Since the release of Bitcoin, the usage of cryptocurrency has exploded. Though the exact active currency numbers fluctuate and values of individual currencies are extremely volatile, the overall market value of all the active cryptocurrencies is generally on an upward trend. At any given time, there are hundreds of cryptocurrencies that trade actively.
The types of cryptocurrencies which we described here are marked by stable adoption, user activity, and relatively high market capitalization (in most cases, larger than $10 million):
1. Bitcoin
Bitcoin is the world’s most widely used cryptocurrency. It’s generally credited with bringing the movement into the mainstream. The market cap and individual unit of Bitcoin consistently dwarf (by a factor of 10 or more) that of the next most popular cryptocurrency. Its programmed supply limit is 21 million Bitcoin.
People and companies are increasingly viewing Bitcoin as a legitimate means of exchange. Many well-known companies accept Bitcoin payments, though most of them partner with an exchange to convert Bitcoin into U.S. dollars before they receive their funds.
2. Litecoin
Litecoin was released in 2011. It uses the same basic structure as Bitcoin. There are fundamental differences, including a higher programmed supply limit (84 million units) and a shorter target time for block chain creation (2.5 minutes). Also, Litecoin’s encryption algorithm is slightly different. Usually, Litecoin is the second- or third-most popular cryptocurrency by market capitalization.
3. Ripple
Ripple was released in 2012, and it’s noted for a “consensus ledger” system that significantly speeds up the times for transaction confirmation and block chain creation. With Ripple, there is no formal target time, but the average is every few seconds. Also, Ripple is more easily converted than other cryptocurrencies. It has an in-house currency exchange that can convert Ripple units into U.S. dollars, euros, yen, and other common currencies.
However, some critics have noted that Ripple’s network and code are more susceptible to manipulation by sophisticated hackers. Therefore, it may not offer the same anonymity protections as Bitcoin-derived cryptocurrencies.
4. Ethereum
Ethereum was launched in 2015. It makes some noteworthy improvements on the basic Bitcoin architecture. In particular, Ethereum utilizes “smart contracts” that enforce the performance of a particular transaction, compel parties that they should not renege on their agreements, and contain mechanisms for refunds if one party happens to violate the agreement. Though “smart contracts” represent an essential move toward addressing the lack of refunds and chargebacks in cryptocurrencies, it remains to be seen if they are enough to solve the problem completely.
5. Dogecoin
Dogecoin is a variation of Litecoin. It is denoted by its immediately recognizable Shiba Inu mascot. Dogecoin has a shorter block chain creation time (one minute). There are a vastly greater number of Dogecoin coins in circulation. Its creators’ target of 100 billion units mined by July 2015 was met. There is supply limit of 5.2 billion units mined every year thereafter, and no known supply limit. Therefore, Dogecoin is notable as an experiment in “inflationary cryptocurrency”. Because of this fact, experts are watching it closely to see how its long-term value trajectory varies from that of other cryptocurrencies.
6. Coinye
Coinye is a semi-defunct cryptocurrency. It’s worth mentioning solely for its unusual backstory.
Coinye was developed in 2013 under the original moniker “Coinye West”. It was identified by an unmistakable likeness of hip-hop superstar Kanye West. In early 2-14, shortly before Coinye’s release, West’s legal team caught wind of the currency’s existence. They sent Coinye’s creators a cease-and-desist letter.
To avoid legal action, the creators removed “West” from the name; they changed the logo to a “half man, half fish hybrid,” resembling West, and released Coinye as planned. Because of the hype and ironic humour surrounding its release, the currency attracted a cult following among cryptocurrency enthusiasts. West’s legal team filed suit, which compelled the creators to sell their holdings and to shut down Coinye’s website.
While the peer-to-peer network of Coinye remains active and it is still technically possible to mine it, the person-to-person transfers and mining activity have collapsed to the point that Coinye is essentially worthless.
Read on to find out about the advantages and disadvantages of Cryptocurrencies. To learn more about the different types of cryptocurrencies available and to see their ranking, review our article: Top 25 Cryptocurrencies By Market Cap
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