Learn Cryptocurrency
22 Nov 2021

Understanding Most Popular Types Of Cryptocurrency 2021

Akumbenla Jamir

There was a period when the number and the types of cryptocurrency could be counted. However, that’s not possible anymore today. Cryptocurrencies can behave like real money—and, in some ways, are actual money—but they have a digital monetary form and are not managed or governed by any central body. 

Cryptocurrencies are a genuine product of the digital age, operating without banks, governments, or any other middlemen. To purchase and sell bitcoin or different types of cryptocurrency in India, you will almost always need to use a digital currency exchange.

In this article, let’s understand the cryptocurrency types and how many cryptocurrencies are there in the market.

Key Takeaways:

  • The blockchain is the link that connects the three major types of cryptocurrencies.
  • Bitcoin was the first blockchain system.
  • There are currently more than 1,000 altcoins in circulation.
  • Crypto tokens can be used to store wealth, invest, or purchase things.
  • Digital gold is a cryptocurrency that can store and increase in value like gold.
  • Stablecoins are like your currency notes with fixed/ stable value.
  • Memecoins are concerned more with jokes than values.

What Is Cryptocurrency?

Cryptocurrency is a product of a digital ledger that works on Blockchain technology. Many cryptocurrencies function to solve a real-world problem (think of  Bitcoin as a source of investment avenue that will help diversify your portfolio ). Many firms have created their currency, known as tokens, to facilitate the trade of products and services. You can think of them as a kind of token you buy in a fair or mela. However, in today’s world, cryptocurrency has found its place as a trading instrument, used by many to broaden its asset portfolio. 

The Three Major Types of Cryptocurrency 

Blockchain has connected three major types of cryptocurrencies. The first blockchain was Bitcoin.

Blockchains formed after Bitcoin are known as Altcoins. Altcoins such as Ethereum, Polkadot, and Cardano are excellent examples. Finally, I must present tokens/dApps, the third and most crucial sort of cryptocurrency. Uniswap, IDEX,  MakerDAO, and  CryptoPunks are a few examples of tokens.

So, let’s get explore the types of cryptocurrency!

Bitcoin

Launched in January 2009, Bitcoin is a form of digital currency. It is based on the principles presented in a whitepaper by Satoshi Nakamoto. Satoshi is the one who revolutionized Bitcoin by bringing it to the mainstream. Bitcoin promises reduced transaction fees than standard online payment methods and is an excellent avenue for investment purposes.

The Bitcoin network is a peer-to-peer system where every transaction is between two people. The blockchain allows this to happen. Blockchain technology was first applied to Bitcoin transactions, enabling users to move money without a third party. Hence you do not need to reveal your identity and be safe from unauthorized access.

There’s no doubt that Bitcoin is and will remain one of the significant types of cryptocurrency in the world. It will revolutionize the finance industry and make investments smoother and safe.

So, now let’s understand the term “Altcoins”

Altcoins 

So, next comes Altcoins. There are currently more than 1,000 altcoins in circulation. However, don’t let that figure worry you—most altcoins are the cryptocurrency types that are essentially modified versions of Bitcoin. That’s how Altcoins came into existence.

Although it is true that Bitcoin is the most well-known cryptocurrency, it is essential to keep in mind that not all cryptocurrencies are simply copies of Bitcoin. The Bitcoin alternatives vary significantly in their values and objectives.

Ethereum and Cardano are the best examples of altcoins. The platforms were designed to allow developers to build apps using blockchain technology. This can happen with smart contracts. Smart contracts can help to execute transactions when certain things happen automatically.

Finally, let us attempt to understand the third most common sort of cryptocurrency, Tokens.

Tokens 

Unlike many other types of cryptocurrency, crypto tokens are asset-based and are located on their blockchain. Tokens can be used to store wealth, invest, or purchase things. Other uses for crypto tokens include fundraising through crowd sales, but they can also substitute something like financial instruments. The creation, distribution, sale, and circulation of these tokens commonly occur through the standard initial coin offering (ICO) process, including fundraising to support the project.

Here are a few types of tokens present in the market:

  • Payment tokens (Used to store value)
  • Utility tokens (Used to gain access to a blockchain-based product or service)
  • Security tokens (Gives the holder ownership rights)
  • Non-fungible tokens ( Here Each token represents a specific asset like an image)

Litecoin, Dash, and Bitcoin Cash are examples of payment tokens. You can make purchases using these tokens as they store value.

Similarly, Utility tokens are used to gain access to any blockchain services. Funfair, Basic Attention Token, and  Brickblock are used as utility tokens.

Security tokens are merely used for ownership rights. PathFund, SafeMeme, MemePad, and TrustPad are some of the examples of Security tokens.

An NFT (Non-fungible token) is a piece of data that is kept or accounted for in a digital ledger representing something specific. An NFT can describe a piece of artwork, a music CD, or other types of digital assets. Cryptopunks and Nyan cats are a few examples of NFT’s.

Types Of Cryptocurrency

Other Types of Cryptocurrencies 

Digital Gold 

Digital gold is a cryptocurrency that can store and increase in value like gold. There is a finite supply of gold on earth, just as there is a limited supply of the digital gold cryptocurrency. Although, Bitcoin is the most widely used digital gold cryptocurrency.

Internet money 

Internet money is something you may use to make purchases on the internet. Bitcoin was designed to be digital cash at first, but speculation led to the introduction of another cryptocurrency, Bitcoin Cash (a variation of Bitcoin). Bitcoin’s price was too erratic to be acceptable money, which supporters of Bitcoin Cash claimed was the whole idea of the currency in the first place. XRP (Ripple) is also a great example of Internet money. 

Stablecoin or Digital Fiat 

A stablecoin ties its value to a banknote or another form of security. Experts claim that digital fiat is just a government-backed currency on the blockchain. Tether, a cryptocurrency whose value is fixed to the dollar, is a prime example of digital fiat.

Memecoins 

Memecoins are cryptocurrencies related to a specific topic, usually a joke rather than an actual commodity. The first memecoin was dogecoin, named after a famous internet dog.
PutinCoin, Whoppercoin are the other examples of memecoins.

I’m aware that there are a lot of these cryptocurrency types. So, if you’re wondering how to buy these coins, let me explain immediately.

Where to Buy All Types of Cryptocurrencies in India? 

With so many types of cryptocurrencies available right now, no single location provides access to them all. 

CoinSwitch Kuber, on the other hand, is a major trading platform that now supports more than 80 cryptocurrencies. You may easily make an account by downloading the Coinswitch Kuber App to your phone. 

Want to buy XRP directly in India? Do it easily on CoinSwitch.

Conclusion

While Bitcoin pioneered a new asset class a little more than a decade ago, there are now a plethora of cryptocurrencies for investors to learn about and invest in.

If your interest in cryptocurrency is inspired by a desire to begin investing, CoinSwitch Kuber can be a wonderful place to start. CoinSwitch Kuber customers may manage their crypto assets on the CoinSwitch Kuber app, with the comfort that their crypto is on a secure platform.

FAQs on Popular Types Of Cryptocurrency: 

What Types of Cryptocurrency are There?

The blockchain connects the three major types of cryptocurrencies: Bitcoin, Altcoins, and tokens/dapps.

How to Buy all Types of Cryptocurrency? 

Opening a wallet with one of the major cryptocurrency exchange websites is the best approach to purchasing coins. You can go to CoinSwicth Kuber and open an account and start trading with 100+ Cryptocurrencies available there.

Which is the Cheapest Cryptocurrency? 

Polygon, Cardano, Ripple, etc. are some of the cheapest Cryptocurrencies available in the market. You can refer to our guide on the list of  Cheapest cryptocurrencies here.

Want to track Ripple prices live? Here’s our price ticker.

How many Types of Cryptocurrency are there in the world? 

There are more than 10,000 different types of cryptocurrencies. However, the main categories are Bitcoin, Altcoins, and Tokens.


Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.

writer

Akumbenla Jamir

Content Writer

Table of content