What is Cryptocurrency? Most Common Types of Cryptocurrency 2021

 

 

Top 10 Most Common Types of Cryptocurrency -2021

 

This article will deal with cryptocurrency. You must have heard this term, but lot of readers may not be having all the relevant information as well as nitty gritty of the same. To enlighten you all more about it , we are publishing this article. After reading this article , you will have a thorough information about cryptocurrency. So let's get started.

 

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What Is Cryptocurrency?

A cryptocurrency is a digital currency or you can say it is a virtual currency. This is secured by cryptography hence it cannot be double - spend or
Counterfeit.

The list below will incorporate the 10 major Cryptocurrencies by market capitalization based on CoinMarketCap on 9/14/21. There are quite a few virtual currencies with varying prices so market cap assist to find out those with highest valuation. Keep in mind the fact that the name of blockchain platform may be different from it's digital currency.  

Let's figure out the 10 most common types of Cryptocurrencies below to have a better understanding of this concept.

 

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1. Bitcoin

 

The first in this list happens to be the first cryptocurrency that got created by a person or a group by the pseudonym Satoshi Nakamoto. It is extremely relevant to mention that there are 18.8 million Bitcoin tokens which are in circulation as of September 2021 against a capped limit of 21 million.

 

Bitcoin was designed and developed in such a way so that it will remain independent of any Central Bank or Government. It is based on blockchain technology which can be described as a decentralized public ledger containing a digital record of every Bitcoin transaction. It established  the basic forms of cryptography and consensus verification and the same is used as a foundation for most of the other forms of crypto.

 

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Bitcoin miners utilize powerful computers for the purpose of verifying blocks of transactions and generate more bitcoins which is regarded as a time consuming as well as a fairly complex process also known as proof - of - work ( PoW). The transactions are registered permanently on the block chain thereby ensuring that it gets validated and each Bitcoin and the entire network is secured.

2. Ethereum

 

The next in this list is Ethereum. Although it is a blockchain network however, it was designed as a programmable network signifying that it was not meant to support a currency rather assist the network's user to create, publish, monetize and use applications called as "dApps". It must be stated that Ether (ETH) , the native Etherium currency was designed for making payment on Etherium platform. Ether was considered to be the number two virtual currency as of September, 2021. There is no limit as far as creation of number of ETHs are concerned. 

 

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3. Cardano (ADA) 

 

Cardano is a third - generation blockchain platform. It is likely to be the next - level player in this field. It's cryptocurrency is known as Ada. It's most significant applications are related to identity management as well as traceability. Cardano is built in 5 phases towards achieving it's goal of developing the network into a decentralized application platform having a multi asset ledger and verifiable smart contracts.  The network seems more efficient as it depends on proof - of - stake  (Pos) which signifies that complicated PoW calculations and high electricity usage essential  for mining coins like Bitcoins are not mandatory.

 

4. Binance Coin (BNB)

 

 

Binance is one of the biggest cryptocurrency exchanges. Binance coin ( BNB) is a cryptocurrency token that was meant to be used as a means of exchange on Binance. Initially it was built on Ethereum blockchain however, at present it lives on Binance's own blockchain platform. In 2017, it was developed as a utility token enabling traders to obtain discount on trading fees , but now it can be used as a means to make payments , for entertainment , online service as well as financial services etc.

 

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BNB was created with a maximum of 200 million tokens, half of which were made available to investors during it's ICO. Every year it buys back and then permanently destroys some of it's coins to drive demand. It is worth mentioning that Binance completed it's 16th burn as on July 2021 of about 1.29 million BNB which comes to around $394 million at that point in time.
 

 

5. Tether

 

 

It is regarded as the first cryptocurrency marketed as " stablecoin". The tether has been  designed so that it can provide lower transaction charges to the users apart from offering transparency and stability. It can be used by investors to avoid extreme volatility of the crypto market. There is one more thing which must be mentioned out here and that is the fact that tethers cannot be exchanged for U.S. dollars. As of February 2021, 57% of Bitcoin trading was done by means of tethers.

 

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6. Solana

 

 

It is such a blockchain platform that generates cryptocurrency called as Sol. It is a volatile currency . It is a smart contract technology signifying that it runs on the platform based on the preset conditions. Sol was trading at about $191.00 on September 10th , 2021 and just one year back it was worth $3.42. Solana was behind the "Degenerate Ape Academy," which is a non fungible token ( NFT). 

 

7. XRP- Ripple Labs Inc

 

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The credit for developing XRP goes to Ripple Labs Inc. Lot of people thinks that the terms XRP and Ripple means the same, but in reality they differ. Ripple happens to be the global money transfer network used by financial services companies and XRP is the crypto designed to work on Ripple network. XRP does not depend on a complex digital verification process via blockchain . The Ripple network uses a unique system for the purpose of validating transactions whereby participating nodes conducts poll to verify transactions. This is one of the greatest reason why such transactions seems faster and cheaper in comparison to Bitcoin.
 

 

8. Dogecoin

 

 

It was launched in 2013 as a way to poke fun at Bitcoin. It got fair amount of investment and was successful in drawing people's attention as well. It can be considered as the first joke cryptocurrency. It runs on a blockchain network using a PoW system. Unlimited number of coins can be mined in this system. In April , 2019 Elon Musk posted a tweet suggesting he had a positive view about Dogecoin, this tweet added more limelight to Dogecoin. 

 

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Although it is  placed as one of the biggest coins by market cap however, it trades at one of the lowest prices: about 24 cents, as of Sept. 10, 2021.

 

9. Polkadot (DOT)

 

 

It operates using two blockchains : 

• The main " relay " ( out here transactions are permanent. )
• A parallel network of user created blockchains also called as parachains. 

The main difference of Polkadot from other blockchains revolves around the fact that its core mission is to solve the problem of interoperability by building so-called bridges between blockchains.  

It was Co - founded by Gavin Wood. The idea was to take the capabilities of a blockchain network to another level. It has attained the status of a bigger networks in a fairly short span of time.

 

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10. USD (USDC)

 

 

USD coin ( USDC) is basically a stablecoin that runs on the Ethereum blockchain and several others. It is pegged to the U.S. dollar. It is a stable form of exchange since a USDC is worth one U.S. dollar.  The idea is to make transactions cheaper & faster. It is believed by lot of people that USDC is very transparent since it's reserves are being monitored by American arm of Grant Thornton. It is worth stating that on March 29th, 2021, Visa announced the use of USDC to settle transactions on it's payment. Till June 2021 it is said that 24.1 billion USDC were in circulation.
 

 

Conclusion 

 

 

This article has highlighted the various types Cryptocurrencies in use . As we have seen the top 10 Cryptocurrencies and their features so now we know for a fact their relevance and benefits. Of course Cryptocurrencies are used widely and have gained tremendous attention. We hope, this article must have provided enough information on this topic. 

 

It must be highlighted out here that cryptocurrencies are not issued by any central authority therefore , they are immune to Government interference. We must take into account the fact that many Cryptocurrencies are decentralized networks based on blockchain technology.

 

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