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Types of Cryptocurrency

 

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The number of cryptocurrencies in the universe is very large. Based on Coinmarketcap data as of August 3, 2021, there are 5,909 coins and tokens in circulation out there.

However, among all, there are five crypto assets that are the most popular in terms of market capitalization value, namely Bitcoin, Ether, Binance Coin (BNB), ADA, and XRP. The five of them account for 73.11% of the total market capitalization of crypto assets per the period mentioned above.

What are the characteristics of these coins?

Get to know the main types of cryptocurrencies

1. Bitcoin

Bitcoin is a pioneer cryptocurrency created by a mysterious figure named Satoshi Nakamoto which was launched in 2009. It is the original coin of the Bitcoin blockchain system, a system intended to facilitate digital payments in lieu of fiat money.

But lately, the crypto community is using it as a means of protecting wealth (store of value). Because, the supply of Bitcoin is only 21 million pieces which are planned to be mined in 2140. According to the laws of economics, the price of a good will increase assuming a tight supply and a constant demand.

In addition, Bitcoin is also known as a high-priced cryptocurrency. The price of Bitcoin had touched a record high of US $ 63,707 or Rp. 923.75 million in mid-April.

Bitcoin’s high price tag, plus its tighter supply in the future, makes institutional investors interested in storing their wealth in that crypto asset. Companies such as Tesla, Microstrategy, and Square Inc. have Bitcoin as one of the assets in their portfolio.

2. Ether (ETH)

Ether is a native coin of the Ethereum blockchain network, which was launched in 2013.

Unlike the Bitcoin blockchain, the Ethereum blockchain features smart contracts, which the crypto community can use to develop decentralized applications (dApps). DApps developers are required to pay Ethereum application usage fees in the form of ETH to Ethereum developers.

Now, the Ethereum blockchain is home to 2,828 dApps, or 79.08% of the total 3,576 dApps as of August 3, 2021. With this number, it’s no wonder the demand for ETH is quite strong.

Now, ETH occupies the second position as the largest market cap crypto asset in the world. But since 2017, the crypto community has believed that ETH will overtake BTC as the “king of crypto assets” in a situation called “the flippening”.

They believe that the smart contract feature and the development of dApps will create a new decentralized economic activity. Thus, ETH will be considered to have a higher chance than Bitcoin as a medium of exchange in cyberspace.

3. Alts

Binance Coin

Binance Coin (BNB) is a cryptocurrency issued by the crypto exchange platform, Binance.

BNB was first launched in 2017 as a medium of exchange to pay trading fees on a series of decentralized exchange platforms on top of the Binance Chain blockchain.

However, in 2019, the crypto community will be able to use this coin to pay for smart contract facilities located on another Binance blockchain network called Binance Smart Chain. The Binance Smart Chain blockchain is aimed at developers who are passionate about creating decentralized applications, just like Ethereum.

Binance limits the number of coins to a maximum of 200 million pieces. Uniquely, Binance will continue to reduce the number of coins in circulation every year until the circulation of BNB on the market is only 100 million pieces. The goal is to keep BNB prices stable.

The reduction is done by a coin burning mechanism (coin burn). Binance always “burns” the coin every quarter of the year.

4. ADA

ADA is a cryptocurrency originating from the Cardano blockchain network. Cardano itself is predicted to be a third generation blockchain that has fast transaction scalability, which is 1 million transactions per second.

Apart from being used as a transaction coin on the Cardano network, ADA is also used by Cardano users to maintain the sustainability of their blockchain system. Why is that?

Cardano uses a consensus algorithm called Proof of Stake. In this mechanism, only users owning the ADA are entitled to verify or validate the transactions contained in them.

The ADA coin and the Cardano blockchain are becoming a topic of discussion because IOHK, the developer of Cardano, will include a smart contract feature in the development stage called Goguen. The smart contract will allow the crypto community to create tokens and Non-Fungible Tokens (NFT) like Ethereum.

Not surprisingly, Cardano plus the ADA coin now has the status of an “Ethereum killer”.

5. XRP

XRP is a crypto coin that runs on Ripple’s blockchain system. This coin is unique compared to its peers because it is used as a medium of value transfer across borders and across currencies. No wonder, if XRP is often used by several global digital transfer agencies to send money quickly and efficiently.

In 2020, the World Economic Forum named XRP as the most relevant cryptocurrency for central banks in facilitating intra- and inter-bank wholesale transactions. The relevance of XRP is expected to grow even more as global central banks are preparing their own digital coins, also known as CBDCs.

You Can Get All Major Cryptocurrencies at Pluang!

After reading the explanation above, are you interested in holding the main cryptocurrency? Fortunately, you can get all these coins in Pluang!

Not only the five coins above, but you can also get dozens of other altcoins in just three taps on your smartphone. In addition, you can also diversify your crypto assets with other asset classes such as gold, stock indices, and mutual funds in just one application!