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What are all the different types of Cryptocurrencies?
Introduction
With sensational development in blockchain technology, cryptocurrency has been greatly evolving and strengthening itself in the market. For their ease of use and utility, digital currencies have become a happening section in transactions and digital currency exchanges. Also, many people have started their investing careers in the field of cryptocurrencies. Since they hold immense value in the present times and can be used for almost everything, they have a lot of investors within their fold. Moreover, the blockchains use a decentralised system, pouring the bulk of energy into the hands of the concerned individuals rather than a particular group of people or an authority. This helps in enhancing the security of the data and information.
Varieties in cryptocurrency
There are various types of cryptocurrencies available in the market that are used for exchanges and for carrying out transactions. If you plan on investing in any of them or more than one, you must be required to keep a sharp eye on their fluctuation in the market. Since the fluctuation is turning out to be in your favour, it is one of the most critical factors affecting your fortunes in crypto.
Currently, there are around 21,000 types of tokens and coins that you can invest in. In addition, there are 20,268 cryptocurrencies in the present times that people are investing in.
Since all of them hold different values in the market, it is a necessary step to have a look at the performance of the cryptocurrency that you are willing to invest in, in the market. Many factors from time to time can affect the value of that particular cryptocurrency and can make you both gain and lose fortunes.
Various types of cryptocurrencies
- Bitcoin
Leading the cryptocurrency world and becoming the cryptocurrency with the highest value, Bitcoin has become the most trusted and exchanged digital currency in the world. It makes use of decentralised networks for transactions and digital payments. The system safely keeps and handles all the data related to these transactions. Being a decentralised currency, it allows the peer-to-peer transfer. These transfers are faster and cheaper. The cost of transfers is nominal, adding to the popularity of Bitcoin. Also, it does not involve third-party institutions, keeping the information between the individual and the system.
- Ethereum
Ethereum is another known name in the world of digital currency. The primary reasons for its popularity are the usage of smart contracts and the support of dApps. Smart contracts are the contracts that help in the automatic carrying out of transactions on a single command. No manual inputs and time is required to do that. Since it helps in saving time and effort, it has made Ethereum extremely popular.
It holds the top second position in the ranking of the market. Moreover, statistics show a continuously growing and rising graph of Ethereum.
The decentralised applications it supports are another reason it has become so popular recently. All the investors familiar with the cryptocurrency's name are familiar with Ethereum. It is known to be both a cryptocurrency and a software-developing sandbox.
- Tether
Unlike most cryptocurrencies, Tether is a stablecoin. It is known to be away from the volatility of the crypto world. When other cryptocurrencies are unstable and can take up many dips consistently when they are not performing well, people investing in Tether are always relaxed. Many investors who invest in more than one digital currency at the same time consider Tether as a good option. Although it does not hold the same value as Bitcoin or Ethereum, it helps gain steady and small fortunes. The main idea behind the genesis of Tether was stability. Therefore, this is the primary factor that draws people towards it, irrespective of the few cons it holds.
- Binance Coin
Binance Coin is the digital coin available for trading on the Binance platform. It is based on blockchain networking, providing a safe and secure space for you to carry your transactions out. Also, the people interested in exchanges get an excellent platform to fulfil their needs. It also facilitates tokens that can be used on the Binance exchange to pay fees. They are effortless to use and hold immense importance if you use them for your transactions.
Binance does not use fiat currencies, and you are not allowed to convert dollars, pounds, yen, etc. Binance Coin plays a significant role in strengthening the Binance exchange ecosystem. It is a trusted name among thousands of investors globally, giving a user-friendly exchange experience. The decentralised exchange for building applications is also facilitated.
- USD Coin
Associated with the US dollar, it is a stable currency like Tether. It gives a safe exchange experience and Investing without causing much financial loss to the people involved. USD coin is hosted on the Ethereum blockchain. This makes them related to the decentralised system for carrying out transactions. The primary reason behind the genesis of the USD coin was to create a stable digital currency with a dollar value and one that does not require any bank account for its handling and operation. Also, the current holders are not required to live in the associated country and can carry their transactions out from any corner of the world.
Conclusion
There are many types of cryptocurrencies in digital currencies, holding different values and having additional features. With other specifications, one can use them for various purposes. They are designed to carry out transactions and exchanges smoothly and hassle-free. Moreover, no paperwork like a bank is required in this case. Also, it opens doorways to the world of investing, helping people to make their careers in this field.
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