Types of Cryptocurrency: What Beginners Should Know
You’ve heard about Bitcoin, but there are a lot of other coins going around. In fact, there are thousands of other types of cryptocurrency.
So, what’s the difference between all these different cryptocurrency types? Are they all valuable?
To learn the answers to these questions, you need to understand the main types of cryptocurrency. Hopefully, this guide can help you make sense of this cryptocurrency 101.
Read on!
Bitcoin
Bitcoin is arguably the most widely known type of cryptocurrency that beginners should be aware of. Bitcoin was the first digital currency that sparked the global shift to cryptocurrency.
Bitcoin is decentralized and digital, using a “blockchain” ledger system to track every transaction. A transaction is a digital exchange of money, data, or some property and goes through a cryptographic process of authentication and verification, making it secure.
Bitcoin’s success has opened the door to hundreds of other types of cryptocurrency, such as Ethereum, Dash, Litecoin, Ripple, Zcash, and Monero.
Each type of currency has different characteristics, like the speed of transaction and cost, but all of them are built on the concept of blockchain technology.
so you can decide which one is fit for you.
Ethereum
Ethereum is a type of cryptocurrency investors should be aware of. It was developed in 2015 as an alternative to Bitcoin, the world’s first digital currency.
Ethereum differs from other cryptocurrencies in that users can encode smart contracts into the blockchain that can be used for various financial applications without intermediaries.
It is considered a top choice for developers because of its low transaction costs, high security, and fast transactions. In addition, Ethereum can be quickly mined using traditional computer components, making it a sound investment for beginners.
Litecoin
Litecoin is one of the world’s most popular digital currencies and is an ideal option for beginners. It’s an open-source, decentralized payment network that allows users to store, send, receive and trade coins.
Litecoin was created in 2011 as an efficient and secure alternative to bitcoin, making it easier to send and receive payments on the blockchain.
Its popularity skyrocketed over the years, making it the fifth-largest cryptocurrency by market cap. Litecoin is user-friendly and useful for beginners, offering low transfer fees and quick, secure transactions.
Transactions can be approved within minutes instead of waiting days, and Litecoin offers a reliable and efficient alternative to traditional banking processes. It also has a larger supply of coins than bitcoin, making it a more attractive and accessible currency.
Ripple
Ripple is a cryptocurrency built on the principles of secure, instant, and free money transfers. It is the largest asset in the world by its market capitalization. It was founded in 2012 to enable secure, instant, and nearly free global financial transactions of any size with no chargebacks.
Banks and financial institutions currently use it for cross-border payments. Ripple is built on its own distributed consensus ledger, called the Ripple Protocol.
Ripple also does not have transaction fees like Bitcoin, Ethereum, or other cryptos. Instead, it charges a fixed fee for each transaction.
Read More About the Different Types of Cryptocurrency
The many types of cryptocurrency are incredibly fast-growing areas of technology. Understanding the basics is the first step towards selecting the right type of cryptocurrency for one’s own needs.
Investing in cryptocurrency can be a great way to add diversity to one’s portfolio, so consider one for you today!
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