12 IMPORTANT CRYPTOCURRENCIES YOU SHOULD KNOW
When it comes to cryptocurrencies, Bitcoin dominates the news. Bitcoin has evolved into a revolutionary digital currency since its inception in 2009. While Bitcoin was the first significant cryptocurrency to be introduced to the market, there are practically thousands of other digital currencies available. We'll go through 12 different types of cryptocurrencies in this article.
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1. Bitcoin (BTC)
The Famous Amos, Bitcoin, is the first decentralized cryptocurrency to use blockchain technology to facilitate payments and digital transactions. Bitcoin was created as the forerunner of the cryptocurrency era to be used as a digital payment system, but experts think it is still too volatile to be used for that. Despite its significant volatility throughout its existence, bitcoin remains the most popular and highly valued cryptocurrency. The currency was launched in 2009 and has been on a roller-coaster ride ever since. It wasn't until 2017 that bitcoin became widely recognized.
An army of decentralized miners verifies transactions (and creates new Bitcoins up to a fixed cap) on Bitcoin's blockchain. With a market capitalization of US$896 billion in January 2022, Bitcoin is the cryptocurrency with the greatest market cap.
2. Ethereum (ETH)
In the cryptocurrency space, Ethereum is the second most well-known name. It's a decentralized software platform that lets you build and deploy smart contracts and decentralized applications (dApps) without worrying about downtime, fraud, control, or third-party interference. The system allows you to use ether (the currency) for a variety of tasks, but Ethereum's smart contract feature contributes to its popularity. Ethereum's goal is to establish a decentralized suite of financial products that anybody in the world, regardless of nationality, ethnicity, or beliefs, can freely access.
The applications on Ethereum are powered by ether, the platform's cryptographic token. After Bitcoin, Ether is the second-largest digital currency by market capitalization, having been established in 2015. Ether (ETH) is used to move about the Ethereum network and is mostly sought by developers who want to build and run apps on the platform, as well as investors who want to buy other digital currencies with ETH. Ether, like Bitcoin, has its blockchain, but it is uncapped, which means that an infinite number of coins can theoretically be minted. Trading at around $2,565 per ETH as of March 2022, ether’s market cap is less than half of bitcoin's, at about $312 billion.
3. Binance Coin (BNB)
Binance Coin (BNB), the cryptocurrency issued by Binance, is a utility coin that may be used to pay for fees associated with trading on the Binance Exchange (one of the most widely used exchanges in the world based on trading volumes). Binance Coin, which was originally designed to pay for discounted trades, can now be used to make payments as well as buy a variety of goods and services.
Users that pay in BNB have lower transaction fees on the Binance exchange. This has aided Binance Coin's adoption, making it one of the largest crypto coins on the market. Binance eliminates or "burns" a certain amount of the coins in circulation to keep their value steady. By market capitalization, Binance Coin is the third-largest cryptocurrency. It has a market capitalization of $61.0 billion as of March 2022, with one BNB worth $369.48.
4. Tether (USDT)
Tether is a blockchain-enabled platform that was launched in 2014 to make it easier to use fiat currency online. It is a form of stable coin, the first and most popular one, that aims to decrease volatility by pegging its market value to a currency or other external reference point. Tether and other stable coins seek to smooth out price fluctuations to attract consumers who might otherwise be wary of digital currencies, especially significant ones like Bitcoin, which have suffered repeated bouts of severe volatility. Each stable coin currency is backed by an equal number of US dollars which prevents it from experiencing the same pricing volatility as other cryptocurrencies. The system allows users to make transfers from other crypto currencies to US dollars in a fraction of the time it takes to convert to regular currency. Some individuals are concerned, though, that Tether isn't guaranteed by dollars held in reserve but instead uses a short-term form of unsecured debt.
Tether, with a market capitalization of $80.1 billion and a per token value of $1.00 as of March 2022, is the fourth-largest cryptocurrency by market capitalization.
5. Cardano (ADA)
The Cardano blockchain's native coin is ADA. It makes use of a peer-reviewed blockchain protocol named Ouroboros and employs smart contracts, enabling identity management. Cardano, dubbed a "third-generation" cryptocurrency, separates its blockchain into two layers to speed up transactions and implements native tokens to give ADA holders a better experience. Cardano has also been dubbed the "Ethereum killer" because its blockchain is said to be capable of more. Though it has surpassed Ethereum in terms of PoS consensus, it still has a long way to go in terms of DeFi applications. Cardano has a market capitalization of $26.9 billion as of March 2022, and one ADA is worth roughly $0.80.
6. Litecoin (LTC)
Litecoin (LTC), which debuted in 2011, was one of the first cryptocurrencies to follow in Bitcoin's footsteps, and has been dubbed the "silver to Bitcoin's gold." It is based on an open-source global payment network that is not centralized and uses scrypt as a PoW, which may be decoded using consumer-grade central processing units (CPUs). Although Litecoin is similar to Bitcoin in many ways, it generates blocks at a quicker rate, allowing for speedier transaction confirmation. Litecoin has a market capitalization of $7.4 billion and a per token value of about $106 as of March 2022.
7. USD Coin (USDC)
USD Coin (USDC) describes itself as “the world’s digital dollar.” It, like Tether, is backed by the US dollar, making its value far more stable than that of other cryptocurrencies. This stability makes it more suitable for digital payments, while other cryptocurrencies have a higher potential for growth as investments (along with more risk of losing value, of course). Unlike Tether, however, USD Coin has a more transparent fundraising mechanism and stronger auditing procedures. The goal is to reduce some of the risks associated with cryptocurrency by allowing customers to withdraw their coins and get the same amount in cash.
According to the currency's creators, the money is backed by fully reserved assets or assets with "equal fair value," which are stored in accounts with regulated US institutions. USD Coin (USDC) has a $52 billion market capitalization and a per-token worth of about $1.00.
8. XRP (XRP)
XRP is a digital currency based on RippleNet, a digital payments infrastructure developed by Ripple. Formerly known as Ripple, XRP was founded in 2012 and allows users to pay in a variety of real-world currencies. It was designed to help financial institutions scale digital payments globally while lowering transaction costs associated with typical cross-border funds transfers. It does this by acting as a bridge between two separate currencies, allowing for cheaper and faster global transfers. Ripple and XRP also allow for third-party development on other uses for XRP. The cryptocurrency XRP has a market capitalization of $35 billion and a per-token value of roughly $0.7356.
9. Polkadot (DOT)
Polkadot is a digital currency that integrates the blockchain technology of many different cryptocurrencies. It was launched in May 2020. It allows the interchange of information and transactions between different blockchains. Its website emphasizes data and identity protection, as well as user autonomy. Developers can establish new blockchains with Ethereum, but they must implement their own security mechanisms, which could expose new and smaller projects to attack because the larger a blockchain is, the more secure it is. Polkadot refers to this concept as "shared security." Polkadot has a market capitalization of around $17.4 billion as of March 2022, and one DOT is worth $17.59.
10. Stellar (XLM)
Stellar is an open blockchain network that connects financial institutions for the purpose of large transactions to give enterprise solutions. Lumen is the native cryptocurrency of XLM. Stellar allows individuals to create, send, and trade any digital money, not only Stellar's associated cryptocurrency, the Lumen. However, you'll need Lumens to transact on the network. As of March 2022, Stellar Lumens have a market capitalization of roughly $4.4 billion and are priced at around 18 cents.
11. Dogecoin (DOGE)
Dogecoin (DOGE) was developed as a meme and joke poking fun of rampant speculation, but that didn't stop it from skyrocketing in value in early summer 2021. The currency, which has a Shiba Inu dog as its avatar, is accepted as a means of payment by a number of prominent businesses, including the Dallas Mavericks, Kronos, and, perhaps most importantly, SpaceX, Elon Musk's American aerospace company. Dogecoin makes recording payments faster and easier, but there is no limit to how many coins can be created over time (unlike Bitcoin, which was designed with a cap on how many coins there can be). Dogecoin has a market capitalization of $15.0 billion and a price of around 11 cents per DOGE.
12. Terra (LUNA)
The Terra blockchain's native coin is LUNA. Terra is a platform that backstops a range of stable coins based on real-world currencies like the dollar and euro. Terra's algorithmic stable coins are backed by LUNA and use a central pool of tokens controlled by smart contracts to maintain the price. LUNA can also be used to pay network fees and allows owners to participate in matters affecting the network's governance. Luna has a market capitalization of $36.0 billion and a price of around $99.30.
That is all there is to it. However, there are still other cryptocurrencies out there. Although the US government appears to be taking a more active role in monitoring the crypto space, the cryptocurrency market is a Wild West. You should not risk more than you can afford to lose. The volatility of crypto-assets can be extreme, with prices moving dramatically even within a single day. You may also be trading against highly sophisticated players, making it a risky experience if you are an inexperienced investor. But all the same, if you win, you win big.