
10 popular types of cryptocurrency and how they work
There are thousands of cryptocurrencies—but they’re not all the same. We reveal the 10 most popular types of cryptocurrency.
6 min read
The following statements do not constitute investment advice or any other advice on financial services, financial instruments, financial products, or digital assets. They are intended to provide general information. The following statements do not constitute an offer to conclude a contract for the purchase or sale of financial instruments and financial products or an invitation to submit such an offer and to buy or sell any particular digital asset. Cryptocurrencies are subject to high fluctuations in value. A decline in value or a complete loss are possible at any time. The loss of access to data and passwords can also lead to a complete loss.
Summary:While many cryptocurrencies share a blockchain-based infrastructure, there are some striking differences between them. Generally speaking, cryptocurrency can be clustered into two distinct categories: coins and tokens.A coin is any cryptocurrency that uses its own independent blockchain. For example, Bitcoin is considered a “coin” because it runs on its own infrastructure. Similarly, Ether is operated via the Ethereum blockchain. The term “altcoin” is used to refer to any coin other than Bitcoin. Many altcoins operate similarly to Bitcoin. However, others, such as Dogecoin, are rather different. Doge, for instance, offers an unlimited supply of coins compared to Bitcoin’s cap of 21 million coins. Like coins, tokens are also digital assets that can be bought and sold. However, tokens are a non-native asset, meaning that they use another blockchain’s infrastructure. These include Tether, which is hosted on the Ethereum blockchain, and others, including Chainlink, Uniswap, and Polygon.Bitcoin was the world’s first cryptocurrency,
Summary:
- There’s a wide range of cryptocurrencies, from niche altcoins to mainstream ones like Bitcoin, and each one has unique traits.
- Cryptocurrencies have diverse functions and uses. For example, coins like Bitcoin run their own blockchain, while tokens like Tether rely on existing blockchains.
- This article looks at the top 10 cryptocurrencies — their distinctive features, underlying technologies, and place in the digital currency landscape.