Cryptocurrencies are currently more popular than ever and as the first cryptocurrency, Bitcoin has created a movement as the forerunner to the rest. However, there are plenty of other digital assets that have been created since the release of Bitcoin that is inching further into the curiosity of investors and becoming valuable cryptocurrency by making waves of their own.
In April 2013, the total value of all cryptos in circulation reached $1 billion. Four years later, that number went above $17 billion.
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What is Cryptocurrency?
Cryptocurrency is a digital asset usually built around a decentralized peer-to-peer network (the “blockchain”) that records all transactions, and time-stamps and links the transaction to the public key of the person who owns them. This makes it difficult to counterfeit. They can circulate without the need for a central authority such as a government or bank and can be traded on virtual exchanges, like stocks and bonds, or used to make purchases in real-world stores using mobile apps.
The first cryptocurrency to gain widespread adoption was bitcoin. Bitcoin was created in 2009 as a decentralized virtual currency by a person or group using the pseudonym Satoshi Nakamoto.
Most cryptocurrencies are designed to gradually decrease the production of currency, placing an ultimate cap on the total amount of currency that will ever be in circulation, mimicking precious metals. However, some have different mechanisms.
Bitcoin and most other cryptocurrencies are supported by a technology known as the blockchain, which maintains a tamper-resistant record of transactions and keeps track of who owns what. The creation of blockchains addressed a problem faced by previous efforts to create purely digital currencies: preventing people from making copies of their holdings and attempting to spend them twice.
The main units of cryptocurrencies are known as coins or tokens. The ultimate difference between the two is that one is intended to be a unit of exchange for goods and services, while the other is designed to store value. Cryptocurrencies are also used as units to carry out more complex financial transactions.
Crypto is created through a process known as mining. Bitcoin mining, for example, can be energy-intensive when it comes to verifying the authenticity of transactions. Those who perform these tasks are known as miners and are rewarded with newly created crypto.
Other assets use different methods to create and distribute tokens and many have a significantly lighter environmental impact.
The easiest way to get cryptocurrency though is to purchase it from cryptocurrency exchanges or another user.
Why Are Crypto Assets So Popular?
One of the most popular topics in recent years has been the cryptocurrency market. Many people probably know what it is and a few may even own cryptocurrency and because of that, there has been some speculation surrounding popular cryptocurrency.
Low Fees
As opposed to other types of online payment options that incur large transaction fees, there are very low fees associated with crypto transactions. These low fees make more sense for people to use digital currencies to pay for items online.
Cryptocurrencies Aren’t Associated with World Governments
Due to the decentralized nature of cryptocurrencies, they are not tied to any one centralized government. Because of this, they allow investors to protect their wealth against economic instability. This is one reason why Bitcoin has continued to rise over the years. The potential that cryptocurrencies can be safer than some government-backed currencies makes them more appealing.
Profit Potential
Cryptocurrencies are also a popular investment option because they can provide a platform for massive returns. If you buy Bitcoin while it’s at a low price, hold onto it, and watch it grow, you can profit off of that huge windfall. Lots of people who invested in cryptocurrencies before they got hot wound up making huge profits when cryptocurrencies became mainstream in recent years.
Ease of Use
Cryptocurrencies are becoming more widespread. The value of the top digital currencies has risen dramatically in the past year, showing that people worldwide see a lot of potential for blockchain’s decentralized system of payments. More online money transfer services now support cryptocurrencies, either directly or through a third-party processor, and this trend is expected to continue. Exchange platforms — many based overseas — are also developing tools to make it easier to buy and sell various cryptocurrencies.
Digital currency is becoming more popular and common with the number of people using it growing every day. The popularity of cryptocurrency will increase as more people begin to understand its legitimate value. Cryptocurrency is a safe, secure, and easy way to transact online — many customers prefer to pay with cryptocurrency because they feel secure knowing their money is protected and they aren’t paying exorbitant transaction fees.
Security
Though it’s become more difficult to protect your identity and money over the years, cryptocurrency has helped keep online payments safe. Online shoppers are increasingly turning to cryptocurrency to protect their identities and keep their money safe. Since security is one of the primary reasons why people use cryptocurrencies, it’s no surprise that many crypto enthusiasts also work hard at protecting their crypto-based assets.
Accessibility
Getting cryptocurrency is a simple and straightforward process. Not long ago, gaining cryptocurrency was difficult enough that almost no one knew anything about the concept. Nowadays it’s incredibly easy to get your hands on this digital currency: all you need to do is pick your favorite platform and follow the steps.
Getting cryptocurrency is easier than ever before — with your choice of several different platforms, you can pick which service works best for you.
It’s Seen as the Future
Crypto transactions are the future and many individuals are beginning to see their potential to disrupt the financial market. Cryptocurrency transactions are supposed to be more transparent, allowing for instant transactions between parties anywhere in the world. Trading your coins for the future can be a good idea if you invest in cryptocurrencies today.
One of the main benefits of cryptocurrency is that it’s a new kind of money, which gives people more control over their financial lives. It can also be a way to diversify your portfolio, and cryptocurrencies have shown impressive returns with major coins like Bitcoin and Ethereum skyrocketing in value. Many experts believe this is only the beginning of an entirely new asset class — and that digital currency and blockchain technology are going to change the world in many ways.
The Importance of Cryptocurrencies
There are more than 2,000 cryptocurrencies in circulation, with a collective market capitalization of more than $1.75 trillion. As decentralized platforms, blockchain-based cryptocurrencies allow individuals to engage in peer-to-peer financial transactions or enter into contracts. In either case, there is no need for some trusted central authority such as a bank or government structure.
The expectation is that cryptocurrencies will continue to develop based on this decentralization trend. The main challenge that cryptocurrencies face is the inbuilt scarcity that makes the digital tokens themselves durable.
Blockchain provides some specific benefits, but the larger trend is that we are moving toward a world where there is less and less need for trust. Blockchain-based cryptocurrencies are just one application of the decentralized ledger. The ledger and the consensus mechanisms that are used to reach an agreement between parties have far broader applications.
Although still a nascent industry, we are now beginning to see cryptocurrency projects that were once purely used as a store of value begin to branch out into more conventional sectors of the economy.
In recent years, major digital asset platforms such as Ethereum and NEO have moved beyond their initial use case as a store of value and are taking steps to allow seamless transactions between cryptocurrencies and traditional assets.
How Does Cryptocurrency Work?
Cryptocurrencies use open blockchain technology, decentralized by nature and built to be secure. It can record transactions in a way that is transparent and permanent, making it almost impossible to change any past transactions. This means no more double-spending. Each transaction is recorded in a block and several blocks are linked together cryptographically — creating the blockchain. Cryptocurrency relies on mining, which essentially means a network of users verifying each transaction within the cryptocurrency network.
For example, if a transaction is done between two parties, both parties must agree to the same token amount and the transfer will be recorded in the ledger. Any currency issued in this way has value as a trading material. With the current rules and regulations, it is possible to trade cryptocurrencies. This is because most of these laws and regulations were developed specifically for the financial market, which is closely related to the cryptocurrency market.
Investing in Crypto Assets
Buying cryptocurrencies securely involves four basic steps:
1. Choose Your Platform
When buying cryptocurrency, centralized exchanges are the easiest way to go. These exchanges act as a third party overseeing transactions to give customers confidence that they are getting what they pay for. These exchanges sell crypto at market rates, taking a small percentage of each trade as profit for their services.
Centralized exchanges require users to provide personal information and identification. This can increase the risk of identity theft, so these types of sites should not be used for casual cryptocurrency trades and investments.
Brokerage services also offer access to cryptocurrencies as well as stocks if you prefer a more traditional route. If you’re looking for an online brokerage, there are a few to choose from Robinhood, Webull, SoFi Active Investing, and TradeStation. If you’re looking for a more traditional brokerage that operates solely in the cryptocurrency world, look for pure-play cryptocurrency exchanges. These platforms typically offer more options in terms of cryptocurrencies, which can be beneficial, because they don’t offer stocks and bonds. The downside is that they don’t offer a lot of the features other brokers do — for example, on-platform storage for your crypto.
While centralized exchanges have made it easier for people to buy cryptocurrencies, fewer charge low fees and many lack the technical expertise that offers security benefits. Many cryptocurrency exchanges are susceptible to hacking but decentralized exchanges allow buyers to connect directly with sellers making them more difficult to hack. They are often also much cheaper. Peer-to-peer transactions put control in the hands of buyers and sellers.
2. Choose How You’ll Pay
One of the first hurdles to owning cryptocurrency is determining how you’ll pay for it. Some exchanges allow you to use a credit card, but this can be risky because interest costs could make your losses worse should your investments decline in value. However, if you already own some crypto, you can transfer it into your account and use it for trading — just make sure the exchange that you’re using allows trading between the assets you’re looking at. Some exchanges have more trading pairs than others, so read each detail carefully before investing.
A more popular option is to purchase crypto using fiat currency such as the U.S. dollar. Seasoned investors will more than likely trade their holdings for another type of cryptocurrency.
Many crypto exchanges allow you to trade digital currency through your computer, tablet, or mobile device using a digital wallet. You can also buy cryptocurrency through any online brokerage account.
3. Add Value to Your Cryptocurrency Wallet
When it comes to getting started, you have a few options. You can fund your account with fiat currency, depending on what the exchange accepts. Some exchanges also allow credit card purchases of cryptocurrency; while this is a riskier move with a volatile asset, it may make sense if you’re trying to grow your portfolio of cryptocurrencies. If you already own cryptocurrencies, you can transfer them into your account from a digital wallet. Just be sure not to trade a cryptocurrency that doesn’t have another trading pair with it. Finally, keep these fees in mind: exchanges charge different fees for buying with fiat or funding with cryptocurrency.
4. Select a Cryptocurrency
One of the key factors when choosing which cryptocurrency to invest in is to thoroughly understand your motivations. Why are you investing? Are you looking for an investment that will increase in value? Are you looking to carry out transactions using cryptocurrency? Are you interested in using the underlying technology via decentralized apps? Answer these questions and the choice will come a lot more easily.
Using Cryptocurrency
Cryptocurrency has been around for a while, but it’s only recently that people have started taking it seriously. However, the idea of buying a coffee with it still seems far-fetched. Despite the increasing demand for crypto, large transactions involving them are scarcer. On eCommerce sites, cryptocurrency can be purchased along with other payment methods. Several tech companies that sell tech products accept cryptos.
Even though cryptocurrencies are less common as a payment method in retail stores, companies can still use them to generate interest and brand awareness. For example, a company can offer a discount for people who pay for the company’s products with a cryptocurrency. Instead of a cashback or another benefit, the company can offer consumers a discount of 5 or 10 percent for paying with cryptocurrency.
The main advantage of accepting cryptocurrencies as a payment method is the security it provides. Due to blockchain technology, the chances of identity theft and credit card fraud are slashed. Payments made in cryptocurrencies are irreversible, which means that payment frauds and chargebacks are impossible. Hence, retailers won’t risk losing money or getting sued.
But what about buying real-world products?
A new startup is trying to change that with a platform called Zippie, which is being developed by the team behind the popular Jolla smartphone. This would allow customers to buy products from brick-and-mortar stores using cryptocurrencies. The platform is currently live in Finland, with a public beta launch planned for other countries soon. The app works on the smartphone and a QR code is generated.
Cryptocurrency Fraud and Scams
Unfortunately, cryptocurrency crime is on the rise. Cybercriminals are constantly penning new and sophisticated attacks, like the CoolMiner program that mines cryptocurrencies through the victim’s central processing unit and Graphics Processing Unit, slowing down their computer and raising electricity bills.
Criminals are also hacking into exchanges and stealing cryptocurrencies like Bitcoin, and investing in cryptocurrency-related Ponzi schemes that encourage unsuspecting investors to purchase their tokens in the false hopes of skyrocketing their assets.
Data breaches and scams happen across industries, and in the case of cryptocurrencies, all those digital assets that have been hacked and stolen typically have no way of being retrieved.
Cryptocurrency scams include but are not limited to:
Fake websites: Bogus sites which feature fake testimonials and crypto jargon promising massive, guaranteed returns, provided you keep investing.
Virtual Ponzi schemes: Cryptocurrency criminals promote non-existent opportunities to invest in digital currencies and create the illusion of huge returns by paying off old investors with new investors’ money.
“Celebrity” endorsements: Scammers pose online as billionaires or well-known names who promise to multiply your investment in a virtual currency but instead steal what you send. They may also use messaging apps or chat rooms to start rumors that a famous businessperson is backing a specific cryptocurrency. Once they have encouraged investors to buy and drive up the price, the scammers sell their stake, and the currency reduces in value.
Romance scams: The FBI warns of a trend in online dating scams, where tricksters persuade people they meet on dating apps or social media to invest or trade in virtual currencies. The FBI’s Internet Crime Complaint Center fielded more than 1,800 reports of crypto-focused romance scams in the first seven months of 2021, with losses reaching $133 million.
There is a lot of fake cryptocurrency information online and it can be difficult to differentiate between legitimate and illegitimate businesses. One of the main reasons that people fall victim to cryptocurrency scams is because they are unable to identify real-life applications for blockchain technology or other cryptocurrencies.
Storing Cryptocurrency
For cryptocurrencies to be kept safe, you must keep your wallet secure against hackers and other attacks. The most common way is to use a cryptocurrency wallet — physical hardware or software that stores your private crypto wallet.
Not all crypto wallets are created equally. There are hot wallets, which are connected to the internet and easy to use but vulnerable to hacks and theft; and there are cold wallets, also known as hardware wallets, which are disconnected from the internet and safer but less convenient. Online crypto wallets make it easy to buy, store, and swap your coins — but anyone who can access your account can also steal them.
Mining Cryptocurrency?
The concept of cryptocurrency mining might be a bit confusing, but it’s a crucial part of the blockchain process. What it involves is verifying transactions on the network and adding them to an ever-growing public ledger, called the blockchain. Mining is the mechanism that underpins all cryptocurrencies, giving us a way to establish validity while making sure no one can spend the same dollar twice.
Mining bitcoin is a costly endeavor. As the bitcoin network grows and more people invest in powerful computers to mine new coins, the difficulty of the equations required also increases. For example: To earn 1 bitcoin, miners must solve complicated math problems that get harder as time goes on. It’s estimated that 0.21% of all of the world’s electricity goes to powering Bitcoin farms.
While crypto mining is just a fantasy for the average person, you can earn crypto by contributing to the system in other ways. In a proof of stake model, users who hold enough currency are randomly selected to act as validators. This means that anyone at all can participate, as long as they have a stake in the network — and with cryptocurrencies rising in value at the rate they are, now is the best time to get involved.
What is a Blockchain?
Blockchain is a distributed database. In this database, transactions carried out during the performance of activities are recorded, which makes it possible to track the current state of all activities in the system. These records are called blocks. When a block is completed, a new one appears in its place. A transaction is an operation that affects the state of the system.
In addition, a transaction is an operation that can be performed only in several activities, each of which is represented by a separate block. In addition, any transaction should be resolved by the system in the same block in which it was initiated. The block is created not immediately but after a certain time. Satoshi Nakamoto was the first to realize the potential of blockchain technology and invented Bitcoin. Later, the technology of blockchain was used by other cryptocurrencies.
The most important feature of the database is that it is decentralized. It makes it possible to manage any entity independently. In addition, there should be some restrictions on access to the database. Usually, it is organized so that the data is divided into sections and the sections are united into chains.
Each transaction must be carried out by the user. This can, for example, be the creation, transfer, or destruction of the asset. The system records this transaction in the block and confirms the user’s action. Confirmation increases confidence in the transaction, as it shows that it has been performed. Confirmation also guarantees that it will remain in the system forever.
The best example of the use of blockchain with cryptocurrency is the Bitcoin network. Operations are made in the form of a smart contract. Smart contracts are executed by the participants’ computers (nodes).
Proof of Work vs Proof of Stake
Proof of Work and Proof of Stake have been two validation techniques for verifying transactions in cryptocurrency. Both are used to ensure that transactions between users are verified, and both reward those who do so with a small number of coins — not enough to become wealthy, but enough to incentivize them to keep doing their blockchain duties.
Proof of Work
Proof of work (PoW) is a method of verifying and tracking the validation of new blocks on a blockchain through mining. When a block is validated, it can be added to the existing blockchain. Validating a block is hard, it takes a lot of processing power and time. This ensures that to change any information on the blockchain, a hacker would have to re-validate all previous blocks.
Proof of work is used as a measure of computational effort that ensures all the nodes on a blockchain are functionally equal and have access to the same data. When you transact and send money, information is broadcast to the blockchain network. Other members of the network then verify and confirm that your transaction is valid, and place your transaction in a “block”, a part of the blockchain. This block of transactions is then broadcast to all nodes on the network for verification and confirmation.
Because of the way that proof of work works, or the way that the algorithms are designed, it is extremely difficult to simply guess or “hack” the system. By completing a certain amount of work, the miners can confirm the authenticity of the transactions and the creation of new units of the cryptocurrency.
Proof of Stake
In a proof-of-stake protocol, cryptocurrency owners can participate in the network by helping to process transactions. They do this by staking their assets and being rewarded for their efforts.
When a block of transactions comes in, it gets passed around through the network of participants until a consensus is reached. If the next block to be added to the network is accurate, then those who helped process it are given a reward.
The best part of proof-of-stake is that the amount of coins you have is not tied to how many transactions you can process but how many transactions you can process accurately. This makes the system fair and much more decentralized than proof-of-work.
Proof-of-stake models also improve security because the more coins you have, the more reason you have to protect the network.
Altcoins
Altcoins are a collection of cryptocurrencies that are alternatives to Bitcoin (BTCUSD). Altcoins also have a significant value, and some even have their application tokens. They share characteristics with Bitcoin, but also have different uses and features. For example, some altcoins can handle smart contracts or offer lower transaction fees than Bitcoin.
Many altcoins have a small market capitalization, which indicates that the team is small and the altcoin is still to develop and grow. The altcoin market is very volatile. One day, altcoin prices may increase 10 times, and the next day they may decrease 10 times. Make sure you are aware of the risks. The altcoin market is also a charity market.
Cryptocurrencies
Cryptocurrencies are intended to help convey value across a decentralized network of users. Many different altcoins do this in different ways. Some, like EOS, aim to be a platform — others, like Ether, are simply a token used to reward miners on the Ethereum network.
Cryptocurrencies (like Bitcoin) are intended for payments, transmitting value across a decentralized network of users.
Tokens
There are also blockchain-based tokens that serve a unique purpose. One example is a token issued as part of initial coin offerings (ICO) that represents a stake in a blockchain or decentralized finance (DeFi) project. If the tokens are linked to the value of the company or project, they can be called security tokens (as in securities like stocks, not safety). Other tokens have a particular use case or function.
Alternate Crypto Assets
1. Ethereum (ETH)
Ethereum is an open-source, blockchain-based computing platform that enables the development of decentralized applications and smart contracts. With a focus on flexibility, Ethereum can be used by both developers and businesses to develop powerful applications. Community members can use these applications to bypass centralized third parties such as banks or government entities, allowing for more efficient services and products to be built in a trustless environment.
Ethereum enables developers to build a digital currency called Ether, which can be transferred between accounts and used to compensate participant nodes for computations performed. Ethereum provides a decentralized virtual machine, the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes. “Gas,” an internal transaction pricing mechanism, is used to mitigate spam and allocate resources on the network. It is similar to Bitcoin in that Ethereum has a blockchain that records transactions.
Ethereum acts as a platform for smart contracts to be built on. In simple terms, smart contracts are the instructions for a transaction of Ethereum cryptocurrency like Bitcoin to be executed. It’s sort of like the Ethereum Virtual Machine (EVM), but for smart contracts instead of dApps. More broadly, Ethereum provides a cryptocurrency token called ether with intrinsic value and a blockchain-based computing platform.
2. Litecoin (LTC)
Litecoin is an open-source cryptocurrency (i.e. virtual currency) that was created to improve upon Bitcoin’s shortcomings. Litecoin can be purchased and sold on online exchanges and converted to fiat money (i.e. legal tender backed by the government) using services like ShapeShift.
Litecoin was designed to be created at a fixed rate of 84 million units, four times that of Bitcoin. The supply is managed using a system known as “scrypt”. Mining is a process in which users can generate more Litecoin by solving a computationally difficult task. Litecoin is considered to be the “silver” to Bitcoin’s “gold”.
Litecoin was created in 2011 by former Google engineer Charles Lee. As of June 2016, there are over 7.5 million Litecoins in circulation. Like Bitcoin, Litecoin is based on a decentralized blockchain and uses a Proof of Work (PoW) hashing algorithm.
3. Cardano (ADA)
Cardano was created through extensive experimentation and peer-reviewed research, with a special emphasis on developing an approach for smart contracts that is not only highly secure but also scalable. The system has been built from the ground up by engineers, mathematicians, and cryptography experts. Cardano’s Ouroboros proof-of-stake algorithm was the first of its kind, and it underwent extensive peer review.
The result is that the platform can be significantly more energy-efficient, flexible, and scalable than its counterpart in Ethereum, as well as more secure.
It is also one of the only cryptocurrencies to have a scientific philosophy and research-based approach. The team behind Cardano consists of a large group of expert engineers and researchers, who have been working on the project for several years.
Several complex applications and use cases for smart contracts are currently in development for Cardano, including a decentralized exchange, identity management systems, and a treasury system to oversee funds generated by the network.
4. Polkadot (DOT)
Polkadot is a cryptocurrency that connects public and private blockchains to enable interoperability and communication between them. Its protocol is designed to connect permissioned and permissionless chains, along with oracles so that systems can work together under one roof. Its core component is its relay chain, which allows the interoperability of varying networks.
Polkadot also conducts security audits through “DPOS”, a popular consensus protocol that the Ethereum network currently employs.
5. Bitcoin Cash (BCH)
Bitcoin Cash BCH was forked from the original Bitcoin on August 1, 2017. During that process, Bitcoin holders received an amount of Bitcoin Cash BCH proportional to the amount of Bitcoin they held. At the same time, Bitcoin Cash BCH built on the features provided by the original Bitcoin while also upgrading and innovating certain functionalities. Notably, the inclusion of smart contracts in the platform’s blockchain allows for complex transactions to be executed more efficiently.
Bitcoin Cash has gained a lot of attention in the past few months because of its value. For instance, in December 2017, it was the most valuable cryptocurrency on the market. It remains one of the most traded and popular cryptocurrencies today, though its value has dropped since then. Additionally, Bitcoin Cash BCH has been added to several fiat-to-crypto currency exchanges, which has increased its accessibility for new users.
Bitcoin Cash is used as a method of payment in a variety of cases. Aside from being a major cryptocurrency, it is accepted as a form of payment by several online platforms. Bitcoin Cash has also been used for real-world transactions, for instance, in China, several shops accept Bitcoin Cash transactions. Furthermore, in Japan, a Bitcoin Cash-based prepaid payment card is available.
6. Stellar (XLM)
Stellar is an open blockchain network that connects financial institutions for large transactions. Huge transactions between banks and investment firms—typically taking several days, involving several intermediaries, and costing a good deal of money—can now be made nearly instantaneously with no intermediaries and cost little to nothing for those making the transaction.
Though Stellar has positioned itself as an enterprise blockchain for institutional transactions, it is still an open blockchain that anyone can use.
The ability to send a transaction through a variation of the Stellar payment network (“Stellar p2p”) makes Stellar an open blockchain system with which anyone can send funds. If a user wishes to privately send funds through Stellar’s payment network, they can choose to do so.
Stellar allows its users to send and transact native digital currency, lumens, which are designed to be used for micro-payments.
The reason for the recent rise in Stellar lumens (XLM) is that it was recently added to Coinbase.com, one of the largest cryptocurrency exchanges in the world.
The addition of Stellar to the Coinbase exchange means that it is now accessible to the millions of users that Coinbase has to offer.
Anyone can become a validator on the network, which means they can approve transactions. Anyone can participate in the Stellar network and use the lumen, the native currency of the network. And, anyone can build on Stellar by creating an application that uses Stellar’s API. Stellar aims to provide a platform for institutions and individuals alike.
This allows Stellar to be used to send any type of currency across borders, including cryptocurrency, fiat, Bitcoin, and even other fiat currencies.
7. Dogecoin (DOGE)
Dogecoin, the 2018 meme of the year, is surprisingly the second most popular cryptocurrency in the world. The meme coin was created in 2013 by Billy Markus and Jackson Palmer as a way to comment on the surging price of cryptocurrencies at the time.
After being created as a joke in 2013, Dogecoin quickly rose to become one of the most popular coins in the world. It achieved this status while also remaining one of the funniest.
Dogecoin’s community loves to laugh and play with memes and this is what makes this cryptocurrency so popular. The Dogecoin community loves to reward lots of people and this is one of the main reasons why this currency is so easy to mine.
The coin community is one of the friendliest in the cryptocurrency world. Dogecoin has a dedicated team of developers and a large user base that is active on forums and Reddit.
The coin is mostly used for tips and donations. Dogecoin has also sponsored multiple events, including Nascar driver Josh Wise’s car, a Winter Games bobsled team, and the Jamaican Bobsleigh team.
8. Binance Coin (BNB)
Binance Coin (BNB) is a utility cryptocurrency that can be used to pay exchange fees. Those who use the token to pay for the platform’s fee get to trade at a discount. The Binance Exchange, one of the largest exchanges in the world, uses BNB as its native currency.
Binance Coin was initially an ERC-20 token issued on the Ethereum blockchain.
Binance has managed to create a long-lasting and profitable business model, primarily by charging its users fees for the transactions they perform.
The fee structure is simple, but it’s effective: all users pay a 0.1% trading fee, which covers the cost of running the exchange. This amount is paid directly to Binance’s native currency, BNB.
Binance has developed a platform to merge payment methods, decentralized exchange, and blockchain. The Binance token can be used as a trading instrument on the platform, and also as an efficient payment method for the exchange’s fees.
The first two advantages of using the token are obvious — it gives users a discount on crypto trading and faster-than-usual withdrawals.
9. Tether (USDT)
Tether was among the first and most popular stablecoins, or cryptocurrencies that attempt to stabilize their market value by pegging it to a currency or other external reference point. Because most digital currencies have experienced frequent periods of dramatic volatility, stablecoins attempt to smooth out price fluctuations to attract users who may otherwise be cautious. Tether is pegged to the U.S. dollar; the system allows users to more easily make transfers from other cryptocurrencies back to the U.S.
When the price of bitcoin inched to the $420 level in September 2017, Tether (USDT) began trading at a premium on exchanges. This notion of stability gave holders of the cryptocurrency reason to celebrate — if you had one US dollar, you could exchange it for one tether (1 USDT = $1), and theoretically, you would have a dollar’s worth of cryptocurrency.
10. Monero (XMR)
Developed entirely by volunteer work, Monero is a digital currency that uses cryptography to secure transactions, verify balances, and control the creation of new units. Unlike traditional currencies, Monero is decentralized and distributed. It is open-source and accessible to all members of the public without any central authority whatsoever: there is no central bank, single administrator, or governing body.
Monero uses a public ledger to record transactions while new units are created through a process called mining.
In many ways, Monero is a response to the growing demand for private, secure, and untraceable transactions online. Transactions in Monero are anonymous and unlinkable. Amounts transferred are hidden, as well as the sender, receiver, and transaction itself. Monero uses a cryptographically sound system that allows anyone to participate in the mining process.
11. Solana (SOL)
Solana is the world’s first blockchain dedicated to decentralized applications. Solana has achieved throughputs of 20,000 transactions per second and can support smart contracts on mobile and web devices. Its lightning-fast performance allows users to interact with dapps with seamless ease, making it a viable option for businesses looking to incorporate blockchain technology into their infrastructure.
12. Polygon (MATIC)
Polygon is an Ethereum-based token that powers the Polygon Network — a protocol and framework for building and connecting blockchain-compatible DApps that can interact with each other. These interconnections are made possible through a special implementation of the State Channels, which allows for off-chain interactions between network participants and can be used to build scalable, speed-optimized applications.
MATIC is a permission-based, low-latency Blockchain that features an asynchronous mechanism for exchanges, payments, and orders using off-chain matching. The MATIC Blockchain runs on a consensus base proof of stake algorithm — the only known Blockchain that complies with all stable token orthogonality requirements through its asynchronous design.
13. Tron (TRX)
The TRON Protocol and the TRON (TRX) token are based on the Ethereum ERC20 standard. It is a blockchain-based, decentralized protocol that aims to construct a worldwide free content entertainment system with distributed storage and blockchain technology. The protocol allows each user to freely publish, store and own data, and in the decentralized autonomous form, decides the distribution, subscription, and push of contents and enables users to actively participate in the ecosystem.
14. Ripple
Ripple is a distributed ledger system that was founded in 2012. Ripple can be used to track different kinds of transactions, not just cryptocurrency. The company behind it has worked with various banks and financial institutions.
Since cryptocurrencies are all about cash flow, payments become much easier to track than some other payment methods like money transfers or checks — and the technology is continuing to advance as well.
15. Shiba Inu (SHIB)
Although Shiba Inu is a Memecoin, as is a trendy cryptocurrency, it has seen its prices rise tremendously since its release. However, it’s important to note the risks involved with investing in cryptocurrencies. Cryptocurrencies such as Shiba Inu experience high levels of volatility and risk; therefore, investors need to be aware of these factors when making investment decisions.
Are Altcoins The New Bitcoin?
As the cryptocurrency market has experienced explosive growth in the second half of 2017, altcoin prices have followed suit, leading to a notable decline in Bitcoin’s market share. Globally, nearly 60% of all cryptocurrencies are currently in circulation, up from less than 10% at this time last year
The total market cap of all cryptocurrencies in circulation surpassed $200 billion in January 2018 — an all-time high, up from $17 billion at the beginning of 2017. The majority of these currencies are derived from Bitcoin’s open-source protocol and are being used as a method of payment between online buyers and sellers.
Despite several reviews across the Internet on the downsides of Bitcoin and other cryptocurrencies, the concept is anything but dead.
While the number of competing currencies continues to grow, most are regarded as mere “me-too” imitators struggling for adoption.
This is especially important in light of growing concerns that governments will launch their state-issued cryptocurrencies.
Still, with the functionality of other cryptocurrencies developing, investors and the community as a whole, are all eager to see what’s next.
