Different Types of Cryptocurrencies
If you are new to cryptocurrency, you might be wondering what a cryptocurrency is and how many types are there? What is it used for, and why has it become so popular? Cryptocurrency is not like traditional currency, also known as fiat. Fiat has physical existence, while cryptocurrency is digital. Fiat are regulated and controlled by a government body, whereas cryptocurrencies are online and usually aren’t under restrictions or control by governing bodies.
Some Common Facts about Different Cryptocurrencies
Cryptocurrency is a digital asset, so it exists virtually without any physical form or shape. Secondly, cryptocurrency uses very strong cryptography to act as a medium of exchange. Cryptography also controls and verifies the creation and transfer of new and old blocks within the chain. Most of the cryptocurrencies of today are open source and can be mined by using very strong computer applications and processors. Another feature that is common to almost all cryptocurrencies is that they are time-consuming to mine. In fact, digital currencies are very, very slow to mine, so people usually rather trade them, buying and selling over established crypto exchanges that are secure and reputable.
The Many Different Cryptocurrencies Today
With the rise and penetration of cryptocurrencies being so fast in the last decade, especially since Bitcoin came onto the scene, the results have been fairly positive. Hundreds of cryptocurrencies are available today, with many more being created on a daily basis. There are lots of variations of the traditional Bitcoin, like Monero, and they all operate on different priorities and patterns.
If we count how many different cryptocurrencies are there, it exceeds the 2500 mark. It’s not necessary to know each cryptocurrency, it’s more important to know which ones perform the best. You must take the time to learn about the most promising digital currencies and how to trade or invest in them efficiently.
As of today, Bitcoin alone holds about 59% of the market cap and is considered to be on a continuous rise. It might drop now and then, but it always picks up sooner or later. Next are Ripple, Ethereum, and Tether. There are also tokens, they don’t have an independent blockchain but are popular digital currencies nonetheless.
Why so many Cryptos
It isn’t possible for a single cryptocurrency to satisfy all traders or investors in terms of technology or priorities. Also, the numbers of cryptocurrency blocks, which can be mined for a single type of cryptocurrency, are limited. That means they aren’t sufficient for the number of traders who like to invest in cryptocurrency today. It’s a headache for investors who are looking for a specific type of crypto investment.
However, with the birth of hundreds of new cryptocurrencies, there is potential for most individuals. Unfortunately, newcomers can bit it all a bit confusing, and as such, it’s advisable to look for online platforms like executium.com which help with investment decision-making. It may make a huge different in a world full of different cryptocurrencies.