Types of Cryptocurrencies Explained

• Toshendra Kumar Sharma
• May 25, 2020

Interested in knowing what are the top types of cryptocurrencies and the differences between them? The article illustrates what is a cryptocurrency and the top cryptocurrencies in the market today. Sounds perfect? Let’s get started.

 

Learning Of Blog

• Introduction to Cryptocurrency
• Top 5 Cryptocurrencies
• Conclusion

 

Introduction to Cryptocurrency

 

Gone are the days when you could count the number and types of cryptocurrency on the one hand. Today, this is no longer feasible as there are numerous cryptocurrencies that claim itself to be the best one. Before exploring the top cryptocurrencies, let’s revise the definition of it.

 

It is virtual or digital money, we can say, which takes the form of tokens or coins, specifically designed to work as a medium of exchange. All the Cryptocurrencies are always designed to be free from government manipulation and control, and this is what makes them so unique. Now, let’s get to the point and read about the top 5 cryptocurrencies in the market today. If you are a Blockchain enthusiast and want to become a certified blockchain expert, check out the Best Blockchain certification courses here.

 

Top 5 Cryptocurrencies

 

Now, as we have learned the concept of cryptocurrency,  here is a list of the top 5 well-known cryptocurrencies.

 

Bitcoin 

 

When it comes to digital money, Bitcoin continues to lead the pack of cryptocurrencies, in terms of popularity and market capitalization. But today, Bitcoin is not alone. There are several other cryptocurrencies that follow different approaches to trading. Talking about Bitcoin, it was created in 2009 as open-source software, and no one knew that it would be a huge technological movement.

 

Blockchain technology, an underlying technology behind Bitcoin, allows users to make transparent peer-to-peer transactions. It enables all users to view these transactions, but only the owner of that Bitcoin can decrypt it using a “private key” that is given to each owner.

 

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Litecoin

 

As an alternative to Bitcoin, Litecoin was launched in the year 2011. Like other cryptocurrencies, Litecoin is also an open-source, global payment network that is decentralized, meaning there are no central authorities. This cryptocurrency uses “scrypt” as a proof of work(POW), which can be decoded with the help of CPUs of consumer-grade. Now comes the question what is the difference between Bitcoin and Litcoin? Although Bitcoin and Litcoin are similar, Litcoin is known to have faster blockchain generation and thus offers a faster transaction confirmation time. In terms of algorithm, Litecoin uses scrypt, and Bitcoin uses SHA-256.

 

Ethereum 

 

This cryptocurrency was introduced in 2015, is an open-source platform based on blockchain technology. It is a platform that allows people to build and run decentralized apps (known as DApps), tokens, and smart contracts without any downtime, fraud, control, or interference from a third party. The applications of Ethereum are run on its platform-specific cryptographic token, known as Ether.

In simple words, we can say that Ether seeks to provide “fuel” for the decentralized apps on the network. So what makes Ethereum so popular and different from the rest of the cryptocurrencies? Each particular action on the ethereum network requires a different amount of time and computational power. It relies on- the greater the computation power and time required, the higher the ether fee for the action to be accomplished.

 

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Ripple 

 

Backed by many banks and financial institutions, Ripple was introduced in 2012. It is a real-time worldwide settlement network that provides instant and low-cost international payments. It empowers banks to repay cross-border payments in real-time, together with without compromising transparency. This cryptocurrency is also known as Baker’s coin.

 Unlike Bitcoin and other cryptocurrencies like altcoins, Ripple does not need mining, and therefore, it reduces the use of computing power and minimizes network latency. Presently, many well-reputed companies like global banks and others have partnered with Ripple and trusting them. But the only drawback with this cryptocurrency is that it is not decentralized.

 

ZCash

 

It is a digital currency built on the original Bitcoin codebase. According to Zcash’s official website, “Zcash is a privacy-protecting, digital currency built on strong science.” Just like Bitcoin, Zcash transaction data is posted to a public blockchain; but this cryptocurrency ensures that your personal and transaction data remain completely confidential, unlike Bitcoin. Zero-knowledge proofs(ZKPs) allow transactions to be verified without disclosing the sender, receiver, or even transaction amount. Particular disclosure features of Zcash enable users to share transaction details, for purposes of compliance or audit.

 

Moreover, it also allows for transparent transactions, to accommodate for wallets and exchanges that don’t support private transactional operations.

 

Conclusion

 

We hope after reading this article, you are now familiar with the top 5 cryptocurrencies and able to make your own opinion on each of them. So which is your favorite cryptocurrency? Let us know in the comment section.

 

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