Crypto

What are the categories of cryptocurrencies.

Since the creation of Bitcoin in 2008, thousands of cryptocurrencies have emerged. To date, more than 20,000 cryptocurrencies are available on the network. Even though they are all encrypted virtual currencies, they do not all fall into the same category. Because they don’t work in the same way. In this article, you will get to know the different categories of cryptocurrencies that exist.

What is a cryptocurrency?

Cryptocurrency, also called cybercurrency, is an encrypted virtual currency. Unlike fiat money, the issuance of cybercurrencies is peer-to-peer and therefore does not require any trusted third party or central regulatory authority. They work thanks to a cryptographic technology called blockchain. This technology allows you to associate users with the process of issuing and calculating transactions.

Indeed, in order to obtain units of cryptocurrency, it will be necessary to mine the blocks that make up the blockchain of the currency. According to blockchain programming, the system returns a certain number of units to the miner.

Today, you can easily buy any cryptocurrency of your choice with just a few clicks through brokerage platforms. For a safe and fast purchase, you can choose the official website of bitcoin 360 ai.

Cryptocurrencies vary from family to family. You will find in particular:

bitcoin

Bitcoin is the first of all cryptocurrencies. It is considered the original cryptocurrency and therefore belongs to one category: Bitcoin. The Bitcoin project, started in 2008, entered its practical phase in January 2009 when the “genesis block” was placed on the network. Since then, many other currencies have appeared, which are mainly inspired by the functioning of Bitcoin.

Bitcoin is the most valuable cryptocurrency with a market capitalization of over 2 trillion euros. It also holds the record for the currency with the highest conversion value. As of August 10, 2022, 1 BTC was worth $22,875. In November 2021, Bitcoin reached its biggest uptrend when it broke the $67,000 per unit mark.

Alcoins

Alcoins refer to all other encrypted digital currencies except bitcoins. These are alternative encrypted virtual currencies that allow Internet users to perform peer-to-peer transactions. Most of the currencies that make up Alcoins are based on blockchain-like technology. The best known and perhaps the most widely used Alcoin is Ether, the Ethereum cryptocurrency. It is often considered a direct competitor to Bitcoin. Because it is the second cryptocurrency to break the €200 billion market cap threshold.

There are many other well-known cryptocurrencies in the alcoin family. You will find, for example:

  • litecoin;
  • Cardano;
  • Throne;
  • Bitcoin Cash;
  • Binance coin.

In general, alcoins are volatile. This is what distinguishes them from stablecoins.

stablecoins

Even though the currencies belonging to this category are also cryptographic, they are not like Bitcoin. The big difference between stablecoins and other cryptocurrencies lies in their stability. Indeed, these virtual currencies are backed by fiat currency to avoid volatility. Thus, if you invest in these cryptocurrencies, you are free from the risks associated with volatility.

Stablecoins are ideal for peer-to-peer transactions. However, they are less profitable for medium and long-term investments. Because they hardly increase in value over time.

The third category is virtual currencies that are not based on any project. They are evaluated based on the number of users and current trends. The risks of the disappearance of these currencies are also great.

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