What are the main types of cryptocurrencies?

by Alvin Ramon

Bitcoin is the “number 1 cryptocurrency” in terms of popularity and capitalization, but more than 3,500 cryptocurrencies exist today. The site coinmarketcap.com draws up a complete list of them, which it would be impossible for us to detail in this article. On the other hand, we can classify them according to different criteria since all cryptocurrencies do not necessarily have the same objective.

So-called “infrastructure” crypto-currencies

The purpose of these cryptos extends well beyond the means of payment: their purpose is to become alternatives to the financial system in place. They are not accessible to the general public and are intended more for professional use. We can cite in this category Ethereum and Cardano, which allow the creation of smart contracts aimed at programming the execution of an action according to the fulfilment of previously defined conditions. Tether, a stablecoin whose value, backed by the dollar, always remains close to $1, is also part of it since it allows you to partially protect yourself from the volatility of other crypto-currencies. We should also mention Ardor, which gives companies the possibility of creating their own blockchain, but also Ripple and Stellar, which allow a large number of banking operations to be carried out as quickly as possible.

Crypto-currencies as a means of payment

These currencies aim to offer a real alternative to fiat currencies. They allow you to make certain purchases, depending on the currency and the service. In this category, let’s mention Bitcoin, with which one can buy goods or be paid (in Japan, for example, which has recognized it as currency since April 2017). There are also Litecoin, Dash and Digibyte which offer international payment solutions.

“Anonymous” cryptocurrencies

Transactions made in these currencies are anonymous, that is to say that the identity of the parties and sometimes even the amount of the transactions are completely hidden. Examples include Monero and ZCash, whose transactions are untraceable thanks to different encryption techniques.

“Social” cryptocurrencies

They were designed to exchange small amounts through social networks, for example, to “remunerate” the author of online content (photo, blog article) by sending him a tip. Dogecoin and BAT offer this possibility.

Cryptocurrency facing difficulties

Despite growing enthusiasm, crypto-currencies face many difficulties and are the target of more or less legitimate criticism and accusations.

How to get and store cryptos

If you are aiming to purchase some cryptos you simply need to open an investing account with the brokerage that offers this type of asset. Aim for the services that encompass technical analysis features that will be useful to you in analyzing the markets and avoid bull trap. Of course, first you need to acquire decent knowledge regarding tech analysis. Forthat go for the brokerage that allows free training and free educational materials.

The value in Bitcoin that you have is materialized by a private key that takes a kind of password composed of many numbers and letters. This key is unique, which means that no one will be able to use your assets, but also that in the event of a loss, they cannot be recovered. Therefore, it must remain absolutely confidential. Each private key is attached to a public key that can be shared with other people to receive crypto-currencies.

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