Cryptocurrencies and Its Types

There was a time when Bitcoin was the only cryptocurrency. There were no marketplaces (read: exchanges) to buy or sell it. The value was determined by the users themselves on a rough basis as done in a barter system. One such transactionbecame a part of crypto legend and is talked about very often. Soon, as the ecosystem started to grow along with the community, other cryptocurrencies started popping up. Some of the earlier ones were Namecoin (NMC), which forked out of bitcoin, and Litecoin (LTC), which was made by introducing slight variations to the bitcoin source code. While Namecoin dropped out of contention after a few years and is almost non-existent today, Litecoin continues to be one of the top cryptocurrencies. These days several new blockchain projects are launched every day. It’s difficult to keep track of every new kind of token but here are a few major ones which dominate the crypto ecosystem –

· Bitcoin: This is where it all began. Bitcoin was the first cryptocurrency, released in 2009. With time, the popularity of bitcoin has only grown and that too exponentially. There are many reasons why it turned out so but I can’t think of any reason why it continues to happen (other than speculation and greed of course!). There are several cryptocurrencies in the market which hold the edge over bitcoin in efficiency as well as technically. Bitcoin uses proof-of-work, which makes it mineable, and the hash function SHA-256.

· BTC Variants: As bitcoin’s popularity grew, developers started tweaking bitcoin’s source code in an attempt to improve it. Several variants came out during those days, the most popular one being Litecoin (differing on hashing algorithm, faster block generation time and maximum supply).

· Ethereum: Another early blockchain project, which turned out to be as revolutionary as bitcoin if not more. Ether is the second largest cryptocurrency my market capitalization and the most actively used blockchain. Ethereum conceptualized and made it possible to build Decentralized Applications (Dapps) over it as well as the execution of smart contracts over a blockchain. Several innovations and crypto applications such as ICOs, DeFi and NFTs were only made possible by Ethereum.

· Stablecoins: Unlike other cryptocurrencies whose values are dynamic, stablecoins are the tokens whose value remains stable (negligible deviations). Stablecoins act as a bridge between fiat currencies and other cryptocurrencies. They are generally backed by cash or cash equivalents to maintain their value. Tether (USDT) is the earliest and most popular stable coin. While it used to be the only one till a couple of years ago, there are several competitors that exist now such as USD Coin (USDC).

· Altcoins: Altcoins is short for alternative coins. It was a term coined in the early days of the crypto revolution when only a handful of tokens existed. It is used to refer to the cryptocurrencies other than bitcoin. Technically, ETH, LTC & even USDT are all altcoins.

With the amount of innovation happening in the crypto industry right now and the number of projects being launched daily, there can be no end to such a list. There are several other categories of tokens such as Weedcoins, Dog Tokens, Clones, Forks, DeFi Tokens, NFTs etc. with more being added at lightning pace. Keep checking CoinSwap24’s blog to keep track!