This is probably not the first time you come across the word ‘cryptocurrency’. However, in case you are hearing it for the first time, you will get a brief meaning of what cryptocurrency is and then get to know the most popular types of cryptocurrency.
What is Cryptocurrency?
If you are keen enough, you may be able to derive the meaning of the word cryptocurrency from the word itself. The prefix crypto- is from “cryptography”, a technology that’s efficient in securing information, by hiding it from attackers.
Cryptocurrency can briefly be described as electronic money that depends on technology for its creation, control of its transactions and protecting its transactions. With this in mind, let’s now look at the different types.
Types of Cryptocurrency
Though the types are endless, let’s look at the major ones.
Created in 2009, bitcoin is one of the well-known cryptocurrencies. Bitcoin is considered an original cryptocurrency as compared to the rest.
The Bitcoin works through the blockchain technology. It allows users to make safe transactions as they view and monitor them. However, the algorithm within the blockchain secures these transactions. The Bitcoin owner is the only person capable of decrypting it since he or she is given a “private key”. Bitcoin allows anonymous transactions to take place in every corner of the world because its users take charge of sending and receiving of money.
Ethereum was created in 2015. It also works through the blockchain technology. It is an open-source platform and thus individuals and the application developers on the Ethereum network use it to pay for transaction fees and services.
Litecoin was launched in 2011. It was meant to be an alternative to the already existing bitcoin. It’s also an open-source, globally used payment network with no central authorities than control it. The Litecoin features faster transaction time than the Bitcoin. Another difference between Bitcoin and Litecoin is that Bitcoin has its coin limit at 21 million, whereas that of Litecoin is 84 million.
Ripple ( XRP)
Ripple came into the market in 2012. It acts both as a cryptocurrency and a digital network, allowing financial transactions. Ripple gives room for exchange of any type of currency, from gold and USD to Bitcoin and EUR. Though other cryptocurrency is mostly used for peer to peer transactions, ripple is used for moving large amounts of money.
Bitcoin cash was created to improve various features of Bitcoin. It allowed lots of transactions to be processed faster, by increasing the size of blocks.
Stellar Lumen (XLM)
Stellar lumen facilitates currency exchange and thus, it is used as an intermediary currency. When using Stellar Lumen, one can send any type of currency they own to another person in a different currency.
Though the different cryptocurrency types are inexhaustible, these are the major ones. If you would like to trade in cryptocurrency, try one of these and you may pocket a significant amount of profit.