Every day, around 900 new coins enter the cryptocurrency market. While some sink without a trace, just as many grow to provide excellent investments for those willing to take a risk. But do you know the ones that have managed to remain relevant?
If not, then we can guide you. Read on as we talk about the most popular types of cryptocurrencies.
Bitcoin is the most famous cryptocurrency and experts considered it the first currency that used distributed ledger technology. It does not use a central bank or third parties to verify transactions. Instead, when you buy Bitcoin you use blockchain technology to keep a public record of all transactions.
As it is public, it can help prevent fraud. Everyone can check who owns Bitcoin and in what amount. As transfers are peer to peer and do not use a middleman, transactions are much quicker.
Ether is the currency used on the Ethereum network even though their names are often used interchangeably. This blockchain network can create decentralized applications and smart contracts. When given for use, they don’t have to give profit to large tech giants like Apple and Google.
Originally used for accountancy, there are now hundreds of applications on the Ethereum network. You can buy virtual real estate and artwork or even rear digital pets.
Litecoin was one of the first cryptocurrencies that emerged after Bitcoin. It uses a script that can be decoded with the help of a computer processing unit. Very similar to Bitcoin, one of the advantages is that it has a faster transaction time.
Another advantage is that a lot of merchants and websites have begun to accept Litecoin as a currency. It is the 21st largest cryptocurrency in the world and has a wealth of practical uses.
4. Bitcoin Cash
Bitcoin Cash was the result of a process known as a hard fork. This happens when developers can not agree on how to change or alter a code. In this case, the currency is split into the original and changed form and two separate ones emerge.
One of the most successful results of this was Bitcoin Cash. The original Bitcoin network had a limited size of blocks. Cash increased its block size so that more transactions could be held within it and the speed would improve as a result.
Dogecoin is famous for its avatar, a Shiba Inu dog used in meme culture. Its price hiked drastically in 2021 when several major tech companies announced that they planned to accept it as currency. Rumor has it that it was created as a speculative cryptocurrency joke, poking fun at the emerging volatile industry.
Investing in Types of Cryptocurrencies
Now that you know the main types of cryptocurrencies, you can begin investing. Decide upon your budget and the level of risk you want to take. Established coins may be better if you want less risk but potentially less gain.
If you found this article helpful, we have many more. From property to stocks, we can help manage your investments in the coming year.