In 2009, Satoshi Nakamoto, a person (or potentially a group) that goes by the moniker Satoshi Nakamoto, created Bitcoin, the first cryptocurrency. Earlier, as of September 2021, there were more than 18.8 million Bitcoin tokens in circulation, compared to a maximum limit of 21 million.
Bitcoin was created to be self-contained and unaffected by any government or central bank. Instead, it uses blockchain technology, which is a decentralized public ledger that keeps track of every Bitcoin transaction. Bitcoin established the basic encryption and consensus (i.e., peer-to-peer) verification method that is the core of today’s cryptography.
Bitcoin miners utilize powerful computers to verify transaction blocks and generate new bitcoins, a complicated and time-consuming process known as proof-of-work (PoW). The transactions are permanently recorded on the blockchain, which aids in the validation and security of each bitcoin as well as the entire network. The massive amount of energy required to manufacture Bitcoin has recently sparked environmental concerns.
Like Bitcoin, Ethereum is a blockchain network, but it was built as a programmable blockchain, which means it wasn’t built to support a currency, but to allow users to create, publish, monetize, and use decentralized apps (dApps). The native Ethereum currency, Ether (ETH), was created as a means of payment on the Ethereum network.
Ether was the second most popular virtual currency in September 2021, trailing only Bitcoin. A proof-of-work system is also used to generate ETH. Unlike Bitcoin, however, there is no limit to how many ETHs can be created.
Because numerous ICOs use the Ethereum blockchain, Ethereum has aided in the growth of many initial coin offerings. Non-fungible tokens (NFTs) – digital representations of art or collectibles linked to a blockchain and manufactured one-of-a-kind — have also exploded in popularity thanks to Ethereum.
Cardano promotes itself as a third-generation blockchain platform to position itself as a serious contender. Cardano uses proof-of-stake (PoS), which eliminates the need for the complicated PoW computations and high electricity consumption required for mining coins like Bitcoin, potentially making the network more efficient and sustainable.
Ada Lovelace, a 19th-century mathematician, is the inspiration for Cardano’s cryptocurrency, ADA.
Identity management and traceability are two of Cardano’s key applications.
Binance Coin (BNB)
Binance Coin (BNB) is a cryptocurrency token established to be used as a medium of exchange on Binance, which is one of the world’s largest cryptocurrency exchanges. It was originally built on the Ethereum blockchain but now runs on Binance’s platform.
BNB was developed in 2017 as a utility token that allowed traders to receive savings on Binance trading fees, but it can now be used for payments, booking travel, entertainment, online services, and even financial services.
Tether was the first cryptocurrency to be promoted as a “stablecoin” – a type of cryptocurrency that is backed by fiat cash. The tether’s value is determined by a fiat currency, in this example the US dollar.
Tether, like other stablecoins, is designed to provide users with stability, transparency, and lower transaction fees. Tether, unlike several cryptocurrencies, is not a speculative investment; rather, it can be utilized by investors who want to escape the crypto market’s severe volatility. Tethers accounted for 57 percent of bitcoin trading as of February 2021.
Solana is a blockchain platform that produces the Sol cryptocurrency. The Sol, one of the more volatile currencies in recent years, was trading at around $191.00 on September 10, 2021, compared to $3.42 a year before.
Ripple Labs, Inc. is the company that created XRP. While some people confuse the names XRP and Ripple, they are not interchangeable. Ripple is a financial services company’s global money transfer network. XRP is a cryptocurrency that was created specifically for use on the Ripple network. XRP can be purchased as an investment, a coin to trade for other cryptocurrencies, or a way to fund Ripple transactions.
Unlike Bitcoin and many other cryptocurrencies, XRP can’t be mined; instead, there is a limited number of coins — 100 billion XRP that already exist. Also, XRP doesn’t rely on a complex digital verification process via blockchain the way Bitcoin and others do. The Ripple network employs a unique system for validating transactions in which participating nodes conduct a poll to verify transactions. This makes XRP transactions faster and cheaper than Bitcoin.
Dogecoin is an altcoin similar to Bitcoin and Ethereum in that it’s run on a blockchain network using a PoW system. But the number of coins that can be mined are unlimited (versus the 21 million-coin cap on Bitcoin).
Dogecoin is also associated with some headline moments in crypto; investors paid the equivalent of about $30,000 in Dogecoin to help send the Jamaican bobsled team to the Winter Olympics in 2014.
Despite its place as one of the biggest coins by market cap, it trades at one of the lowest prices: about 24 cents, as of Sept. 10, 2021.
Polkadot was developed by Gavin Wood, who was also a co-founder of Ethereum, to expand the possibilities of a blockchain network. Dot is the name of the blockchain’s coin.
Polkadot uses two blockchains: a main “relay” network with permanent transactions and a parallel network of user-created blockchains known as “parachains.” Parachains can be adjusted for a variety of purposes, such as constructing apps (and even supporting other currency), and they benefit from the main blockchain’s security.
USD Coin (USDC) is a stablecoin that is supported by Ethereum and other blockchains. It has a fixed exchange rate with the US dollar. A USDC is worth one US dollar, just like the stablecoin tether (USDT) explained above — the guaranteed 1:1 ratio makes it a stable method of exchange.
The purpose of a stablecoin like USDC is to make transactions more efficient and less expensive.