In the crypto world, there exists a quote attributed to Brad Garlinghouse, the CEO of Ripple and a highly regarded figure in the crypto world. In his own words, the CEO says, ‘If the types of cryptocurrency market overall or a digital asset is solving a problem, it’s going to drive some value’.
These words resonate with crypto traders worldwide, who fervently hope for the enduring presence of cryptocurrencies. Which is, by the way, crucial for all of us to ponder the current state of affairs. Are cryptocurrencies still fulfilling their purpose as problem-solving entities, as they once did in the past several years? And if they are, what are the intriguing things in today’s cryptocurrency industry? In this article, we shall embark on a quest to find out the truth.
As always, let’s start with a fundamental question: what is cryptocurrency and how to start cyptocurrency trading?
Cryptocurrencies, a digital, encrypted, and decentralized medium of exchange, operate differently compared to traditional currencies like the U.S. Dollar or the Euro. Unlike centralized monetary systems, cryptocurrencies function without the oversight of a central authority. Instead, responsibility for managing and maintaining their value is distributed among users across the internet.
While cryptocurrencies can be used for everyday purchases, many individuals view them as investment assets akin to stocks or precious metals. However, it’s important to note that purchasing cryptocurrencies carries inherent risks, requiring diligent research to fully comprehend the complexities of each system.
Bitcoin, the pioneering cryptocurrency, was introduced in a 2008 paper titled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ by Satoshi Nakamoto. This groundbreaking project aimed to create an electronic payment system that relies on cryptographic proof rather than trust.
The core of this cryptographic proof lies in the verification and recording of transactions on a blockchain, which acts as a decentralized digital ledger. This technology ensures transparency, security, and reliability in cryptocurrency transactions.
Types of Cryptocurrency: Why Are There So Many?
For the newbies, let’s start this section by answering the following question: how many types of cryptocurrency are there?
According to the CoinMarketCap report, we’re talking about a total of 22,932 cryptocurrencies, with a total market capitalization of USD 1.1 trillion—and get this, Bitcoin, the OG of the crypto world, only came into existence in 2009.
It took a little while for alternatives to Bitcoin, popularly referred to as altcoins, to make their debut. The year was 2011 when the rise of altcoins such as Litecoin (LTC) and Namecoin (NMC). But it was the launch of Ethereum (ETH) that really propelled other altcoins into the limelight.
Talking about a few common types of cryptocurrency, some, like Bitcoin, are seen as investment vehicles. People view them as a store of value, like digital gold. Others, like Ethereum, are more transactional in nature (which we’ll touch on next). Developers can work their magic and build all sorts of tools, services, and communities with transactional blockchains.
And here’s the deal with blockchain technology: It’s open source. This means that any software developer can take the original source code and create something new out of it. As mentioned earlier, there are nearly 23,000 different cryptocurrencies floating around and that number keeps on growing, to say the least. What’s surprising here is that, just four years ago, we were sitting at a mere 1,000 cryptos (talk about exponential growth!).
One reason for this explosion is how easy it is to create new cryptocurrencies. As you can see, the source code of one crypto can be used as the foundation for another. Take Ethereum, again, for example. Its network can be used to whip up your very own personalized digital coins. And sometimes, things get interesting with software code ‘forks’ that shake up the rules governing a crypto. This can lead to the birth of a whole new crypto, like Bitcoin Cash (BCH), which emerged in 2017 after a Bitcoin fork allowed for more transactions to be recorded on a single blockchain block.
The truth is, the surging prices of many, many types of cryptocurrency have attracted countless numbers of developers who, of course, want a piece of the action. Now let us tell you something. Blockchain technology has far-reaching uses beyond just digital currencies. So, while some cryptos may be riding the wave of a bubble that’s destined to burst, we can’t deny the decentralized nature of the technology and its broad applications in the software world. That’s why we find ourselves swimming in a sea of cryptos today.
Eight Most Popular Digital Coins
Here we introduce you to the top 8 most popular cryptocurrency coins.
1. Bitcoin
Let’s just start by saying that no one can claim to be a crypto trader without knowing what Bitcoin is.
Bitcoin, in a nutshell, is the pioneer of all types of cryptocurrency in use today. In contrast to traditional currencies, Bitcoin doesn’t require big-shot central banks or middlemen, such as your local bank, or any credit card company, to keep tabs on everything.
Instead, Bitcoin has this public ledger called the blockchain. To give you a clearer picture of how this technology works, think of it as a record book that lists all the transactions that have ever been made using Bitcoin. The interesting part, might we add, is that this ledger is open for everyone to see, and it’s a way for individuals to prove they actually own the Bitcoin they’re spending. It also helps keep the bad guys at bay, making it harder for them to mess around with the currency.
Owning a decentralized currency like Bitcoin comes with a great advantage. Take peer-to-peer money transfers, for instance. As there are two parties in different countries, Bitcoin makes those transfers between the two faster and cheaper than going through some fancy financial institution for currency exchanges.
2. Ethereum
Nextup is one of the most famous types of cryptocurrency. Ether serves as the token employed to facilitate transactions on the Ethereum network. Ethereum, at its core, is more than just a currency. It’s a whole platform that harnesses the awesome blockchain technology.
Now, the notable aspect of Ethereum is that it lets people create all sorts of interesting things, like smart contracts and other decentralized applications. And by decentralized, it means you no longer have to rely on distribution platforms like Apple’s App Store or Google’s Play Store, eliminating potential revenue cuts of 30% imposed by these tech giants. In essence, Ethereum represents both a cryptocurrency, with its coins measured in units known as Ether, and a software development sandbox.
3. Tether (USDT)
Next, let’s take a look at Tether. Tether belongs to the stablecoins types of cryptocurrency, which are currencies tied to fiat currencies, such as the U.S. dollar. In short, Tether’s concept is to bring together all the advantages of cryptocurrencies, such as the absence of financial intermediaries, with the stability provided by a currency issued by a government, thus mitigating the inherent price volatility associated with many other cryptocurrencies – or to put it another way, there’ll be no more wild roller coaster rides in the price department.
According to Forbes, Tether is still ranked among the top ten currencies to watch in 2023, with a market cap of USD 79.5 billion.
4. Binance Coin (BNB)
Among all types of cryptocurrency, Binance’s own BNB coin is the fourth-largest crypto token out there, and you can find it on the Binance cryptocurrency exchange platform, along with a bunch of other digital coins you can trade. Now, Binance Coin serves a dual purpose, acting as a type of currency while also facilitating tokens used for paying fees on the Binance exchange. Aside from that, it powers Binance’s DEX or decentralized exchange, which is used for application development.
In early 2023, BNB’s price was predicted to reach USD 545 this year.
5. USD Coin (USDC)
Let’s now talk about USD Coin, which is another player in the stablecoin game. To maintain price stability, USD Coin is pegged to the value of the U.S. dollar, much like Tether.
USD Coin is the one among several types of cryptocurrency that came onto the scene in 2018, thanks to the Centre Consortium, a team-up between Circle and Coinbase. Given Circle’s U.S.-based operations, the stablecoin is subject to regulatory oversight, solidifying its status as a regulated stablecoin.
As of April 2023, USD Coin’s has a market cap of a whopping USD 30.8 billion, and each coin is sitting pretty at a nice round price of USD 1.00.
6. XRP
XRP serves as the native token for the XRP Ledger, which was created by Ripple back in 2012. Now, what makes the XRP Ledger special is its consensus mechanism called the XRP Ledger Consensus Protocol. Which is just a fancy way of saying that it doesn’t rely on proof-of-work or proof-of-stake for consensus and validation. Transactions are, instead, being signed and forwarded to ledger servers by client applications. These servers then compare the transactions and determine if they’re good to go and can be added to the ledger.
Once the servers give the thumbs up, they send these transaction candidates to validators. These validators make sure that the servers got everything right and then record the version of the ledger.
As of April 2023, XRP had a market cap of about USD 24 billion and was trading at around USD 0.47.
7. Cardano (ADA)
Also known as ADA, Cardano is a digital asset that takes a research-based approach, created by a talented bunch of engineers, mathematicians, and cryptography experts. It was actually co-founded by none other than Charles Hoskinson, one of the original Ethereum gang members. Charles had his differences with the Ethereum crew and decided to venture out on his own, and so Cardano was created.
What sets Cardano apart from the other types of cryptocurrency is the extensive experimentation and peer-reviewed research that went into building its blockchain. The experts behind this project have written over 120 papers on blockchain technology, covering all sorts of topics.
Cardano is widely described as an ‘Ethereum killer’ as its blockchain claims to be capable of doing even more than Ethereum. However, Cardano is still in its infancy, and it’s got a long way to go when it comes to DeFi applications.
Speaking of which, Cardano aims to become the world’s financial operating system. Their goal is to offer DeFi products resembling Ethereum, as well as solutions for chain interoperability, legal contract tracing, voter fraud, and more. As of April 2023, Cardano had the sixth-largest market capitalization at USD 13.5 billion, and you could get one ADA for around USD 0.39.
8. Dogecoin (DOGE)
Also known as ADA, Cardano is a digital asset that takes a research-based approach, created by a talented bunch of engineers, mathematicians, and cryptography experts. It was actually co-founded by none other than Charles Hoskinson, one of the original Ethereum gang members. Charles had his differences with the Ethereum crew and decided to venture out on his own, and so Cardano was created.
What sets Cardano apart from the other types of cryptocurrency is the extensive experimentation and peer-reviewed research that went into building its blockchain. The experts behind this project have written over 120 papers on blockchain technology, covering all sorts of topics.
Cardano is widely described as an ‘Ethereum killer’ as its blockchain claims to be capable of doing even more than Ethereum. However, Cardano is still in its infancy, and it’s got a long way to go when it comes to DeFi applications.
Speaking of which, Cardano aims to become the world’s financial operating system. Their goal is to offer DeFi products resembling Ethereum, as well as solutions for chain interoperability, legal contract tracing, voter fraud, and more. As of April 2023, Cardano had the sixth-largest market capitalization at USD 13.5 billion, and you could get one ADA for around USD 0.39.
Cryptocurrency's Future: What to Expect Between 2023 and 2024
Talking about the future of cryptocurrencies, one of the most intriguing features of investing in crypto is that when they take off, they really skyrocket in value. Look at Solana, for example. In 2021, it increased by over 10,000%. While Shiba Inu, the meme token no one took seriously at first, shot up a staggering 40,000,000%.
However, things haven’t been all sunshine and rainbows since then. We entered a bear market, and the prices of most major coins took a hit. But don’t lose hope just yet. The crypto market has bounced back before, which means that, in the future, it might just happen again.
In all seriousness. We can’t predict with certainty which cryptocurrency will be the next big thing. However, we can certainly identify some potential candidates that are capitalizing on current trends like artificial intelligence, decentralized apps, and digital payment solutions.
There are a few types of cryptocurrency that could be gearing up for a major surge in 2023 and beyond. One such contender is SingularityNET.
SingularityNET, represented by the AGIX token, is a blockchain platform that empowers anyone to create, share, and monetize AI services. They’ve built a global AI marketplace where users can buy all sorts of AI services using the AGIX utility token (what a neat trick).
The AI boom has been truly revolutionary, not just for the crypto world, but for the entire planet. SingularityNET is in a prime position to ride this wave. They have a talented team of AI scientists, researchers, and developers. The platform makes it simple for users to purchase AI services or even develop and sell their own. Earlier in 2023, SingularityNET experienced quite a bit of success, with its price soaring by over 1,300%. Sure, it later went down a bit as some investors cashed in their profits, but there’s a good chance it could see more success as the field of AI continues to expand.
Let’s now discuss some concrete clues for investing in different types of cryptocurrency in 2023 and 2024. Pay attention to factors like price, 24-hour trading volume, market capitalization, and token circulating supply. These indicators can provide valuable insights, especially when analyzed alongside historical data from previous months.
Keep in mind that these indicators alone don’t guarantee the success of a project. They’re definitely helpful, especially when you consider the results from previous periods. So, dear readers, stay vigilant and keep an eye on these factors as you navigate the exciting world of cryptocurrency investment.
Where to Buy Bitcoins and Other Cryptocurrencies?
So, if you’re interested in becoming an owner of one or more digital currencies, the good news is that there’s no shortage of options out there. And with so many types of cryptocurrency available, it’s important to know where you can get your hands on them.
One of the biggest players in the game is Coinbase Global. This trading platform is a heavyweight in the industry, supporting over 100 types of cryptocurrency, including many of the top 10 largest ones by market cap. Our suggestion for those looking for variety, Coinbase is your solid choice.
Another top-notch platform is Binance, where you can trade not only cryptocurrencies but also Binance Coin and various tokens.
Now, if you’re the type who wants to buy both company stock and cryptocurrencies all in one place, we’ve some apps that you should definitely check out: Robinhood, Block’s Cash App (formerly known as Square) and SoFi.
Important note: these trading apps may not support all types of accounts like a full-service stock broker would, but they offer a range of functionalities that combine basic crypto and stock trading with digital banking conveniences.
Bottom Line
The cryptocurrency world is huge and ever-expanding. There are thousands of different types of cryptocurrency out there, each utilizing blockchain technology for a wide range of applications in the digital economy. While Bitcoin steals the spotlight as the most popular crypto, we can’t overlook the fact that developers are constantly innovating and finding new uses for blockchain technology.
In addition, this innovation brings tremendous value to other platforms like Ethereum, which serves as a foundation for building new software and applications. And in case you don’t know, that holds a lot of appeal for investors who are peering into the future. Decentralized blockchain has the potential to remove the need for third parties in business transactions and make global payments more efficient. It’s an exciting time with endless possibilities on the horizon.
