of the most popular internet memes.
This is also known as the decentralized app provider.
This is similar to Ethereum, but it applies to digital advertising.
This is the first open-source public blockchain in China. It launched in 214.
Ripple is commonly used by banks to make money transfers.
This cryptocurrency was launched by the co-founder of Ripple, in 2014. Most of its features are similar to that of Ripple.
This was first launched in 2015, by the co-founder of Ethereum. It’s the first peer-blockchain that is powered by scientists and academics.
Now that we know almost everything that there is to know about cryptocurrency, it’s safe to say that you learn how to trade it.
If you want to learn how to trade cryptocurrency, do take a look at one of our other articles.
About The Author
Ana Farr is the Community Manager at Ecommerce-Platforms and Unblock.net. She is a matcha and mindfulness enthusiast and loves to chat about the implications of Blockchain technology.