From Bitcoin and Ethereum to Dogecoin and Tether, there are thousands of different cryptocurrencies, which can make it overwhelming when you’re first getting started in the world of crypto.
There are more than 8,000 cryptocurrencies in existence as of December 2021.
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| Bitcoin |
Not all of them are equally desirable of course, just as not all of the real world’s currencies are on the same footing.
Investors looking to enter the cryptoverse have a number of questions to address — whether to buy a lot of one currency, divide their money between two different cryptocurrencies, or participate in the movement of multiple currencies.
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There is no one size fits all formula and deciding which cryptocurrencies to invest in varies depending on the risk appetite of one person versus another.
Specific cryptocurrencies are more suited to specific needs, such as for investors, application developers, day traders, and so on.
Having a deeper understanding of currencies, would give you a better chance of making an informed decision.
What Are Cryptocurrency?
A cryptocurrency, broadly defined, is virtual or digital money that takes the form of tokens or “coins.”
While some cryptocurrencies have ventured into the physical world with credit cards or other projects, the large majority remain entirely intangible.
The “crypto” in cryptocurrencies refers to complicated cryptography that allows for the creation and processing of digital currencies and their transactions across decentralized systems.
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| What is cryptocurrency |
Alongside this important “crypto” feature of these currencies is a common commitment to decentralization; cryptocurrencies are typically developed as code by teams who build in mechanisms through a process called mining and other controls.
Cryptocurrencies are almost always designed to be free from government manipulation and control—although, as they have grown more popular, this foundational aspect of the industry has come under fire.
The cryptocurrencies modeled after Bitcoin are collectively called altcoins, and in some cases shitcoins.
Do your own research (DYOR) Before Investing
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| Do your own research |
Age and enthusiast trust – The community that rises around a cryptocurrency and the trust it reposes in it makes all the difference between a currency that reaches the top of the charts, or one that sinks with no trace.
Blockchain generation – Cryptocurrencies can be categorised into coins or tokens, and newer generations unlock more possibilities by the underlying blockchain.
Speciality – Over a time period, each currency settles into a different niche.
Supply conditions – Supply being limited or unlimited can shape basic aspects of how a currency is used, and the impact it has on the wider economy.
Value and divisibility – Transaction pricing benefits from the flexibility of a hundred rupee currency that can be divided into 100 notes of one rupee each, and further subdivided into a hundred coins of one paisa each. Similarly, a cryptocurrency whole that can be divided into a million/billion sub-units, allows for flexibility in transactions.
Transaction costs – There is always a cost to handling a transaction, the only question is whether that means losing 4% or just 0.00025% in the process.
Transaction speed – This would be analogous to waiting in a check-out queue, you’d prefer the cashier confirming your purchase or sale as soon as possible.
Perceived transaction privacy – Within the crypto community, currencies can be perceived to allow for differing levels of privacy, even if law enforcement authorities have their methods to trace almost every transaction.
Notably, intangible and external factors do influence how a currency performs in the long run, and how it performs compared to other currencies. Many of the factors noted above can also have an impact on the currency we use daily.
Types Of Crypto
Cryptocurrencies are intended to be used for payments, transmitting value across a decentralized network of users.
Many altcoins (i.e., not bitcoin or sometimes ether) are classified in this way and may sometimes be called value tokens.
There are also blockchain-based tokens that are meant to serve a different purpose from that of money.
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| Types of cryptocurrency |
One example could be a token issued as part of an initial coin offering (ICO) that represents a stake in a blockchain or decentralized finance (DeFi)project.
If the tokens are linked to the value of the company or project, they can be called security tokens (as in securities like stocks, not safety).
Other tokens have a particular use case or function.
Examples include Storj tokens, which allow people to share files across a decentralized network, or Namecoin, which provides decentralized Domain Name System (DNS) service for Internet addresses.
These are known as utility tokens.
List Of Top Cryptocurrency
1. Bitcoin (BTC)
Market cap: Over $1.08 trillion
Created in 2009 by someone under the pseudonym Satoshi Nakamoto, Bitcoin (BTC) is the original cryptocurrency.
As with most cryptocurrencies, BTC runs on a blockchain, or a ledger logging transactions distributed across a network of thousands of computers.
Because additions to the distributed ledgers must be verified by solving a cryptographic puzzle, a process called proof of work, Bitcoin is kept secure and safe from fraudsters.
Bitcoin’s price has skyrocketed as it’s become a household name.
Five years ago, you could buy a Bitcoin for about $500.
As of Nov. 30, 2021, a single Bitcoin’s price was over $57,000.
That’s growth of about 11,400%.
2. Ethereum (ETH)
Market cap: Over $557 billion
Both a cryptocurrency and a blockchain platform, Ethereum is a favorite of program developers because of its potential applications, like so-called smart contracts that automatically execute when conditions are met and non-fungible tokens (NFTs).
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| Ethereum |
Ethereum has also experienced tremendous growth.
In just over five years, its price went from about $11 to over $4,700, increasing over 42,000%.
3. Binance Coin (BNB)
Market cap: Over $104 billion
The Binance Coin is a form of cryptocurrency that you can use to trade and pay fees on Binance, one of the largest crypto exchanges in the world.
Since its launch in 2017, Binance Coin has expanded past merely facilitating trades on Binance’s exchange platform.
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| Binance coin |
Now, it can be used for trading, payment processing or even booking travel arrangements.
It can also be traded or exchanged for other forms of cryptocurrency, such as Ethereum or Bitcoin.
Its price in 2017 was just $0.10; by Nov. 30, 2021, it had risen to over $628, a gain of approximately 627,000%.
4. Tether (USDT)
Market cap: Over $73 billion
Unlike some other forms of cryptocurrency, Tether is a stablecoin, meaning it’s backed by fiat currencies like U.S. dollars and the Euro and hypothetically keeps a value equal to one of those denominations.
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| Tether |
In theory, this means Tether’s value is supposed to be more consistent than other cryptocurrencies, and it’s favored by investors who are wary of the extreme volatility of other coins.
5. Solana (SOL)
Market cap: Over $64 billion
Developed to help power decentralized finance (DeFi) uses, decentralized apps (DApps) and smart contracts, Solana runs on a unique hybrid proof-of-stake and proof-of-history mechanisms that help it process transactions quickly and securely.
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| Solana |
SOL, Solana’s native token, powers the platform.
When it launched in 2020, SOL’s price started at $0.77.
By Nov. 30, 2021, its price was almost $213.42, a gain of more than 26,500%.
6. Cardano (ADA)
Market cap: Over $52 billion
Somewhat later to the crypto scene, Cardano is notable for its early embrace of proof-of-stake validation.
This method expedites transaction time and decreases energy usage and environmental impact by removing the competitive, problem-solving aspect of transaction verification present in platforms like Bitcoin.
Cardano also works like Ethereum to enable smart contracts and decentralized applications, which are powered by ADA, its native coin.
Cardano’s ADA token has had relatively modest growth compared to other major crypto coins. In 2017, ADA’s price was $0.02.
As of Nov. 30, 2021, its price was at $1.57. This is an increase of 7,850%.
7. XRP (XRP)
Market cap: Over $47 billion
Created by some of the same founders as Ripple, a digital technology and payment processing company, XRP can be used on that network to facilitate exchanges of different currency types, including fiat currencies and other major cryptocurrencies.
At the beginning of 2017, the price of XRP was $0.006. As of Nov. 30, 2021, its price reached $1.00, equal to a rise of 16,666%.
8. U.S. Dollar Coin (USDC)
Market cap: Over $38 billion
Like Tether, USD Coin (USDC) is a stablecoin, meaning it’s backed by U.S. dollars and aims for a 1 USD to 1 USDC ratio.
USDC is powered by Ethereum, and you can use USD Coin to complete global transactions.
9. Polkadot (DOT)
Market cap: Over $37 billion
Cryptocurrencies may use any number of blockchains; Polkadot aims to integrate them by creating a cryptocurrency network that connects the various blockchains so they can work together.
This integration may change how cryptocurrencies are managed and has spurred impressive growth since Polkadot’s launch in 2020.
Between September 2020 and Nov. 30, 2021, its price grew about 1,300%, from $2.93 to $38.61.
10. Dogecoin (DOGE)
Market cap: Over $28 billion
Dogecoin has been a hot topic thanks to celebrities and billionaires like Elon Musk.
Famously started as a joke in 2013, Dogecoin rapidly became a prominent cryptocurrency option, thanks to a dedicated community and creative memes.
Unlike many other cryptos, such as Bitcoin, there is no limit on the number of Dogecoins that can be created, which leaves the currency susceptible to devaluation as supply increases.
Dogecoin’s price in 2017 was $0.0002.
By Nov. 30, 2021, its price was at $0.22—an almost 110,000% increase.
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