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Over ten years since the first cryptocurrency hit the world, the numbers have multiplied over time. According to the listing on CoinMarketCap, there are over 1500 cryptocurrencies listed on the Cryptocurrency analytical market. It’s so surprising that there are these many cryptocurrencies when it is barely a decade since the inception of Bitcoin, the first.
It should be general knowledge that different blockchains are developed to care for different purposes. Some were developed to care for payments, security, content ownership (NFTs), social network, gaming, health, finance, etc. In general, they are cryptocurrencies but looking at them; we can categorize them based on different reasons like:
- Payment Cryptocurrency
- SmartContract Cryptocurrency
- Privacy and Security Cryptocurrency
- Utility Cryptocurrency
- Stable Coins
- Meme Coins
Payment Cryptocurrency: These cryptocurrencies are accepted as forms of payment. Cryptocurrencies have gained a lot of attention from different people and sectors, including businesses, companies, etc. Most of these organizations are searching for much more flexible and quick payment methods. These cryptocurrencies can be used to pay for bills, goods, and other services. In addition, it can be used as a means of reward on investments. You might be wondering why some cryptocurrencies are tagged payment cryptocurrencies and not all. Before a cryptocurrency can be used as a payment option, it undergoes valuations. Some of the notable cryptocurrencies used as payment options include Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH), etc.
SmartContract Cryptocurrency: These are cryptocurrencies that work on the smart contract means of executing contracts. This enters the information of a transaction in strings of codes across nodes in a blockchain network. The execution of the transaction is dependent on the codes. These transactions are traceable but irreversible if an error occurs. SmartContract is the enforcer of the primary mission of cryptocurrencies, Decentralised exchanges. It cancels out the need for a middle man like a central authority, legal system, etc.
Privacy and Security Cryptocurrency: These Coins are designed to focus on an aspect of online transactions that most people are interested in – privacy. They are anonymous, hence promoting privacy and securing the identity of its users. Privacy cryptocurrencies ensure that their users’ transactions are anonymous and untraceable. Consequently, all transactions are impossible to trace while using services like blockchain analysis if there’s a need to follow the trail. Some of these cryptocurrencies that operate as private coins include ZCash (ZEC), Monero (XMR), PIVX (PIVX), etc.
Utility Cryptocurrency: Some cryptocurrencies are developed mainly to function as utility coins. They are used for a specified blockchain service. They have values, but they do not have flexibility like payment cryptocurrencies. These coins run on blockchain technology like ERC-20, TRC-20, etc. They provide value to investors via other means. Some of these Utility tokens are usually obtained during ICOs. Examples of Utility coins include Basic Attention Token (BAT), Civic (CVC), OmiseGo (OMG), and 0x (ZRX).
Stable Coins: These are digital clones of fiat currencies. Thus, they operate as regular currencies would. They are usually used to purchase other cryptocurrencies acting as centralized and acceptable trading currencies. They are used by traders who want to avoid losing a specific cryptocurrency during a dip. These coins provide accessibility and mobility to their users. Some of these Stablecoins include USD Coin (USDC), Paxos (PAX), Gemini (GUSD), TrueUSD (TUSD), Tether (USDT), Dai (DAI), and so on. Click here for more info if you wish to know how to earn more via your stable coin.
Meme Coins: These meme-inspired cryptocurrencies operate like every cryptocurrency, although their features may differ. They function as community tokens because their values are influenced by their actions. Examples of meme coins include Dogecoin( DOGE), Shiba Inu(SHIBA), Dogelon Mars (ELON), Akita Inu (AKITA), etc.