By now, you have probably heard of Bitcoin and cryptocurrency.
Many people still wonder: what is a cryptocurrency, exactly? It’s a form of digital currency that uses complex algorithms to secure transactions through networks. It’s decentralized money in the form of tokens or coins that aren’t regulated by the government.
So, how many kinds of cryptocurrency are there? There are over 4000 types of cryptocurrencies as of April 2021. Some are better than others, and you’ll have to do some research before making some rash decisions.
Here are the most prominent types of cryptocurrency besides Bitcoin.
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1. Ethereum (ETH)
Ethereum is a leading competitor of Bitcoin, at a market price of over $2,000 as of April 2021.
Although Bitcoin reigns supreme with a market value of approximately $55,000, Ethereum is also a programming language.
Essentially, Ethereum is not only a currency but also a program runner.
2. Litecoin (LTC)
Litecoin is more similar to Bitcoin than it is different.
Litecoin was launched just two years after Bitcoin. It uses a similar blockchain mechanism which is the digital receipt of transactions across computers.
Litecoin founder shared that Litecoin can produce 84 billion Litecoins, which is 4 times the coins of Bitcoin. Litecoin also processes transactions in 2.5 minutes while Bitcoin processes transactions in just under 10 minutes.
Keep in mind that Litecoin is the better cryptocurrency for quick, small transactions.
3. XRP (“Ripple”)
XRP is the new craze among cryptocurrency investors.
It brags about its consensus system, which needs various networks to approve a transaction. XRP is possibly even more decentralized than all other cryptocurrencies. XRP’s system allows transactions to be processed within seconds because its coins are pre-mined.
XRP is also the best cryptocurrency to use for global transactions since prominent banks in over 40 countries use the Ripple payment application. If you think XRP is more suitable for your lifestyle, make the switch and click here to sell Bitcoin.
4. Tether (USDT)
Tether is known as the “stablecoin,” meaning that it has a value outside of the value of its cryptocurrency. 1 tether coin has a base price of 1 US dollar, making it a more steady cryptocurrency.
This makes Tether more alluring for people who want to get away from the price volatility of cryptocurrencies.
Tether doesn’t have the extra fees of converting cryptocurrency to cash, since there is a base fiat value attached to the coin. Thanks to its connection to fiat currency, Tether is easy to transfer globally and through bank networks.
5. Dogecoin (DOGE)
Also known as a “meme currency,” Dogecoin originally started off as a joke when it was launched in 2013. None of its programmings is very different from Bitcoin; in fact, it was a direct copy of the Bitcoin program with a change of the logo.
Yet, this strange cryptocurrency has been outrageously popular this year, rising by over 6000% in market price since April 2020.
DOGE has a much shorter block time than Bitcoin of around 1 minute, in comparison to Bitcoin’s 10 minute block time. Dogecoin is set to produce 5 billion coins a year, making it a cryptocurrency that will stay for a long time.
Research More Types of Cryptocurrency
These are just 5 types of cryptocurrency out of 4,000 out in the market.
Since you may feel overwhelmed with all of the factors to consider, find all the pros and cons of investing in cryptocurrencies.
Cryptocurrency is still a new form of currency that has high hopes for the future. Make sure you do ample research before jumping into an investment! Browse the rest of this section for some of our latest finance reads.