The 15 most important types of cryptocurrencies and their features

A summary of the most important types of cryptocurrencies, and their functionalities

Cryptocurrencies have become fashionable, something that is evidenced by the way they have become popular in social networks and other media. Their great boom and the succulent profits that some of these virtual currencies seem to yield have contributed to their expansion.

However, despite their sudden fame, not everyone is very clear about what they are, how they work and how many types of cryptocurrencies there are. In the following we will talk a little more in depth about cryptocurrencies and we will find out which are the most popular types of cryptocurrencies.

Types of cryptocurrencies

Cryptocurrencies have become very popular, especially in the wake of the economic instability of 2020 due to COVID-19 and the apparent economic recovery that 2021 has brought. The world of the virtual has been gaining weight, and with it investment in assets that move away fromfrom the classic stock markets to a greater or lesser extent.

Cryptocurrencies or cryptocurrencies are a digital or virtual currency designed to function as a medium of exchange, just as money does in real life. These currencies are used to pay for products or services, functioning in the same way as physical money.

However, using virtual money can involve risks, including being hacked and stolen.. This is where cryptography comes into play, which is the science of encrypting a message so that it can only be read by the right recipient. Thus, cryptocurrencies are digital money that, through cryptography, is protected so that it reaches its destination without being intercepted or stolen along the way.

Cryptography is not only used to ensure that cryptocurrency transactions are secure, but also to prevent new units of cryptocurrencies from being created.. Thus, we can say that cryptocurrencies are limited entries in a database that no one can change unless certain conditions are met.

The cryptocurrency landscape is very diverse. Anyone who wants to and understands a little about blockchain technology can create their own cryptocurrency with little difficulty, although this does not mean that it will be successful. Whether one of these currencies becomes popular and is used by thousands of people depends more on luck and the means available to its creator to sponsor it than other factors.

Be that as it may, it is a fact that the market for these currencies is growing, with some 1,600 cryptocurrencies currently considered to be minimally profitableIt is estimated that there must be more than 10,000 of these cryptocurrencies invented.

However, the cryptocurrencies and digital tokens that have real significance can be reduced to a short list of 15, listing the cryptocurrencies that are traded enough to have significant liquidity and are the most widely used and popular.

1. Bitcoin (BTC)

The Bitcoin was created in 2009 by Satoshi Nakamotoa pseudonym that could well be that of an individual or a group of individuals, since his true identity has never been revealed. Created with Blockchain technology, its original purpose was to be used as a payment method that is not affected by government oversight, transfer delays or transaction fees.

This currency is considered the original crypto, the first functional cryptocurrency ever created, and was intended to be an alternative to the traditional monetary system. and its intention was to be an alternative to the traditional monetary system, which in the crypto world is known as "flat currencies".

The creators of this cryptocurrency have a sort of book called "white paper", claiming that a flat monetary system controlled by central banks and a small number of financial institutions led to the centralization of wealth and power. This resulted in financial and social mobility being hindered, hitting the middle and lower classes through inflation.

Bitcoin aims to solve this by fixing the maximum number of units that can be created, thus avoiding inflation caused by money printing. With peer-to-peer blockchain technology, they do not require any financial institution to facilitate transactions and verify ownership.

Today, Bitcoin is mostly used as a form of investment.. Its characteristics are more similar to commodities than to conventional currencies. However, its high volatility prevents it from being a legal alternative to fiat money (physical money), since the value of a unit of BTC is currently too high to be used as currency.

Thanks to being the first functional cryptocurrency, Bitcoin remains the most popular currency and its value has a strong impact on the rest of the crypto market.. Throughout its history it has had significant ups and downs, going from being worth technically $0 in 2009 to as high as $60,000 a unit in February 2021. This means that currently Bitcoins are not bought whole, but fractions of them.

2. Ethereum, Ether (ETH)

After Bitcoin we have Ethereum as one of the currencies with the largest one of the coins with the highest capitalization in the cryptocurrency market.. Actually, the name of this coin is Ether, being Ethereum the name of the blockchain platform that supports it. Ethereum is a blockchain platform for "smart contracts".

Ether is responsible for providing the fuel needed to process the network's decentralized applications. Ether issuances are limited to about 18 million per year, which is 25% of the initial supply.

While Bitcoin is intended as an alternative to traditional currencies, Ether's purpose is to be used as a means of payment for the use of the Ethereum platform. This cryptocurrency is considered a utility currency rather than an investment currency.

3. Dogecoin (DOGE)

The Dogecoin is a currency created in a humorous way from one of the most famous memes on the Internet: the Doge dog. It was created by modifying a Bitcoin protocol in order to reach more recipients than the BTC itself.

Although the Dogecoin is considered a joke currency, the truth is that some 28.2 billion DOGE. Each of its coins is divided into 100,000,000 decimal places. The advantage of this cryptocurrency is that it is cheap, currently costing only $0.306652.

4. Binance Coin (BNB)

Binance Coin (BNB) is the cryptocurrency issued by the largest exchange of this world: Binance.. BNB has become a very attractive means of payment that offers the advantage of being able to reduce the cost of transaction fees for people with BNB tokens in their account. Added to this, one can receive BNB tokens as a reward for recommending its use to others.

5. Ripple (XRP)

Ripple XRP is one of the largest and most well-known cryptocurrencies today, traded on many different crypto exchanges worldwide. It is also a payment network for banks with the goal of making their international payment transactions more efficient and cost-effective.

The project is dedicated to payment transactions between areas using different flat currencies, thus increasing their efficiency. It has been closely linked to and backed by several traditional banks since its launch, which is why Ripple XRP is considered an establishment cryptocurrency.

6. NEO

NEO is China's first open-source blockchain project.. Originally this project existed under the name AntShares, launched in 2014 with a total number of 100 million coins, all already issued, and aimed to improve Ethereum by offering the same utility but with a more sophisticated blockchain technology. In 2017, the brand name was changed to NEO.

7. Cardano (ADA)

Cardano is one of the types of cryptocurrencies that any user anywhere in the world can use as a secure exchange of value, with no intermediaries. All transactions are permanently, securely and transparently recorded on Cardano's blockchain platform.

8. Litecoin (LTC)

Litecoin is an open source peer-to-peer currency, whose creators came up with it as a potential alternative to flats.. It has climbed the ranks to become a leading rival to Bitcoin. Its creators hope that over time LTC will become a common method of paying for services and goods.

The source code of this cryptocurrency is public and anyone can access it. It is an open source global payment network, fully decentralized and an administrator-free transaction system. It uses a peer-to-peer network, allows instant payments and shows great transparency, showing how its project works in each of its stages.

9. BitBay

Launched in March 2014, BitBay is. a centralized exchange system based in Estonia that supports both fiat and crypto-crypto pairs.. It offers a low trading fee of 0% in case of working in cryptocurrency markets, with deposits and withdrawals of 4 fiat currencies and more than 30 cryptocurrencies.

10. Polkadot (DOT)

The philosophy of Polkadot is that with its blockchain project aims to solve a problem based on communication inaccuracies between different blockchains.. Currently, the way blockchains work limits the possibility of external interference, which is an advantage because it guarantees a high level of security, but it hinders communication between different blockchains.

The DOT processes different transactions for different blockchains in parallel, drawing on validators that stack DOT tokens and approve individual transactions in the process.

11. IOTA (MIOTA)

IOTA is an open source invoicing platform project, based on DAG (directed acyclic graph) architecture. (directed acyclic graph). Its cryptocurrency was created as a data integrity technology and industrial devices, to work with devices compatible with the Internet of Things (IoT).

12. Stellar (XLM)

Lumen XLM is the digital currency of the Stellar network, a payment protocol that connects banks, payment operators and individuals.. This platform allows money to be transferred instantly at low cost, regardless of currency conversion and location. XLM is both a means of payment and the "fuel" for the network on which it operates.

13. Chainlink (LINK)

Chainlink is a decentralized platform based on the Ethereum blockchain.. It was created by Sergey Nazarov and is registered in the Cayman Islands. Its main goal is to solve the problem of connectivity of smart contracts with external data sources. This project has its own utility token, called LINK, which data providers use to charge fees for smart contracts.

14. Monero (XMR)

Monero is one of the emerging cryptocurrencies. It is digital, decentralized and anonymous but differs from Bitcoin in that it does not allow transaction tracking.. Monero aims to strengthen the anonymity of users.

15. Tether (USDT)

Tether (USDT) is one of the most popular cryptocurrencies, since it was designed to match its it was designed to match its value to the U.S. dollar in a 1:1 ratio.. This makes this currency a very useful cryptocurrency when trading cryptocurrencies, as it allows traders to avoid market volatility and use as a reference a currency that at all times has the same value as the main flat currency reference, the dollar.