Cryptocurrency basically are digital money that are stored or kept on computers. The term can also refer to a digital channel of trade protected by cryptography, or the mathematics-based method for coding and encoding data.
The decentralized database that stores information about all transactions made by members within its network is known as blockchain. The blockchain serves as a digital register for storing, securing and processing of cryptocurrency transactions. The data is stored as a chain of blocks, each containing a certain number of transactions.
The blockchain is not only widely known for various types of financial transactions, but also used for settling trades, voting, identity verification, network security, fund transfers, etc.
Below are some of the broadly known types of cryptocurrencies and how their genesis.
Popular Types of Cryptocurrency
1. Bitcoin (BTC)
Bitcoin (BTC) was the first digital currency and remains the most valuable and widely recognized digital asset today. The background of this type of cryptocurrency dates back in 2008, when an unknown person or persons going by the name Satoshi Nakamoto published the white paper “A Peer-to-Peer Electronic Cash System.“. In 2009, Bitcoin was launched introducing the world to decentralized digital currency. To transform cryptocurrency from a theoretical form to a real trading asset, the New Liberty Standard established the initial exchange rate in the same year. It was the first fully operational and reliable blockchain-based decentralized payment system.
A single Bitcoin can be divided into eight decimal points. The smallest unit is a satoshi (sat), which is 1/100,000,000th of a Bitcoin. The bitcoin blockchain is effective for financial transactions because it cannot be altered and that makes it immutable. Bitcoin uses a consensus algorithm known as Prof-of-Work consensus mechanism.
2. Ethereum (ETH)
Ethereum (ETH) was founded by Vitalik Buterin in 2013 with other co-founders like Gavin Wood and Joseph Lubin joining later. The Ethereum network was officially launched with the mining of the first block in 2015.
Ethereum is depicted as “the world’s programmable blockchain,” stationing itself as an electronic, programmable network by which a launch and decentralization of cryptocurrencies and its applications can be done by anybody. Ethereum currently uses “Proof-of-Stake” consensus mechanism which uses major less energy.
3. Ethereum Classic (ETC)
Ethereum Classic (ETC) emerged in 2016, as a continuation of the original Ethereum blockchain following an agreement in the original protocol leading to a diverge of the protocol.
Ethereum Classic also operates a “Prof of Work” consensus mechanism that is dedicated to enabling decentralized, immutable, and unstoppable applications. Users of this currency run hardware and software to verify and secure transactions on the network. The Ethereum Classic platform is not as functional as the Ethereum network.
4. Litecoin (LTC)
Litecoin (LTC) is a cryptocurrency that was introduced by Charlie Lee (a former Google engineer) in 2011. It is one of the oldest cryptocurrencies and often called “digital silver”. Litecoin also uses a Prof-of-Work consensus mechanism where Litecoin becomes the reward for anyone who devotes their resources. It was equally created to establish a blockchain network to contain a wider range of transactional requirements.
5. Stellar (XLM)
Stellar is a public blockchain that was founded and launched in 2014 and 2015 respectively. It is a decentralized cryptocurrency which is managed by the Stellar Development Foundation, an institution formed by Jed McCaleb. Stellar, unlike bitcoin is a blockchain that makes payments simpler by helping users to create, send, and trade digital representations of all forms of money. It gives anyone the tools to create experiences that are more like cash than crypto. It aims to bring the world’s finance systems together on a single network. It aims to reduce huge transactional cost due to the nature of cross-border transfer and payment system.
6. Zcash (ZEC)
Zcash is an electronic currency that keeps all financial information private and, in control of investors. Zooko Wilcox who is the founder with a group of scientists from MIT, Johns Hopkins, and other respected academic institutions launched this digital currency in October 2016. Zcash is a cryptocurrency built to empower financial freedom. The protocol provides an alternative for transactions to be either shielded – they will be completely invisible, or transparent – they will be visible on the Zcash blockchain ledger.
7. Chainlink (LINK)
Chainlink is also an electronic currency exchange which was co-founded by Sergey Nazarov and Steve Ellis in 2017. It is termed ‘Chain-link’ because it is the lost link between the real world and blockchains. It serves as the bridge that joins traditional systems with blockchains. The Chainlink provides integration capacities to blockchain networks, which paves way for communication to exist between them.
8. Uniswap (UNI)
Uniswap is a type of crypto currency founded in 2018, which uses an associated token (UNI) to enable users directly trade crypto through smart contracts without the involvement of middlemen. Here, traders are not vulnerable to security risks of a centralized exchange after depositing their tokens on an exchange. UNI brought about the decentralized financial services ecosystem called decentralized finance or DeFi.
9. Bitcoin Cash (BCH)
Bitcoin Cash is a peer-to-peer cryptocurrency founded invented in August 2017. It is one of the fastest and cheapest electronic cash, with transaction fees less than a penny. It is a network that runs without congestion and that makes it reliable. Bitcoin Cash has been in operation continuously since 2017 without any downtime and it is protected by battle-test SHA-256 proof-of-work, and that makes it secured. You can send money to anyone, anywhere in the world using Bitcoin Cash at any given moment.
10. Decentraland (MANA)
Decentraland is a virtual reality platform, created in 2020 and it runs on the Ethereum blockchain. It is a crypto application that makes virtual reality and blockchain technologies work together. The blockchain helps players to securely record transactions, and the virtual reality gives players the avenue to be partakers of experiences on the network. MANA is Its associated ERC-20 token cryptocurrency, and users on the platform use NFTs to buy virtual plots of land.
