Types of cryptocurrencies

Bitcoin is the latest sensation which has taken the world with it. However, the concept just came out last year; it is thirteen years old. We may know about the year 2021 because of Elon Musk talking about it. There are different varieties like Ethereum, Litecoin, Polkadot, Stellar, Cardano and son on. The complete field of cryptocurrency needs an insightful market research, and you can also check out some of the trends that are followed and advised by the investors to do. Visit the website to learn from. 

Additionally, there are also people who think that bitcoin and cryptocurrencies are synonymous. It means that they think there is only one cryptocurrency and it is called Bitcoin. This is why it’s important to learn cryptocurrency terms and definitions to understand exactly what you are investing in. Cryptocurrency terminologies, abbreviations, and acronyms can be overwhelming for both newbies and even seasoned investors, so research and learning are a must. 

There are different kinds of cryptos available for trading as well. You can trade them in the Bitcoin Era. 

The altcoins are also classified into many other coins, such as utility coins, stablecoins, meme coins, etc. Here are some detailed discussions about the different types of cryptocurrency.

Stablecoins

Stablecoins are tokens which are designed in a way to give support to the volatility of cryptocurrencies. Each of the stablecoins is pegged to a fiat currency. Most of them are connected to the USD. However, there are also stable coins which are pegged to the Euro, Yen, and other fiat currencies. For instance, you might have heard about tether which is one of the worthiest of the stablecoins. It facilitates a large number of trade, when it comes to Cryptocurrency exchange altogether. 

In most cases, the value of one stablecoin is equal to one of the respective cryptocurrencies. We can divide the stablecoins into three sections, such as the fiat-collateralized crypto, crypto-collateralized, and service-based stablecoins. In the first section, it is connected to a fiat currency, and the value goes up and down with the fiat currency. When the pegged crypto goes down in the graph, the stablecoin goes down too. And the last category is not pegged with anything but has some free rules. It can always be a decision to make the value more or less based on the availability of it. 

Utility tokens

Utility tokens are service-based or goods-based tokens. It means some particular service provider can issue one crypto for their network only. In such a situation, people can use that particular coin for that particular service only and not something else. For example, there is a utility coin called BAT (Brave’s Basic Attention Token). People can only use it on Twitter, or to tip content creators or other services that have integrated this particular utility token.

Security token

While using the security tokens, one must have a device containing the user’s identity. The device also stores personal information. To gain access to the access, one must plug in and use the security tokens. The security tokens are completely dependent on the identity verification of a user.

Meme Coin

There is a segment of cryptos which are called meme coins. These are non-serious types of cryptography. The cryptos were inspired by the memes circulating all around the world. For example, you must have known the face of Shiba Inu by now. The crypto named Dogecoin was completely inspired by it. People around the world did not take memecoin seriously until Elon Musk openly talked about it. He also stated that memecoins also have potential in them. Since then, memecoins have also become a huge thing. It has become quite popular as well. This is quite similar to when Dogecoin was released, and it was created as a joke by some of the Doge engineers. In spite of the fact that the popularity of several Bitcoins declined during the lockdown and the Covid period, in this case, there is always a surge in the popularity of this currency worldwide. 

Ethereum

Ethereum is the network that backs the crypto called Ether. The Ethereum blockchain is also an open ledger just like the Bitcoin blockchain. The main difference between Ethereum and Bitcoin is the speed of transactions. Buterin invented it in 2014. When bitcoins are compared with gold, Ethereum is also called “the digital silver.” The position of Ethereum is just after Bitcoin. It has better flexibility option, and by now, and with effect from 2015, it has gained much popularity among all other types of Bitcoins.