Cryptocurrencies that originated in 2009 have gained immense popularity today. Investors, especially the young ones look at cryptocurrency as a good investment avenue. As of now, more than 4000 cryptocurrencies are floating in the market. But, not all of them are the same. In fact, most people have not even heard about a majority of them.
This excessive supply of different types of cryptocurrencies tends to confuse people because a beginner with no knowledge might not be able to identify the right cryptocurrency. Even if you are not looking at it as an investment, the knowledge of different types of cryptocurrencies can prove to be helpful. We will take a look at different types of cryptocurrencies. As it is simply not possible to list down more than 4000 cryptocurrencies, we are going to talk about the ones that we think are worthy enough to stay in the long run.
Different types of cryptocurrencies
The first cryptocurrency that ever came into existence was Bitcoin in 2009. Bitcoin’s founder is an unknown person who goes by the pseudonym Satoshi Nakamoto. It is said that bitcoin has a limited supply of 21 million coins out of which 18.5 have already been mined in the past ten years. Once the 21 million coins are exhausted the supply of Bitcoin will come to an end. No new coins would be mined. Bitcoin has gained immense popularity among crypto investors. In fact, few countries have started considering it as a mode of payment for various types of transactions.
In the year 2009, the value of 1 Bitcoin was only $0. It started trading at around $0.0008 to $0.08 per coin in July 2010. However, this year the price crossed $64,000. Due to this price rise, the market cap of Bitcoin touched a whopping $1100 Billion.
Ethereum has gained a huge market for itself in a very short period. It launched in the year 2015 by Vitalik Buterin. The currency was initially started to complement Bitcoin. But, with time it has become a competition to Bitcoin.
Ethereum runs on the same technology called Blockchain, like Bitcoin. But, it isn’t just another cryptocurrency. It also acts as a ‘Smart Platform’. Therefore its blockchain is not limited to Ethereum transactions.
The Ethereum blockchain is capable and quite fast. In fact, fast enough to run programming codes of other decentralized applications. As a result, it the developers can use it for various other purposes.
After Bitcoin, Ethereum is the second most popular and widely traded cryptocurrency in the world. The price of Ethereum in 2021 is less than 10% of Bitcoin. But it has a market capitalization of more than $450 billion.
In the year 2011, an alternative to bitcoin was introduced by the name of Litecoin. Charlie Lee is the founder of litecoin. Just like bitcoin, Litecoin works on the same technology.
In fact, it is decentralized too. Thus, no central authority can establish control over Litecoin. These key points make Litecoin like Bitcoin. Though, there are a few differences.
As mentioned, Bitcoin has a supply of 21 million coins. But the supply of Litecoin is 4 times that of bitcoin i.e., 84 million coins. Due to this excessive supply, Litecoin could not enjoy the popularity of Bitcoin did.
It also uses a different algorithm than bitcoin does. Litecoin runs on “scyrpt” while bitcoin runs on “SHA-256”
This is one of the most unexpected, yet the most expected inclusion in this list. Dogecoin launched in the year 2013 by Billy Markus and Jackson Palmer.
The founders mentioned that they started the coin as a joke to mock the speculation in the crypto market. Dogecoin is also known as the meme coin. It is because the logo of dogecoin is the Shiba Inu dog that is commonly used for memes.
What started as a joke 8 years ago has now become a cryptocurrency with a market capitalization of more than $90 billion.
Dogecoin received a polarised review. Unlike other cryptocurrencies that the crypto investors appreciated. Some investors believe that dogecoin can grow big as time passes. But, others recommend avoiding investing in dogecoin due to its lack of fundamentals.
If you are someone with a keen interest in cryptocurrencies in India, we have something to offer – an upcoming online cryptocurrency course that will teach you about Bitcoin and other cryptocurrencies. The course will cover many topics including cryptocurrencies portfolio management, types of cryptocurrencies, the best cryptocurrency apps in India, etc. Therefore, it is a perfect course for those who want to know all about cryptocurrencies.