Types of Cryptocurrency
Cryptocurrency is a digital or virtual currency that uses cryptography for security and anti-counterfeiting measures. Some cryptocurrencies are decentralized meaning they aren't issued by any government like traditional currency, while others are centralized (e.g., Ripple) meaning they are issued by one authority. Furthermore, there are multiple types of cryptocurrency based on what blockchain they use; this article will detail the four major categories including coins like Bitcoin and Litecoin, tokens like Ethereum and NEO, forks like Bitcoin Cash or Gold 2.0, and privacy coins like Monero or Dash. You can also take help from teslacoin for crypto trading.
Coins like Bitcoin run on blockchain technology which uses mathematical equation solving to create new blocks in the chain; these equations become progressively more difficult over time, requiring ever greater computing power to create new blocks. This consensus model (i.e., the process of solving the equations) is known as Proof-of-Work and requires miners to perform time and energy-consuming tasks, verifying transactions for coins in exchange for newly minted coins; this is why the cryptocurrency is often referred to as "mining."
Tokens like Ethereum share some characteristics with coins but there are important distinctions: 1) they run on a blockchain that has smart contract functionality, meaning it can execute code automatically, 2) only one type of token exists per blockchain (unlike currencies which can have multiple types), and 3) tokens aren't used for making payments so much as operating on DApps (decentralized applications).
As the year 2017 is coming to a close, it is evident that cryptocurrency has become more than just a passing trend. With its popularity constantly increasing and publicly recognized companies such as Overstock, DISH Network, Microsoft, and Dell accepting it as payment, we can perhaps expect 2018 to be an even bigger year for cryptocurrencies than ever before.
However, there are still many people who remain unaware of what exactly cryptocurrency is and how it works. For this reason, I have decided to write this article in order to present some of the most popularly used cryptocurrencies out there today.
Keep in mind that this list of types of cryptocurrency is not comprehensive but only includes the ones that are most well-known or have attained significant success.
The first type of cryptocurrency that I would like to discuss is called Bitcoin. This currency was launched in 2009 by a person or group of people under the pseudonym Satoshi Nakamoto, who posted a research paper on The Cryptography Mailing list at metzdowd.com announcing their invention of Bitcoin. Since then, it has seen unparalleled popularity and market share growth despite its volatility issues, which are common characteristics among all types of cryptocurrency.
Another form of cryptocurrency is Litecoin. Whereas Bitcoin strives to become the global currency for the digital world, Litecoin targets itself as being more suitable for everyday transactions due to its decreased transaction time (2.5 minutes instead of 10).
The third type of cryptocurrency is called Ripple. The primary goal of this currency was to act as the bridge between financial institutions and other banks around the world by providing them with a faster, cheaper, and more reliable form of currency exchange.
A fourth option that you may come across is Dash, which was originally known as Darkcoin due to its infamous history involving illegal transactions on the site Silk Road. However, it has since rebranded itself to become an advanced version of Bitcoin. Today, it differs from its predecessor primarily in transaction speed (it takes about 2 minutes for transactions) and security (all transactions are recorded on every computer involved in the network).
One more type of cryptocurrency I would like to mention is Ethereum. This currency claims to have the world's largest programmable blockchain network out there. They have their own programming language called Solidity, which can be used to create decentralized applications that run smart contracts between two parties.
Finally, I would like to present you with a new kind of cryptocurrency originally developed in 2014 known as Dogecoin. This currency was created based on an Internet meme by Jackson Palmer and Billy Markus who wanted to create something fun for people all around the world to use. As of the time of writing this article, it is currently one of the top 10 most valuable currencies, so give it a try!
Well, that finishes up my list of types of cryptocurrency! Keep in mind that these are not "the end-all-be-all" of all types out there. There are hundreds if not thousands of other forms available, so check them out for yourself!
By the way, did you know that many companies like Microsoft, Dell, and Overstock accept cryptocurrency as payment? It's true!