The global cryptocurrency market cap is currently more than a trillion dollars as of February 2023. Cryptocurrency has become popular because of its decentralization, anonymity, and security.
Are you considering investing in cryptocurrency? Let’s go through some of the types of cryptocurrency.
1. Bitcoin (BTC)
Bitcoin was the first cryptocurrency and is the largest by market capitalization.
Bitcoin is a decentralized currency that can be sent from user to user on a peer-to-peer network without a bank or another intermediary. It was invented back in 2009 by an unknown person known as Satoshi Nakamoto.
Bitcoins are awarded as part of the mining process. Transactions are verified by networks through cryptography. They’re then recorded in a public distributed ledger called a blockchain.
There is also Bitcoin Cash (BCH). This is a variation on the traditional Bitcoin blockchain that attempts to be faster and cost less.
2. Ethereum (ETH)
Ethereum is an open-source, blockchain-based, decentralized platform that enables the creation of smart contracts and decentralized applications (DApps).
This crypto type was launched in 2015. It has since become the second-largest cryptocurrency. Ethereum has its own cryptocurrency called Ether (ETH).
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3. Ripple (XRP)
Ripple (XRP) was created in 2012. Unlike other available options out there, Ripple was initially created to allow easy money transfers between a variety of banks and other financial centers.
Ripple attempts to provide a more efficient and cost-effective alternative to traditional payment systems across borders.
Ripple’s native cryptocurrency, XRP, is used as a bridge currency to facilitate transfers between different currencies. It can be used to reduce liquidity costs and improve delivery speed. The company behind Ripple has partnerships with lots of different financial institutions around the world.
4. Litecoin (LTC)
Litecoin was originally invented in 2011 as a fork of the Bitcoin blockchain. It was developed with the goal of improving upon some of the limitations of Bitcoin, such as slower transaction times and higher fees.
Litecoin uses a different hashing algorithm, which is designed to be more memory-intensive and ASIC-resistant. This makes it more accessible for individual miners to participate in the network.
Litecoin transactions are processed four times faster than Bitcoin transactions and have lower transaction fees. Litecoin is also designed to have a higher maximum supply of coins than Bitcoin.
5. Tether (USDT)
Tether (USDT) is a stablecoin cryptocurrency that is designed to maintain a particular reserve ratio with the American dollar. This means that for every Tether token issued, there is a corresponding US dollar held in reserve.
Tether is intended to provide a more stable alternative to other cryptocurrencies, which can be subject to large price swings. The idea is that Tether can be used as a substitute for the US dollar in cryptocurrency exchanges and transactions, allowing users to avoid the volatility associated with other cryptocurrencies.
Start Investing in Different Types of Cryptocurrency Today
Hopefully, you now have some ideas on what types of cryptocurrency you’d like to invest in.
Are you looking for more financial advice? Read through some of our other posts on crypto and so much more.