With thousands of cryptocurrencies on the market, it can feel overwhelming, can’t it? Where do you start and what do they all do? Whether you are looking to invest, earn, or store cryptocurrencies, it bodes well knowing the different types of cryptocurrency out there.
Each one has its use case and areas they specialize in. Without doing your own research, you will feel lost in the mix. Do not let this get the better of you.
With anything new, you’ll want to start slow. As you acquire new knowledge, you will begin to build your crypto confidence. You can start right here by reading our crypto coin guide below.
When researching the different types of cryptocurrency, let’s look at ones used for payment first. You can think of these kinds of cryptocurrencies as digital money all sharing the same blockchain. You will find ones that wish to compete with fiat and others designed for a specific use case or industry.
Bitcoin was designed as a peer-to-peer cash system and an alternative to fiat. As blockchain technology evolved, other cryptos (altcoins) improved upon Bitcoin’s scalability and speed. For example, Bitcoin Cash forked Bitcoin’s code with this in mind and serves as cash crypto whereas Bitcoin is more of a store of value.
There are also stablecoins that are pegged to the US Dollar yet offer the transparent benefits of cryptocurrency. Visa crypto cards allow for anyone to spend crypto worldwide too.
Programs running on a blockchain are often paid by infrastructure cryptocurrencies. For example, if users wish to use dApps on the Ethereum blockchain they must use Ether to do so.
Different infrastructure blockchains with different use cases all require different types of cryptocurrency to work. Interoperability comes into play here too which allows linking of multiple blockchains to interact with one another with their respective tokens.
Other than Ethereum, these kinds of cryptocurrencies include Algorand (ALGO), Cardano (ADA), and Polkadot (Dot).
What about crypto investments? Financial cryptocurrencies allow people to exchange and manage their crypto assets. You can trade these different types of cryptocurrency of decentralized exchanges. Users can also make decisions on how the cryptocurrency should function.
DeFi (decentralized finance) has opened the crypto world up to things like lending and borrowing too. We also see certain types of crypto speculating the outcome of events.
Crypto investing for beginners can be somewhat of a hurdle. One of the ways around this is to start doing things that you are already doing and earn crypto for it. This is where media crypto comes into play.
Users will love earning crypto for creating content (writing, video), games, or social media. BAT or Basic Attention Token is a way of incentivizing users by browsing the web with Brave’s browser. Soon, we will see this open up with things like the metaverse, virtual, and augmented reality.
Explore the Many Different Types of Cryptocurrency
Are you itching to explore the many different types of cryptocurrency out there? With this new and exciting technology, you’ll want to take a methodical approach. It’s best not to go with your emotions or give in to FOMO (fear of missing out).
To stay in touch with the crypto world at large, be sure to read our blog. Once you acquire enough skills, you can move through this new economy more effortlessly.