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Types of Cryptocurrency: An Overview & Understanding

We hear a lot about digital currencies, and in a sense, we find them acting like real money, and in many ways, they are real money. However, they form a digital monetary format while not governed or managed by a central authority. It is regarded as the actual product of the modern-day digital world; we see digital currencies operating without the involvement of any state of its agency and central banks. One can find it to be an honest and true product of the modern-day world. At the same time, we see digital currencies operating more like fiat currencies in one way or the other. Still, its beauty is that it has no involvement of any government, bank, or any kind of middleman in it. Most of the time, we see it being used as a digital currency exchange for buying and selling digital assets.

In the year 2020 alone, one has witnessed a whopping 50 Million consumers of blockchain-based wallets. When it comes to adding security to digital currencies, encryption is the key, which comes up seeking specialized computer programming language or codes known as cryptography. These are simply designed using complex puzzles in terms of purpose, making them tough to crack or hack. As per reports published in the journal Statista, by the end of September 2020, the wallet users were not less than 50 million, which is a huge figure. These included around 7 million active consumers of Bitcoin. We see several market insiders as crypto king to BTC, and the trend continues as it remains on the top. The sites like www.bit-iq.io can give you some more ideas about it.

Now, the big question, how many different types of Cryptocurrency are there in the market? By April 2021, one can find around 10K different types of digital currencies. These can be divided into two different types of categories – Coins and Tokens. Let’s check the basics of crypto tokens and coins.

The Coins & Tokens 

Both coins and tokens can be put under the heads of digital currency or crypto. Generally speaking, these can be put into two different kinds of digital currencies – Altcoins (alternative cryptocurrency coins) or tokens.

Altcoins – These refer to any type of coins, which are not specifically bitcoins. Bitcoins can often be called the most popular Cryptocurrency in the market, produced or mined using complex mathematical problems and computational work. This is very much separate from state or central bank entities like, for example, the government-backed Treasury. If you talk about some of the key altcoins, these can include the following:

  • Peercoin
  • Dogecoin
  • Litecoin
  • Auroracoin
  • Namecoin

The fact of the matter is that the very term altcoin is nothing but something that means the alternative to bitcoin, while Namecoin can be called the first altcoin, which came into existence in 2011. Like the digital coins, including Bitcoin, one can find several digital currencies that are seen getting limited to supply of coins, which comes like a balance when it comes to checking and reinforcing as it is perceived value. One can find a fixed number of bitcoins existing with 21 million as created and decided by the bitcoin. However, one can find a few not remaining to be mined. As far as the total number of bitcoins is concerned, there are only 21 M of them, which is decided as per the creators of bitcoin. However, some are lined up to be mined. Once we see all the 21 Million of these coins to be mined, the coin’s protocol is not to be allowed for it.

Though most altcoins are developed as per the key basic framework as seen in bitcoin, several claims are yet to be made like better versions of BTC. Each of the systems can be seen differing a lot from the rest of the same since these are very much created to serve different types of purposes along with different applications, and it is found in different methods. Some of these digital coins function as per the open-source protocol that bitcoin does. However, the coins like ETH, Omni, Ripple, Nxt, Counterparty, and Waves, to name a few, are created in their ways.