There was a time when the term ‘cryptocurrencies’ was synonymous with one token alone; Bitcoin. But the last decade has shown that, while Bitcoin might be the most valuable crypto-coin today, there are other coins out there looking to dethrone BTC. That’s why the term altcoin has become so popular. Indeed, several cryptocurrencies have emerged championing themselves as the best ‘alternative’ coin or token to Bitcoin.
But before we move on to our cryptocurrency list, just what is a coin or a token? We’re sure you’ve come across both terms and probably used them interchangeably believing they’re the same thing, right? Surprise! The two are different from one another. A coin, in essence, is used for transactions and payments across a decentralized platform. In short, it’s a form of digital currency. On the other hand, a token can serve several purposes apart from just being a digital currency.
Just like the stock market, tokens can be initiated as part of an initial coin offering for a Defi project. They can also be used as a form of security (similar to stock) to determine the value of a company. Simply put, tokens can be used for a lot of activities.
List of Cryptocurrency
So now that we’ve put to bed the issue of definitions, let’s take a look at the top 10 different types of cryptocurrency in terms of coins and tokens.
In this guide we’ll focus on the following:
10. USD (C)
The USD Coin, or USDC, is operated on the Ethereum blockchain and it functions as a stable coin. What this means is that these types of crypto are pegged against the value of a fiat currency, —which in this case—happens to be the U.S. dollar. Simply put, the USDC will always be equivalent to one American dollar, making it a stable form of digital currency.
The purpose of stable coins is to increase the speed and affordability of transactions between other altcoins and the dollar. There are also lesser risks involved with the USDC because the coins’ reserves are tracked by the reputable global finance firm, Grant Thornton LLC. Presently, there are over $50 billion USDC coins in circulation.
Started by one of the co-founders of Ethereum, Gavin Wood, Polkadot extends its capabilities to different areas in the crypto market.
The platform’s native coin is the dot. Polkadot runs on two different blockchains—with the first being the main ‘relay’ network. Here, any transaction carried out is permanently recorded. And then we have the ‘parachains’ network which is a collection of user-created blockchains known as ‘parachains.’
Parachains can be used for several activities like building apps, supporting other coins, and securing the primary blockchain.
Polkadot aims to enhance interoperability between different blockchains by building bridges between different networks.
Dogecoin was one of the first meme coins amongst all cryptocurrencies to hit the crypto market in 2013. What started out as a supposed joke toward Bitcoin gradually transformed into one of the biggest altcoins in the market.
In fact, the currency experienced an unprecedented boom when in April of 2019, Musk tweeted that he was supporting Dogecoin, which raised the crypto’s legitimacy.
Just like Ethereum and Bitcoin, Dogecoin runs on a Proof of Work system. Unlike most crypto currencies that put a fixed value on the number of coins that can be mined, Dogecoin has an unlimited number of coins. The coins have one of the biggest market caps in the market with over $20 billion.
7. XRP (Ripple)
XRP is a crypto coin that was designed to function on the Ripple Network. Ripple, on the other hand, is a global transfer network that provides a number of services to international financial companies. As a digital currency, XRP facilitates transactions on the Ripple platform, as well as for exchange with other crypto currencies.
Unfortunately for miners, XRP can’t be mined. It has a fixed supply of 100 billion coins, relying on a node verification system to verify transactions. That’s why it boasts one of the fastest and cheapest transaction times in the crypto market.
Solana is a unique blockchain platform whose native token is known as the Sol. In fact, Sol is one of the highest-performing cryptocurrencies. In 2021, it has skyrocketed from just under $5 to nearly 20 times its value.
One of the reasons for its growing influence over the types of cryptocurrency is its effect on decentralized finance or Defi. Solana has one of the best smart contracts technology, accommodating several programs that run on the platform. The Solana team was also behind the Degenerate Ape Academy, a popular NFT that was launched in 2021.
Before USDC made it to the market, Tether was the first stable coin in our list of cryptocurrency types that was introduced to the world. Just like the USDC, the tether coin is pegged to the American dollar.
Designed to provide lower transaction charges, transparency, and stability, Tether provides a sense of security, especially for first-time investors looking to invest in the crypto market. Unfortunately, there has been speculation that Tether Limited does not guarantee that all tethers can be switched for American dollars.
BNB was first started as a crypto token in 2017 to allow traders to get free discounts, make payments, pay for travel, and book online services. It was initially created with a fixed supply of 200 million tokens, half of which were offered during Binance’s initial coin offering.
Over the years, Binance coin has grown to become the largest cryptocurrency exchange in the world. The coin used on the Binance platform is BNB, or the Binance coin. The Binance platform was initially constructed on the Ethereum blockchain but transferred to the Binance platform in recent times.
When Cardano was first launched in 2015, it marketed itself as a third-generation blockchain platform. Unlike Ethereum and BTC, Cardano uses a unique Proof of Stake system which cuts down on electricity costs and complex calculations, making the network more sustainable, faster, and more efficient.
Cardano’s token is known as ADA, and the platform can be used for several applications such as traceability and identity confirmation. Through Cardano, financial systems can be able to streamline data collections from several sources. It can also track a product’s manufacturing origin, potentially preventing counterfeit goods and fraud.
Ethereum is one of the most popular types of cryptocurrency networks designed as a programmable blockchain for multi-purpose applications. It not only supports a currency—the ether—but the network is also used to create applications known as decentralized applications that can be monetized.
Ethereum uses a proof of work system. However, unlike Bitcoin, an unlimited number of Ethers can be created.
Aside from dApps and smart contracts, Ethereum has also boosted the process of initial coin offerings; since several ICOs were initiated on Ethereum’s blockchain. Ethereum has also been the brains behind NFTs, and over the years, has transformed the crypto world as we know it.
And last but not least, we have Bitcoin, the world’s oldest and most popular type of cryptocurrency. Bitcoin was created by an anonymous user in 2009 who goes by the mysterious name of Satoshi Nakamoto. Capped at a limit of 21 million tokens, Bitcoin arguably has the smallest fixed cap value of any cryptocurrency.
Bitcoin relies on blockchain technology that uses a proof of work system to verify its transactions. Unfortunately, the PoW system requires a series of powerful computers and large power consumption for every Bitcoin transaction to be verified. That being said, Bitcoin’s peer-to-peer consensus became the foundation of several crypto currencies today.
The transactions are permanently recorded on the blockchain’s network—which validates and secures every bitcoin. Unfortunately, Bitcoin has been in the spotlight for the last couple of years as one of the polluting types of crypto because of its worrying effects on the environment.
Nevertheless, Bitcoin’s dominance in the cryptocurrency list is still clear from its popularity. But with other cryptocurrencies making headway in the market, we could see a power shift occurring very soon.
We hope that this article has provided you with some insights into the types of cryptocurrencies.