By Sonali Pandey on The Capital
Woah, Woah, Woah! I know it’s pretty interesting to read about all the cryptocurrency and the web 3.0 going to take over. But you need to calm down and take a chill! There is no doubt that ever since bitcoin came into existence, it has laid the foundation of cryptocurrency mining which is revolutionizing almost every domain, be it, the food joints, the computer software industries, or even the fintech industries.
I am sure that all the readers might not be aware of what the term cryptocurrency means and how things go about it. So, we will begin with an introduction to the term “cryptocurrency” and then dive deeper into its types. So, what are you waiting for? Let’s get started!!
The term “cryptocurrency” came into existence in the year 2008. It marked its footprints with the release of BITCOIN in the form of a white paper written by an anonymous person or group of persons named Satoshi Nakamoto. Since then, the term “cryptocurrency” has been a matter of attraction and immense hype. The term “cryptocurrency” is made up of two words — crypto and currency. I am sure that anybody can just use Google and then check out what these two terms mean.
Then why this hype? What makes it so special?
Well, the answer to all these questions lies in its nature, types, and the manner it has succeeded in conquering the hearts and minds of not only the blockchain enthusiasts but also the general public.
The term crypto refers to the cryptographic hash shared by the computers, which contribute to the decentralized network of the blockchain structure whereas the term currency means money. In simple words, all the money, or rather what you call the “digital money” is produced(mined) by using a function that produces a “string” verifying the transaction. This “string” is called the hash and the function producing it is called the hashing function. To conclude, cryptocurrency is a type of digital asset which is produced by the technique of cryptography.
I hope, now, everyone is at least familiar with what the basic meaning of the term “cryptocurrency” is. Now, let’s move towards the second section of the article which talks about the types of cryptocurrencies.
The cryptocurrencies are divided into three major categories- the bitcoins, altcoins, and the tokens. Presently, there are more than 3000 varieties of cryptocurrencies, but in this article, we will talk about the most common ones.
Bitcoin Cash (BCH):
· The most popular cryptocurrency of all times.
· It is one of the most successful “hard fork” of bitcoin.
· BCH was created to remove the original issues of scalability associated with the bitcoin.
· BCH also increased the size limit of a block from 1 MB to 8 MB.
· Came into existence in the year 2015.
·The second most popular type of cryptocurrency.
· Supports Dapps(decentralized applications).
· Ether is the token that provides support to its decentralized platform.
· Ethereum is used for building smart contracts that make it unique from the rest of the cryptocurrencies.
· Came into existence in the year 2012.
· It possesses a unique consensus ledger and eliminates the need for any sort of mining at all.
· XPR is the Ripple token that is mined only once before it is launched and does not permit its mining at any intermediate stage.
· The most important feature of Ripple lies in its settlement network which is not only global but quick, instant, and affordable for international payments.
· Came into existence in the year 2012.
· Developed by Charlie Lee who is a former MIT graduate.
· Like Ripple XPR, eve Litecoin is a global payment network.
· It has a unique reference to itself and is often termed as the “silver to bitcoin’s gold”.
· It uses “scrypt” as the algorithm.
· Came into existence in the year 2014.
· One of the stablecoins (coins that are used for smoothening the price fluctuations).
· Just like its other friends, namely, LiteCoin and Ripple, even Tether is designed as a platform.
· It uses a decentralized blockchain network for the transaction of digital assets.
There is so much more to the world of cryptocurrencies and its types. Needless to say, this is not even 0.25 % of the total cryptocurrencies that exist today. However, it would not have been possible to cover everything in one article, still, I tried my best, not to disappoint my readers and give them as much information as possible.
I hope you had a nice time reading this article. Stay happy and keep reading. Hope to you soon 🙂