The world of crypto has changed immensely in the past ten years. Back in late 2020, the idea of a digital currency was crazy. Fast-forward 30-some months and digital currencies have taken the world by storm.
Some people even consider digital currencies such as Bitcoin as the global currency of the future and refer to it as Digital Gold. However, if you are still wondering “what is Bitcoin“, you may want to read up on Bitcoin before coming back to learn about the other “ALT” coins.
It’s about time you caught up and learned about some of the other types of crypto. Read on!
Ethereum
Ethereum is one of the most popular types of crypto beyond Bitcoin. It is a decentralized platform that runs smart contracts. Also provides a shared global infrastructure for decentralized applications.
Smart contracts are scripts that self-execute when certain conditions on the Ethereum blockchain are met. It has a variety of uses, including finance, legal documents, gaming, and asset tracking.
It can be typically used to create tokens, such as Ether or DAI, which can be used in exchange for other digital assets.
Ripple
Ripple is based on a distributed record system, which is an improved version of the blockchain technology that Bitcoin uses. Instead of mining, the consensus is used to check Ripple transfers. This means that validations happen in a much shorter amount of time, making payments go through faster and giving more security.
Ripple is being used for many different things because it is both a payment network and a coin. For example, it is being used to make payments, give liquidity to financial institutions, and make cross-border payments easier.
Litecoin
Litecoin is a type of cryptocurrency that is similar to Bitcoin in a lot of ways, but it also has some benefits that Bitcoin doesn’t have. Litecoin is open-source, decentralized, and runs on a blockchain, just like Bitcoin.
It is also a digital exchange that lets people send money to each other for a small fee. Litecoin, on the other hand, uses a different proof-of-work method called script instead of Bitcoin’s SHA-256.
Stellar
Stellar is a third-generation blockchain technology and is becoming increasingly popular amongst cryptocurrency enthusiasts. It is designed to stay close to its original roots and was effectively created to promote financial inclusion and provide a trustable, secure, and more efficient platform for cross-border payments.
The stellar network allows for real-time, low cost and high-speed global payments, including cross-border transfers and micropayments.
Zcash
Zcash is a security-focused digital currency created in 2015. It is analogous to Bitcoin but with additional privacy features, guaranteeing users greater anonymity, a faster transaction speed, and a wider variety of features.
It is also based on a proof-of-work algorithm which allows for a secure digital signature to be typically sent to a recipient, with the signature taking the form of a cryptographic shield, hiding key information about the user such as account balance and transaction details.
Overall, it is important to learn about the different types of crypto. Reading a cryptocurrency risk management book can help investors identify, assess, and control digital asset risks.
A Guide to Knowing Different Types of Crypto
Cryptocurrencies come in all shapes and sizes and have many uses. This guide has helped you become familiar with the various types of crypto, how they work, and the unique advantages and challenges they pose.
Teach yourself more about cryptocurrency and take advantage of the potential that it holds. Want to learn more? Reach out to a cryptocurrency professional to get advice on the best crypto type for your needs.
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