What Are The Types of Crypto Currencies?
Here is an article about the types of cryptocurrency you should know about, cryptocurrency has revolutionized the currency market in the past few years, and itâ€™s changing the way people do business all over the globe.
You donâ€™t need to be some sort of cryptographer to get started with Bitcoin; you just need a few simple tips that will help you understand how cryptocurrencies work, and what types are out there. So letâ€™s take a look at some of the types of crypto currencies you should know about.
1. Bitcoin (BTC)
Bitcoin is a type of cryptocurrency and digital payment system. It is the first decentralized digital currency, as the system works without a central repository or single administrator. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
Bitcoin was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2022, over 15,174 merchants and vendors accepted bitcoin as payment. The use of bitcoin by criminals has attracted the attention of financial regulators, legislative bodies
READ ALSO Can a Bitcoin Wallet Be Hacked?
2. Ethereum (ETH)
Ethereum is an open-source, public, blockchain-based distributed computing platform. It provides a decentralized Turing-complete virtual machine that can execute scripts. The Ethereum network includes the peer-to-peer network protocol, which uses a cryptocurrency called ether to mediate the trade of goods and services outside the centralized systems that rely on a middleman.
Ethereum was proposed in 2013 by Vitalik Buterin, who then went on to implement it.
3. Ripple (XRP)
Ripple is a real-time global settlement network. It offers instant, certain and low-cost international payments for banks. Ripple’s distributed financial technology enables transactions in any currency or commodity to be carried out quickly and cheaply, without requiring a centralized authority such as a bank.
The decentralized open source protocol creates an agreement between ledgers so that one does not need to rely on just their own institution for processing the transaction. Cryptocurrencies are digital currencies transferred from person to person via the internet. They are independent from physical entities like countries, companies and traditional banking institutions.
4. Litecoin (LTC)
Litecoin is a peer-to-peer cryptocurrency and open source software project released under the MIT/X11 license. Inspired by and technically nearly identical to Bitcoin (BTC), Litecoin has more coins that can be mined, faster transaction confirmation times, and a different hashing algorithm. The Litecoin project was created in 2011 by Charles Lee, an engineer who later went on to work for Coinbase and now Jaxx; the idea being that it’s a more lightweight version of Bitcoin. There are also other minor technical differences between the two cryptocurrencies. Unlike Bitcoin, Litecoin does not have a hard limit for how many coins can be mined.
5. Dash (DASH)
Dash, formerly known as Darkcoin and XCoin, is an open source peer-to-peer cryptocurrency with a solid focus on privacy. Dash offers instant transactions (InstantSend), private transactions (PrivateSend) and token fungibility. It was originally released in January 2014 under the name XCoin, but was rebranded to Darkcoin in February 2015, before finally settling on its current name of Dash in March 2015. The coin was created by Evan Duffield.
DASH has become popular due to its consistent price increase in spite of major corrections in other crypto currencies. On January 12th 2017, it reached $1 billion market capitalization. It currently has a market cap of $2 billion dollars which makes it among the top ten most valuable crypto currencies out there today.
6. Monero (XMR)
Monero is a secure, private, untraceable currency. It is open-source and freely available to all. Monero uses a special kind of cryptography to ensure that every single transaction remains 100% unlinkable and untraceable.
With Monero, you are your own bank. Only you control and are responsible for your funds, and your accounts and transactions are kept private from prying eyes. Unlike Bitcoin, Monero has no hardcoded block size limit in its protocol; this means that as demand grows the size of the blocks will increase to accommodate.
The level of privacy on offer with Monero does come at an initial cost – larger amounts are more difficult to process because they require more work from the computer carrying out the task. That said, it’s a small price to pay for ensuring nobody can trace any activity back to you.
7. BitConnect (BCC)
The BCC is the currency that powers BitConnect, an open-source, peer-to-peer decentralized cryptocurrency exchange platform. The BCC is not a fork or clone of Bitcoin. It uses the same SHA-256 algorithm as Bitcoin, but with different modifications to make transactions faster and more efficient.
It has unlimited supply unlike many other cryptocurrencies such as bitcoin and litecoin. It can be obtained from mining or trading on the various exchanges for fiat currencies like USD, EUR, CNY etc., in return for cryptocurrencies like BTC, ETH and BCH etc.
What cryptocurrency should beginners know?
Bitcoin is the most popular cryptocurrency on the market, but it is by no means the only one. There are plenty of other cryptocurrencies which are worth investing in, and some that may suit your investment needs better than Bitcoin.
Ethereum is a decentralized computer operating system which was first described in a white paper by Vitalik Buterin. The Ether token is used to pay transaction fees and computational services on the Ethereum platform. Ether can be traded for fiat currencies or other tokens via cryptocurrency exchanges.
Litecoin is a peer-to-peer currency that enables instant payments to anyone in the world and offers low fees and fast transactions as well as protection against fraud compared to Bitcoin. Ripple is an open source, global payment network using blockchain technology that allows for seamless international transactions for any size sum without requiring a bank account or currency exchange.
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There are many different types of cryptocurrencies, but they can be narrowed down into two categories: proof-of-work and proof-of-stake. Proof-of-work coins require miners to solve complex math problems in order to generate new coins. Proof-of-stake coins are created through the process of mining and then distributed according to which stake you have in the network.