Types of Cryptocurrency
There was a time when you could count the number and types of cryptocurrency on one hand. Today that is no longer possible. The crypto market has grown, grown and grown some more!
This is a categorization that defines each currency as a unique type. This is especially because each currency has unique features that make it endearing to users.
Here is a look at the common individual currencies existence in the market.
The first cryptocurrency to emerge was Bitcoin (BTC), it is based on the SHA-256 algorithm. This digital commodity was conceptualized at a whitepaper written in 2009 by a pseudonymous writer who went by the name Satoshi Nakamoto. Over the span Bitcoin’s first four decades, the market cost of one Bitcoin has shrunk from under $0.01USD to over $250USD. The highly volatile cost has generated Bitcoin an attractive investment choice for dealers trying to profit from market speculation, while at the exact same time the industry volatility has made long term investors and daily users hesitant to participate for lengthy amounts of time.
A single Bitcoin can be spent at fractional increments that Can be as small as 0.00000001 BTC per transaction. The smallest increment of a Bitcoin is popularly known as a Satoshi, called after the original whitepaper author. The protocol allows for incremental trades in the event the value of BTC to rises to the point at which micro trades will become common place. The gain in the value of BTC is expected because there’s a limitation to the whole amount of Bitcoin will ever be created. When the Bitcoin blockchain is finished, users can simply circulate the coin that still exists on the community.
Bitcoin is currently the most reliable of all Cryptocurrencies, as it is the oldest, and has become the topic of mainstream media coverage because of rapid market changes and also an innovative technical concept. In the time of writing, Bitcoin could be interpreted as being the ‘gold standard’ of cryptocurrency since all alternate cryptocurrency market costs are matched into the price of BTC.
Litecoin (LTC) makes use of the Scrypt encryption algorithm, as opposed to SHA-256. One of the goals of Litecoin would be to have transactions confirm at a faster speed compared to Bitcoin network, as well as make use of an algorithm that has been resistant to accelerated hardware mining technologies like ASIC.
There are four times more Litecoins that Bitcoins in the market. This has given more people an opportunity to trade on the Litecoin platform. It has set the pace by eliminating third parties in the process of swapping. This means that the transaction is purely between two people. This use of smart contract is regarded as atomic swap. Some are for the idea while others think that it is risky. However, the world is warming up to Litecoins because of its user friendly nature.
Platform that enables smart contracts and distributed applications (DApps) to be built and operate with no downtime, fraud, interference or control from a third party. Throughout 2014, Ethereum had established a pre-sale for ether that had obtained an overwhelming response. The applications on Ethereum are conducted on its own platform-specific cryptographic token, Ether. Ether is similar to a vehicle for moving around on the Ethereum system, and is sought by mostly developers seeking to develop and operate programs inside Ethereum. According to Ethereum, it can be employed to “codify, decentralize, trade and secure just about anything.” Following the attack on the DAO in 2016, Ethereum was split into Ethereum (ETH) and also Ethereum Classic (ETC). Ethereum (ETH) has a market capitalization of $4.46 billion, second after Bitcoin among all cryptocurrencies.
A decentralized and open-source cryptocurrency launched in the second part of 2016, and it really looks promising. In case Bitcoin is like http for money, Zcash is https, this is how Zcash defines itself. Zcash offers privacy and discerning transparency of trades. Thus, like https, Zcash claims to give extra privacy or security where all transactions are recorded and printed within a blockchain, but details such as the sender, recipient, and amount stay private. Zcash offers its users the option of ‘shielded’ transactions, which allow for content to be encrypted using advanced cryptographic procedure or zero-knowledge proof structure called a zk-SNARK developed by its team.
Dash (originally known as Darkcoin) is a more secretive variant of Bitcoin. Dash offers more anonymity as it functions on a decentralized mastercode system which produces transactions almost untraceably. Launched in January 2014, Dash experienced a growing fan after in a brief span of time. This cryptocurrency was made and manufactured by Evan Duffield and could be mined using a CPU or GPU. The rebranding did not change any of its technological features such as Darksend, InstantX.
Ripple is a real-time worldwide settlement network that provides instant, certain and low-cost international payments. Ripple “empowers banks to repay cross-border payments in real time, together with closing transparency, and at lower prices.” Released in 2012, Ripple currency has a market capitalization of $1.26 billion. Ripple’s consensus ledger is a method of conformation. Ripple does not need mining, a quality that deviates from bitcoin and altcoins. Since Ripple’s structure does not need mining, it reduces the use of computing power, and minimizes network latency. Ripple considers that ‘distributing value is a powerful means to incentivize certain behaviors and consequently currently intends to distribute XRP mostly “through business development agreements, incentives to liquidity providers who offer tighter spreads for payments.
Monero is a secure, confidential and untraceable currency. This Open source cryptocurrency was launched in April 2014 and shortly spiked great interest among the cryptography community and fans. The development of this cryptocurrency is totally donation-based and community-driven. Monero enables complete privacy by employing a special technique known as ‘ring signatures.’ with this technique, there seems a bunch of cryptographic signatures like at least one real player but since all of them appear valid, the real one cannot be isolated.