Cryptocurrency, also known as crypto-currency or crypto, is any type of digital or virtual currency that uses cryptography to secure transactions. Cryptocurrencies lack a central issuing or regulating authority and instead rely on a decentralized system to record transactions and issue new units.
Different Types Of Cryptocurrency:
1) Utility Tokens
2) Security Tokens
3) Payment Tokens
4) Exchange Tokens
5) Non-fungible Tokens
6) DeFi Tokens Or Decentralized Finance Tokens
7) Stablecoins – Fiat And Other Types
8) Asset-backed Tokens
9) Privacy tokens
The four major types include utility, payment, security, and stablecoins. There also are DeFi tokens, NFTs, and asset-backed tokens. Of all cryptocurrencies, the most common are utility and payment tokens. These do not have their investment backed or guaranteed by regulation. The five biggest cryptocurrencies are Bitcoin, Ethereum, Tether, Cardano, and Binance Coin. We also have Solana. Bitcoin has the largest market share of over 40 percent as of November 2021, according to CoinMarketCap data. That makes a total market cap of $1.16 trillion. Ethereum has a market cap of over $514 billion. There are about nine types of cryptocurrencies. They include utility, exchange, payment, security, stablecoins, DeFi tokens, NFTs, and asset-backed tokens. These categories are based on several things, including the formulation or code, application or use case, and functioning of the cryptocurrency.
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Here are the top 5 cryptocurrencies to invest in
1) Bitcoin
Bitcoin is sometimes referred to as digital gold because of its scarcity and historical ability to be used as a store of value. Only 21 million bitcoins, or 91 percent of the total supply, are currently in circulation. After a broader market selloff, Bitcoin fell below $20,000 in August. Despite some critics claiming that Bitcoin's heyday is the growing number of trust funds and exchange-traded assets, Bitcoin is unlikely to vanish until the entire asset class collapses.
2) Ether (ETH)
The month of September appears to be the most anticipated for Ether as the Ethereum blockchain transitions from Proof of Work to Proof of Stake or PoS algorithms. The transition to popular decentralized finance for a Proof of Stake or DeFi blockchain should facilitate scaling, reduce business demand, and eventually reduce high ether gas fees, which act as a barrier to entry. They deal with clothing. The Merge, an event, is set to begin on September 6. The final procedure takes place between September 10 and September 20.
Solana operates its own blockchain, much like Ethereum and Bitcoin. And, just as Ethereum Solana was built from the ground up for DeFi, smart contracts are a rapidly growing field of finance.
DeFi is a massive field with many winners that has the potential to disrupt all types of transactions with brokers laden with centralized exchanges and other complex and expensive intermediaries.
Ethereum's PoS core will strengthen Solana's main rival SOL's low fees and fast network have already propelled it to the top 10 cryptocurrencies with stable power and an impressive ecosystem of decentralized applications (dApps). SOL's share of the overall market has increased from 0.01 percent in January 2021 to 1.1 percent today, thanks to an increasing presence in games using non-volatile tokens, or NFTs.
4) Avalanche (AVAX)
Avalanche has lofty goals for its platform, aiming to be the cryptocurrency equivalent of Amazon Web Services. AWS is an abbreviation for Amazon Web Services, a well-known cloud computing division of Amazon.com Inc. Many Fortune 500 companies and large financial institutions use it to power their websites and digital products (hint: AMZN).
Avalanche has noticed that businesses want to launch their blockchains quickly and is now facilitating this with a new feature called subnetting. AVAX is now worth around $20, having quadrupled since its initial public offering in 2020.
5) Cosmos (ATOM)
Cosmos is the next best cryptocurrency to buy. The ATOM token, which is a governance token that gives owners a prorated voice on how the project should proceed, helps protect the underlying Cosmos Hub chain by creating new tokens through staking.
Cosmos is one of the top 25 cryptocurrencies, with a 2017 trading history and a current market cap of more than $ 3 billion. The project's objectives are admirable, with the goal of making the expanding blockchain ecosystem more developer-friendly and hassle-free. Today, communication between blockchains leaves a lot to be desired. Long-term cryptocurrency investors should consider gaining exposure to some ambitious projects like Cosmos as interest rates continue to swing cryptocurrency markets.
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