Long Live this new hero crypto world!You've probably heard or haven't heard of Ethereum, but you certainly know something about Bitcoin.But what if I tell you that there are many other types of cryptocurrencies? Starting with 3 network tokens, ICO tokens, ER 20 tokens, Divi tokens and ending with solid coins, you will be surprised at what this powerful crypto space has to offer.
Due to the bullish altcoin season, bitcoin prices continue to rise, especially when Elon Musk changes his Twitter bio to bitcoin.The crypto market is like a giant, and the industry will continue to flourish, turning into something much larger.
Therefore, if you are interested in learning about the next step after bitcoin, read on when we analyze various types of cryptocurrencies.You can also find some ideas to diversify your investment portfolio.
Due to the bullish altcoin season, bitcoin prices continue to rise, especially when Elon Musk changes his Twitter bio to bitcoin.The crypto market is like a giant, and the industry will continue to flourish, turning into something much larger.
Therefore, if you are interested in learning about the next step after bitcoin, read on when we analyze various types of cryptocurrencies.You can also find some ideas to diversify your investment portfolio.
What is Cryptocurrency?
Just like the Fiat type of currency (common dollar bill), cryptocurrency is decentralized, relying solely on the peer-to-peer social network of computers consisting of user machines or "nodes"."This means that it is independent and not managed by the central bank or financial authorities. Also known as virtual currency or digital currency, cryptocurrency is often recognized as an intermediate exchange for transaction purposes.
Unlike the US dollar, cryptocurrency ownership is usually registered on a blockchain that uses some key features. In the case of bitcoin, the registry is distributed to each node in the network, encrypted transactions, server timestamp, confirmation of agreement with the network running the nodes itself.
Is it sound too hard?
Introducing this expands the possibility of cryptocurrency far beyond the usual currency, as you will see in the case of crypto tokens. But most importantly, being the first currency built separately, bitcoin started a trend of decentralization significantly, while traditional governments and banks no longer have to speak in your privacy.
Differences between coins and tokens
There are three types of cryptocurrencies. This includes Bitcoin, altcoins and tokens.
Bitcoin
In 2008, an anonymous developer known as Satoshi Nakamoto published a white paper describing the first Money Money independent government or bank-bitcoin (BTC). Unlike traditional online payments, it promises low transaction fees and is quite decentralized.
There are no physical bitcoins, but only balances are stored in a public registration system known as blockchain. These bitcoin token balances are subsequently maintained using public and private decryption encryption keys. Simply put, a public key is like your bank account number, with which you can send or receive bitcoins. For comparison, a private key is a secret key to authorize bitcoin transfers.
Like cryptocurrency, bitcoin is accepted as a means of payment for goods sold or services provided, which operate in the same way as the fiat currency. Despite the fact that it is decentralized, the most attractive part of bitcoin is competitive exchange rate against the dollar, which attracts investors and traders. Despite the fact that bitcoin is not legally offered, it is still a popular form of cryptocurrency and has inspired many content creators to launch their cryptocurrencies, which are collectively called altcoins.
Composition
Initially, bitcoin was just a cryptocurrency, but later other projects began to appear. Thus, alternative funds were born. Have you ever heard of Ethereum, Litecoin, Ripple, Bitcoin Cash or Monero? All and many others were born on their native platforms, the native blockchain, and they were all slightly different from the Bitcoin Blockchain.
These newly created coins, such as Phantom, were created specifically for single-purpose use, to serve as a digital currency that could be in some ways superior to bitcoin-at least according to the developers of such projects.
Simply put, they were created to compete with bitcoin by changing the rules to attract different users. And although some of them are challenging bitcoin after all these years, ironically, the 10-year-old grandfather still largely dominates the market. At the same time, all other types of cryptocurrencies are now manufactured as altcoins or altcoins.
Tokens
Currently, crypto shows are being created to start a crypto-related ecosystem. You know, it works almost like bonus miles. You can't buy a loaf of bread for miles, but you can buy a plane ticket, and the more miles you have, the better for the airline. One way to work with crypto tokens!
Don't worry, you'll find some useful examples later in the article. In the meantime, understand that crypto tokens are not the only ones that have their own blockchains and can easily be created on other platforms. Compared to cryptocurrencies that function as money, tokens often function as voting for exchanges or rewarding people for participating in the network.
The Types of Crypto Tokens
Depending on the function of cryptographic symbols, they can be divided into different types:
ERC-20 Tokens
A significant difference between ERC20 tokens and all other types of tokens is that ERC20 tokens are created on top of the Ethereum blockchain.
The truth is that ERC20 is not even a token, but rather a standard token. Suppose a company decides to launch a dApp, a decentralized application, on the Ethereum platform. For their token to work, they have to produce it according to the ERC20 standard which defines a set of rules.
Therefore, all of the tokens below can be considered ERC20 as long as they are launched on the Ethereum platform. We will explore different categories of tokens below, and some tokens may even fall into more than one category.
Exchange Tokens
One way for a cryptocurrency trading platform to differentiate itself from its competitors is the variety of currency pairs and types of trading, such as OTC, margin trading or futures trading, and indeed native exchange tokens.
These tokens add value because users can use them to pay fees, buy and sell other cryptocurrencies, or power certain operations, such as community voting for new coin listings.
Probably the best known and most liquid exchange token is the BNB token for the Binance exchange. However, of course, there are other exchange tokens as well, such as Huobi Token (HT), KuCoin Shares (KCS), Bibox Token (BIX), etc.
DeFi Tokens
DeFi tokens have been quite a hit during the summer of 2020, known as the DeFi summer. DeFi stands for decentralized finance and refers to decentralized applications involving finance, such as trading, lending and borrowing, derivatives, synthetics, insurance, and more.
DeFi TVL increased from $1 billion in 2020 to over $100 billion in 2022 during the Bitcoin bull market. So does this mean it's a potential channel to disrupt the cryptocurrency niche? If so, how?
Believe it or not, the cryptocurrency niche is still centralized. Take Binance as an example; he still belongs to a group of people that contradicts Satoshi's vision.
What he terms DeFi is his goal to move away from traditional crypto platforms. DeFi projects aim to allow users to borrow and lend within a peer-to-peer network, leverage lending, and “farm” tokens by simply being active.
Those tokens or "cultivated" tokens produced on such platforms are DeFi tokens including, but not limited to, Chainlink (LINK), Uniswap (UNI), Aave (AAVE), Dai (DAI), and others.
Governance Tokens
Governance tokens are used for the purpose of making decisions that will dictate or govern the future of a protocol. Token holders have the right to vote, and therefore a say in decisions regarding new feature proposals and changes to the project's governance system.
There are more and more decentralized protocols with on-chain governance that allows governance token holders to influence a decision through the voting systems in place. As Dapps are on the rise, governance plays a vital role in creating a synergy where stakeholders and developers can together shape the future of a protocol through the most transparent discussion and debate.
For example, the AAVE token gives its community holders the ability to vote on key changes to the AAVE protocol. This means that if you own AAVE, you have a say in favoring or voting against proposed changes or an upcoming proposal.
Real World Asset Tokens
Also known as a security token, this type of token could be the next big thing in crypto once regulators around the world decide how to regulate it. Real-world asset tokens are responsible for real-world assets that pass through “tokenization” — the process that helps convert real-world assets, such as real estate, into digital tokens.
Suppose, as an investment, you want to buy a fraction of an apartment in New York, but not a whole apartment because it is very expensive. You can do this by buying digital assets that can be divided easily.
Security tokens have been a buzzword for a while now, but it takes a lot of proper regulation and standardization to use them. Consequently, we haven't heard a lot about them.
For example, the PAXG token, or Pax Gold, is an asset-backed token where the token represents one troy ounce of London Good Delivery gold bars, stored in professional vaults. Whoever owns PAXG has title rights to this gold in the custody of the Paxos Trust Company, making it a true asset token.
Suppose, as an investment, you want to buy a fraction of an apartment in New York, but not a whole apartment because it is very expensive. You can do this by buying digital assets that can be divided easily.
Security tokens have been a buzzword for a while now, but it takes a lot of proper regulation and standardization to use them. Consequently, we haven't heard a lot about them.
For example, the PAXG token, or Pax Gold, is an asset-backed token where the token represents one troy ounce of London Good Delivery gold bars, stored in professional vaults. Whoever owns PAXG has title rights to this gold in the custody of the Paxos Trust Company, making it a true asset token.
ICO Tokens
About three years ago, an Initial Coin Offering (ICO) came up and took off. Cryptocurrency projects, sometimes of dubious origin, have sought to raise funds, which is why they often create a new currency as a way to raise funds. In simpler terms, an initial coin offering is a source of capital for startups.
Any interested investor can participate in the offer and receive a new crypto token issued by the company in return. Through this fundraising campaign, companies will raise enough funds to continue the development process. While these tokens are usually exchanged for BTC and ETH. This is mainly because it is easier to trade against other currencies and the market liquidity is generally higher.
Today, ICO has become useless with the development of the market.
Did you know that there are over 700,000 miles of submarine cable in service today? Google has 63,605 miles and 8.5% of all cable to its name; Facebook - 57,079; Amazon - 18,987; Microsoft - 4014. These large corporations control much of the undersea cables that are critical Internet infrastructure.
Web3 codes are codes developed on top of these crypto platforms that aim to stop this trend. And they reward users of their platforms with Web3 encrypted tokens for contributing to the development of the other direction.
For example, with the decentralized Filecoin project, users of the network store other users' data in exchange for being rewarded in Filecoin tokens. Similarly, Arweave provides an inexpensive sequential storage solution that allows users to archive information on websites forever.
The ThreeFold token is awarded to participants who authorize their nodes in the ThreeFold ecosystem, which stands for Internet Without Global Enterprises.
For example, Binance Coin (BNB) is a useful token that has its own payment method for trading fees on the exchange. When you use this utility code, you can get discounts when paying trading fees, and use them for travel expenses, gift cards, and more. Ultimately, the utility coin powers the development and ecosystem of the platform.
Note that the tool tokens are generally more diverse. This means that they are flexible to be combined for many purposes and can work like other types of icons as well. Utility tokens' dual status as governance tokens serves as a common illustration.
Any interested investor can participate in the offer and receive a new crypto token issued by the company in return. Through this fundraising campaign, companies will raise enough funds to continue the development process. While these tokens are usually exchanged for BTC and ETH. This is mainly because it is easier to trade against other currencies and the market liquidity is generally higher.
Today, ICO has become useless with the development of the market.
Web3 Tokens
Web3 Tokens aims to decentralize the existing infrastructure of the Internet so that it is owned by the people rather than relying on existing centralized Web2 giants. Web3 Codes aims to provide a fairer Internet standard for all.Did you know that there are over 700,000 miles of submarine cable in service today? Google has 63,605 miles and 8.5% of all cable to its name; Facebook - 57,079; Amazon - 18,987; Microsoft - 4014. These large corporations control much of the undersea cables that are critical Internet infrastructure.
Web3 codes are codes developed on top of these crypto platforms that aim to stop this trend. And they reward users of their platforms with Web3 encrypted tokens for contributing to the development of the other direction.
For example, with the decentralized Filecoin project, users of the network store other users' data in exchange for being rewarded in Filecoin tokens. Similarly, Arweave provides an inexpensive sequential storage solution that allows users to archive information on websites forever.
The ThreeFold token is awarded to participants who authorize their nodes in the ThreeFold ecosystem, which stands for Internet Without Global Enterprises.
Utility codes
Utility tokens refer to an asset embedded in the blockchain that allows users to purchase a good or service in the future. Unlike security tokens, utility tokens are not a direct investment but support the platform economy through the service provided.For example, Binance Coin (BNB) is a useful token that has its own payment method for trading fees on the exchange. When you use this utility code, you can get discounts when paying trading fees, and use them for travel expenses, gift cards, and more. Ultimately, the utility coin powers the development and ecosystem of the platform.
Note that the tool tokens are generally more diverse. This means that they are flexible to be combined for many purposes and can work like other types of icons as well. Utility tokens' dual status as governance tokens serves as a common illustration.
Non-fungible tokens
Non-fungible tokens (NFTs) are a digital certificate of ownership of a unique asset on the blockchain. They are typically used to represent a work of art, but can also be used to represent a wide variety of assets, from photos, videos, audios, collectibles, real estate, virtual worlds, memes, GIFs, and digital content such as messages and tweets, fashion, music, painting, drawing, academia, political articles, or movies Or memes, sports, games or any valuable digital file on the blockchain.On the blockchain of Ethereum, the first NFT was produced in 2015. The digital signature is created in such a way that it cannot be replaced by another. They allow the owner to own an original item for a limited offer, original or edition. Due to their perceived high value, releases may be limited edition or non-repeatable.
The best NFTs are those where only one or a few people can own an original. Essentially, it helps artists, creators, and collectors sell their items. It can be bought and sold on NFT marketplaces such as OpenSea, Rarible, Foundation, and Decentraland. The app includes popularity, merchandise monetization, royalties payments so artists get a percentage of sales each time art is sold to a new user, part ownership of expensive land and assets, auction to raise capital and money like Charmin and Taco Bell auction For thematic NFTs, creating a unique memory or preserving stories, for market-related reasons such as merchandising and celebrity viewing. We can differentiate them from Initial Exchange Offering Tokens, which are regular initial coins offering tokens through a cryptocurrency exchange promotion.
NFT examples include the Bored Ape Yacht Club (BAYC), Blockchain Gaming Assets, Metaverse Land, Twitter Founder Jack Dorsey's First Tweets, NFT, Beeple's The First 5000 Days, and Crypto Kitties.
stablecoins
Stablecoins, as the name suggests, are tokens that have a fixed value almost all of the time. The most common stablecoins are pegged to the dollar, such as USDC and BUSD, and are often backed by stable or somewhat stable assets such as fiat currency or short-term US Treasury notes.There are also other less popular stablecoins such as the euro stablecoin, coins backed by gold and other precious metals, oil and commodity tokens.
Stable tokens help the world get rid of volatility in other assets or even digital currencies. They are backed by a specified ratio and the assets supporting them must be kept in reserves as per the specified ratio.
We have those supported by digital currencies, cryptocurrencies, and commodities, but there are also stable algorithmic currencies that use software and rules to maintain the stability of the peg with fiat currencies or other assets, but most of them have failed so far.
Examples of stablecoins:
Backed by assets: Tether, TUSD, Gemi Dollar, USDC, BUSD, and Paxos.
Commodity-backed: Tether Gold (XAUT) and DigixGlobal (DGX) also serve as gold-backed stablecoins.
Algorithm: Stable: Ampleforth (AMPL), USD Terra (UST), Empty Dollar Set (ESD), Frax (FRAX).
privacy codes
As the name suggests, privacy coins are cryptocurrencies used for privacy applications because their code encourages better privacy than bitcoin and traditional cryptocurrencies.There are many reasons why it is necessary to have better privacy in cryptocurrency transactions - first as a right to privacy, security investigations and highly sensitive transactions, although it is also used for crimes and scams.
These cryptocurrencies incorporate various methods to ensure the confidentiality of transactions, for example coin mixing, anonymizing technologies such as CoinJoin, and offline transactions. This is in addition to the techniques used in traditional cryptography, for example lacking the linking of real-world names to cryptographic addresses and blockchain encryption.
There are even smart contract privacy networks that are similar to using Ethereum, but everything is privacy enabled by default, like the Secret Network.
Examples of privacy tokens: Secret Network, Monero, Zcash, Dash, and Horizon.
Top rated cryptocurrency
So what are the best cryptocurrencies worth your time and v31- Bitcoin (BTC)
- Record high: $69,044.77
- Circulating supply: 19,097,243 bitcoins
- Maximum bid: 21,000,000 BTC
The past year has been a rollercoaster ride in the cryptocurrency market. Bitcoin prices jumped more than 200%, reaching an all-time high of $69,000 in May 2021, but have since fallen 60% due to economic inflation and tightening measures. Today, Bitcoin is trading on average between $19,000 and $22,000.
2. Ethereum (ETH)
- All-time high: $4,878.26
- Circulating supply: 119,734,592 ETH
- Max width: no max
Globally, the annual carbon footprint of Bitcoin is equivalent to that of New Zealand, 36.95 million tons of carbon dioxide. This is all because the Proof-of-Work consensus forces Ethereum to deal with scalability issues.
Once the merger is successful, ETH will be able to host more DeFi projects and it will be hard to imagine anyone who can challenge Ethereum founder Vitalik Buterin on his path to market dominance.
3. Tether (USDT)
- All-time high: $1.32
- Circulating supply: 65,876,317,670 USDT
- Max width: no max
According to Tether, all of their tokens are 100% backed by their reserves, including traditional fiat currencies, cash along with other assets, and claims from loans made by Tether to third parties.
4. USD coin (USDC)
- All-time high: $1.17
- Circulating supply: 54,800,861,821 USD
- Max width: no max
The stablecoin has become one of the top crypto assets in terms of the amount deposited on various DeFi platforms. At the time of writing, the circulating supply of USDC has surpassed 54 billion after growing over 500% in 2021.
5. Binance Coin (BNB)
- All-time high: $690.93
- Circulating supply: 163,276,974 billion Bahraini dinars
- Maximum bid: 165,116,760 BNB
Despite the recent crash in the cryptocurrency markets, its performance has been impressive. Today, BNB leads the 6th largest token – BUSD, which also happens to be the stablecoin in the BNB chain, with a whopping $24 billion market cap.