Crypto is a complex world with different coins that comprise it. Bitcoin, with other existing coins such as ethereum and dogecoin, is the leading cryptocurrency. Different platforms bombard readers with tokens, altcoin, and these might confuse a newbie in the cryptocurrency world.
Categories of Cryptocurrency
Different cryptocurrencies are available in the market. Bitcoin is the most popular as of the moment based on the asset’s global worth (or what is known as market cap). This is followed by ethereum. The remaining hundreds of crypto that investors deal with are categorized as altcoins or alternative coins, which include Cardano and Nano. These altcoins are less popular than the other two “mainstream” coins because bitcoin, as of the current, is ten times more popular than the Binance coin, the third most popular coin. Binance Coin is the Binance crypto exchange’s native coin.
Being familiar with Bitcoin, Ethereum, and altcoin when referring to other cryptocurrencies is power. However, there is also the latest called moonshots with a value of a fraction of a penny. These are called as such because if an investor purchases a few amounts and it booms, then a small sum becomes a thousand pounds.
When cryptocurrency is categorized in terms of size, it begins with bitcoin, followed by ethereum, altcoins, and moonshots (which are altcoins smaller in size). In addition to crypto categorized according to size, there is also crypto-based on their functions.
Included in the list are crypto coins which also have subtypes, crypto tokens that also have different kinds, NFT-supporting coins (like algorand that has an NFT-creating platform), stable coins (an example would be tether), and meme coins (with doge as the most popular) among others. The list of crypto-coins has different main functions, but all of these are created and operate through a blockchain.
A crypto coin is how it is named. It is a coin and is targeted to be used as a currency. This virtual coin can be used to buy goods and transfer money. This is the first main use of crypto and the intent why bitcoin was created. As a result, cryptocoin is used generally and interchanged with crypto-asset or cryptocurrency. Different kinds of crypto in the market cause confusion. BTC (bitcoin) works similar to coins like ADA (of cardano) and SOL (solana blockchain’s native coin). What makes the latter two coins different from bitcoin is that they are faster and more environmentally friendly.
Tokens work not only to send and receive digital money; rather, it does more than that. Tokens also have a number of different kinds. One of these tokens is stablecoins which are pegged at the same value as a fiat currency like the US dollar. This is suitable for investors who want funds in their crypto wallet but do not want to experience the coins depreciating during that time. These can store Bitcoin and swap it into Tether (or other coins), and the money will have more or less the same value as a dollar. Ideally, stablecoins are consistent in value. However, there are rare circumstances when these also dip in their value.
Another type is platform tokens that permit users to work on something on a blockchain. A popular platform token is UniSwap, where different tokens on ethereum can be exchanged without the use of centralized exchanges such as Kraken or Binance. Investors find this appealing because of the decentralised feature of crypto. Platform tokens permit this to occur with tokens and not only on coins that have their own blockchain. Another is memecoins which have value and are tokens aimed for a laugh. An example would be a memecoin with the name of the dog of Elon Musk, and then the value just keeps on increasing.
DeFi crypto is another kind, with the AVAX coin of Avalanche. This also works similar to platform tokens, where they exist for a specific purpose. All of these are within the boundaries of DeFi or decentralised finance. An example would be Avalanche. This platform permits users to create decentralised applications and programme smart contracts. In the DeFi platform, users use AVAX to stake, then obtain rewards and pay transaction fees.
In reality, most forms of cryptocurrency are tokens. If you want to make an investment with cryptocurrency, you can check the Bitcoin Loophole App. These could be platform coins like UniSwap, stablecoin such as tether, or memecoins such as dogecoin (these work similar to cryptocoins but are tokens and have limitations and are not built on their own blockchain).
With the rapid expansion of cryptocurrency in the market, there are innovations being created by new assets, such as the ethereum-based token called loopring. However, its unique set of features makes it stand out as its own platform, which works through the ethereum blockchain. Loopring is categorised as a token but is also an exchange protocol that is audited, open-sourced, and non-custodial.
Other Types of Coins Available in the Market
People are attracted to other kinds of coins at present such as metaverse coins like Decentraland (MANA). These metaverse coins are the native coins within different metaverses. For instance, Decentraland uses the coin MANA where people use to purchase things. NFTs are another kind of crypto. In simple terms, NFTs are digital versions of objects such as art where the value is more abstract.
This is similar to a painting where its value is different from another unless people bid on it. NFTs are not limited to art alone. This involves ownership of digital assets such as tweets to the masters for a song. Or it could be anything that can be stored digitally.
There are other coins that can be grouped into these categories. It is believed that there will be more categories that will be formed in the future as crypto’s nature is evolving. Cryptocurrency is still new in the field of finance and is still being established. It could create confusion, but for those who are into cryptocurrency, this is an exciting moment to watch.
If you want to engage in cryptocurrency, you have to work with reliable crypto trading platforms. It would be best to deal with platforms that are friendly to newbies and have high-security features.