As a crypto newbie, it can be overwhelming to sift through the thousands of digital currencies out there. Some are new and some are old, but they all have distinct differences that make them unique. The number of cryptocurrencies available over the last few years has exploded, and each one brings unique features to the table.
Defining Cryptocurrencies
Cryptocurrencies, also known as “digital assets,” are based on blockchain technology. The decentralized and public blockchain ledger of transactions allows anyone to verify the validity of transactions without a centralized authority.
Each transaction is verified by miners—people who use their personal computers to solve complex mathematical puzzles. In return, they receive cryptocurrency as a reward for their work. This method of verification prevents dishonest transactions from taking place and ensures that the system runs smoothly.
- Bitcoin
The cryptocurrency Bitcoin was created in 2009 by Satoshi Nakamoto, a mysterious programmer or group of programmers. While Bitcoin is the first and most commonly known cryptocurrency, there are thousands of others, such as Ethereum and Litecoin, that have spread from niche markets to everyday life.
Bitcoin is decentralized—meaning that it isn’t controlled by any individual or organization like a bank or government—and transactions occur directly between users, who can remain anonymous if they so choose. BTC price has been skyrocketing for the past several months and recently hit an all-time high of $19,044.03.
- Ethereum
Ethereum is a cryptocurrency and a blockchain platform whose smart contracts make it an increasingly popular system for program developers to use. It’s also been experiencing tremendous growth lately, with its price increasing by more than 12,518% since the start of April 2016.
Ethereum is still a relatively new phenomenon, but its popularity exists due to the potential applications that it’s capable of. Programmers have used Ethereum to create smart contracts that execute automatically when certain conditions are met, and non-fungible tokens (NFTs) that are unique and can’t be substituted for others.
- Tether
Tether (USDT) is a cryptocurrency that’s supposed to be backed 1-to-1 by the U.S. dollar. Like other forms of cryptocurrency, Tether is decentralized and exists on a blockchain, meaning it’s not issued or controlled by any government or bank. Unlike some other forms of cryptocurrency, though, Tether is a stablecoin: it’s not intended for use as an actual currency (like Bitcoin or Ethereum), nor does it have much real-world value beyond its use as a speculative investment.
- U.S Dollar Coin
USDC is the first cryptocurrency supported by CENTRE, a new open-source project based on the same team that built the Tether platform. USDC is designed to facilitate easy transfer of money between exchanges and wallets.
- Binance Coin
The idea for Binance Coin (BNB) was first introduced in an ICO in July 2017. During this initial coin offering, the company raised approximately $15 million from investors who were eager to back the exchange’s latest venture. The company promised to make it easy for users to pay for transactions on its platform with BNB, which would be created and distributed by the company. The currency is named after its parent company, Binance.
BNB crypto price prediction based on forecasts suggests that it may rise to $292.75 by the end of 2022, $425.73 by May 2023, and $4523.72 by 2030, which is a vast increase compared to the current price of $258.56.
- XRP
XRP is a transferable asset that can be used to bridge different currency types, including fiat currencies and other major cryptocurrencies. Ripple is a payment processing system that allows organizations to conduct transactions across various networks. It does this by using XRP—a digital currency designed for institutional use, and also the first currency created by Ripple Labs. Ripple has been performing well since its launch in 2012, and the XRP price has been growing steadily since then. This growth has led to many speculations on where the price will be in the future.
- Binance USD
Paxos and Binance, two of the biggest names in blockchain and crypto, have collaborated to create a stablecoin that is worth one U.S. dollar. The new currency, called BUSD (Binance USD), has been launched by Paxos, a New York-based financial technology company that provides blockchain solutions to banks, corporations, and governments across the world.
It also allows them to keep their funds safe from price volatility as it would allow them to convert back into fiat currencies without having to sell their crypto holdings at market prices.
- Cardano
Cardano is an open-source, decentralized platform for cryptocurrency and smart contracts. One defining feature of Cardano is that it is the first blockchain platform to use a scientific, peer-reviewed approach to development. ADA is the token used on the Cardano platform. It can be staked in order to participate in securing the network and receive rewards for doing so.
- Solana
Solana, a blockchain platform developed to facilitate decentralized finance (DeFi) applications, is one of the many projects launched in the wake of Ethereum’s success. Solana is designed to be faster and more secure than other blockchains.
Solana was developed by an experienced team of computer scientists who have led successful projects and built hardware for NASA. The company raised $4 million in a private presale and $40 million in a public presale.
- Dogecoin
The coin’s founder Jackson Palmer has left the project, and he feels that the community has strayed far from the original vision for Dogecoin as a currency for microtransactions rather than large purchases.
Ultimately, it’s up to each individual investor whether or not they want to contribute to Dogecoin’s economy—but if you do choose to put your money into Dogecoin (or any other crypto), remember that it’s an asset that requires careful consideration and research.