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Different Types of Cryptocurrency Are Thoroughly Explained
Cryptocurrency

Different Types of Cryptocurrency Are Thoroughly Explained

Sep 3, 2023

Cryptocurrencies, everybody has heard this word. This word is also used to define the different types of cryptocurrency.

However, it is also interchanged with coins. Crypto is often regarded even though some of them do not serve as a store of value, a unit of account, or as a medium of exchange. But, Bitcoin does.

Since Bitcoin (BTC) was created in 2009, it has become a revolutionary and known digital currency. That is because it can help you to pay without the intervention of a third party like banks.

It uses Blockchain technology. What is Blockchain technology and how is it related to the question of what are the types of cryptocurrency?

Well, Blockchain is the technology behind cryptocurrency. It is a kind of digital ledger which stores all the information of a transaction at every stage.

It is Bitcoin because of which Blockchain has been put on the map. Its’ potential is to decentralize and improve the economy digitally.

But, Bitcoin is not the only cryptocurrency available. There are plenty more. So, we are going to take a look at these cryptocurrencies and learn about them.

Let’s get started!

Different Types of Cryptocurrency – What Are Crypto Coins and Tokens

Before jumping into learning the types, you should know what the difference is between a coin and a token.

Whenever you discuss something about cryptocurrency, or read something about it, the terms “coin” and “token” are frequently used.

Even though these terms sound like they are interchangeable, they have differences. Always keep these facts straight.

coins-and-tokens

  • Coins: A coin is created on its own blockchain. It acts as traditional money only. You can use coins to store value or as a means of exchange. Some examples of coins are Bitcoin and Litecoin.
  • Tokens: Before learning about what are the types of cryptocurrency, we understood what coins are. Now, tokens, have more uses than being just used as digital money. Tokens are created on an existing blockchain and are available for use as a part of a software app.

These can be used to grant access, verification of identity, or track products. There have been experiments where NFTs have been used with assets like real estate or real-life art.

An example of a token could be Ethereum (ETH).

Note: Also learn How to Earn from Binance Without Investment using these coins.

To move towards the different types of cryptocurrency, we will also learn about another type of coin.

There are also altcoins which is a combo of alternative coins. Since there is plenty of cryptos available and hard to say which is the best, there are some altcoins available. These coins are top-tier because of their privacy, functionality, and scalability.

Moving toward the different types.

Bitcoin – Globally Known Crypto Coin

bitcoin

Bitcoin is the first digital currency that uses blockchain technology for the facilitation of payments and digital transactions. This one from the list of types of cryptocurrency would rather Bitcoin’s blockchain act as a ledger. It doesn’t use a central bank or third parties to control the supply of money or verify transactions respectively.

This is a public ledger that records all of the transactions. It allows people to prove that they own Bitcoin that they are trying to use.

With this, fraud can also be avoided along with other unapproved tampering. It is faster and less expensive to use than the traditional means of exchange.

Ether – What Are the Types of Cryptocurrency Explanation in Points

ether

Ether is a crypto token that is used for facilitating transactions on the Ethereum network. It is a platform that makes use of blockchain to ensure that smart contracts are created. Also, it enables other decentralized applications where a 30% cut from the revenue is to be given.

Decentralized applications mean the software does not require to be distributed on exchange apps, App Store, or Google Play Store.

Ethereum is a cryptocurrency as well as a software development sandbox.

Tether – Different Types of Cryptocurrency Has a Stablecoin

tether

It is a currency that is called stablecoin or is tied to fiat currency. This coin was generated with the idea to merge the advantages of crypto with the stability of a currency that has been issued by a government.

Binance Coin – One With the Crypto Exchange Platform

binance-coin

You can avail of the Binance Coin on the Binance Crypto Exchange platform. There is also the availability of various other digital coins for trading. Binance Coin is also used as a currency but it can also be used to facilitate tokens. These tokens are used to pay fees on the Binance exchange and to power the Binance decentralized exchange (DEX).

USD Coin – What Are the Types of Cryptocurrency for Stablecoins?

usd-coin

This is another stablecoin, and like Tether, US Coin is also related to the U.S. dollar. USD coin is hosted on Ethereum. The idea behind launching this coin was the creation of a totally digital dollar that has the stability of U.S. fiat currency.

However, there is no need for a bank account or a holder living in the country. USD Coin is seen as money that you can spend with merchants online rather than it being an investment.

Note: Get ultimate guide for best crypto sites to invest

Bottom Part

There are different types of cryptocurrency that you can use or avail. We have discussed here about coins and tokens and how they are different. Always remember the difference between them as they both can be used for digital transactions but are not the same.

Alternative coins have also been discussed here such as Bitcoin. Go through the list of the crypto that we have explained here. There are plenty of other crypto coins and tokens that you can learn about. These are the majorly known ones.

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