What Are Cryptocurrencies?

Cryptocurrency is a special form of currency that exists solely in digital form. Cryptocurrency can be utilized to spend for purchases online without going through an intermediary, such as a bank, or it can be held as an investment. From Bitcoin and Ethereum to Dogecoin and Tether, there are thousands of different cryptocurrencies, which can make it overwhelming when you’re trying to understand crypto. To help get your bearings, these are the leading 10 cryptocurrencies based on their market capitalization (as of 9/14/2021) ,e.g., the overall value of all of the coins presently in circulation. 

1. Bitcoin (BTC) 

Market cap: Over$ 886 billion 

Developed in 2009 under the pseudonym Satoshi Nakamoto, Bitcoin (BTC) is the original cryptocurrency. Just like a lot of cryptocurrencies, BTC works on a blockchain, or a ledger distributed across a network of thousands of computer systems. Due to the fact that additions to the dispersed journals need to be confirmed by solving a cryptographic puzzle, a process called proof of work, Bitcoin is kept protected and safe from scammers.

Bitcoin’s price has actually increased as it is now for “face” of the industry. 5 years earlier, you could purchase a Bitcoin for about $500. As of September 2021, a single Bitcoin’s price was over $47,000; a growth of about 8,900%. 

2. Ethereum (ETH) 

Market cap: Over $402 billion 

Both a cryptocurrency and a blockchain platform, Ethereum is a favorite of program developers due to the fact that its applications, called smart contracts instantly carry out when conditions are satisfied and issue non-fungible tokens (NFTs). Ethereum also has seen tremendous growth. In just five years, its cost went from about $11 to over $3,000…up by about 27,000%. 

3. Cardano (ADA) 

Market cap: Over $76 billion 

Somewhat late to the crypto scene, Cardano is notable for its early embrace of proof-of-stake validation. This approach expedites transaction time and decreases energy usage and environmental impact by getting rid of the competitive, problem-solving aspect of transaction confirmation present in platforms like Bitcoin. 

Cardano likewise works like Ethereum to enable smart contracts and decentralized applications, which are powered by ADA, its native coin. Cardano’s ADA token has actually had reasonably modest growth compared to other crypto coins. In 2017, ADA’s price was $0.02. Since September 2021, its price was at $2.40. This is an increase of over 10,000%.

4. Tether (USDT) 

Market cap: Over $69 billion 

Unlike some other forms of cryptocurrency, Tether is a stablecoin, which means that it’s backed by fiat currencies like U.S. dollars and the Euro and hypothetically keeps a value equivalent to one of those denominations. 

In theory, this means Tether’s value is more constant than other cryptocurrencies, and is thus favored by investors who are wary of the extreme volatility of “untethered” coins. 

5. Binance Coin (BNB) 

Market cap: Over $63 billion 

The Binance Coin is a type of cryptocurrency that you can utilize to trade and pay charges on Binance, which is among the biggest crypto exchanges worldwide. Since its launch in 2017, Binance Coin has actually expanded past merely assisting in trades on Binance’s exchange platform.

Now, it can be utilized for trading, payment processing and even booking travel.  It can likewise be traded or exchanged for other forms of cryptocurrency, such as Ethereum or Bitcoin. Its price in 2017 was $0.10; by September 2021, it had actually increased to over $413, a gain of nearly 419,000%. 

6. XRP (XRP)

Market cap: Over $46 billion 

Produced by some of the very same founders as Ripple, a digital technology and payment processing company, XRP can be utilized on that network to assist in exchanges of various currency types, consisting of fiat currencies and other major cryptocurrencies. At the beginning of 2017, the cost of XRP was $0.006. As of September 2021, its price reached $1.10, equivalent to an increase nearly 19,000%. 

7. Solana (SOL) 

Market cap: Over $46 billion 

Established to help power decentralized finance (DeFi) uses, decentralized apps (DApps) and smart agreements, Solana works on a special hybrid proof-of-stake and proof-of-history concept that allows it to process transactions quickly and securely. SOL, Solana’s native token, powers the platform. Released in 2020, SOL’s rate started at $0.77. By September 2021, its price was $156.76, a gain of 20,358%. 

8. Polkadot (DOT) 

Market cap: Over $38 billion 

Cryptocurrencies might use any variety of blockchains; Polkadot (and its namesake crypto) aims to integrate them by developing a cryptocurrency network that links the different blockchains so they can work together.

This combination might alter how cryptocurrencies are managed and has spurred remarkable development since Polkadot’s launch in 2020. From September 2020 to September 2021, its price grew 1,285%, from $2.93 to $37.66

9. Dogecoin (DOGE) 

Market cap: Over $40 billion 

Dogecoin has been a hot topic thanks to celebs and billionaires like Elon Musk.  Notoriously begun as a joke in 2013, Dogecoin rapidly ended up being a popular cryptocurrency alternative, thanks to a dedicated community and innovative memes. Unlike many other cryptos, such as Bitcoin, there is no limit on the variety of Dogecoins that can be produced, which leaves the currency vulnerable to devaluation as supply increases. Dogecoin’s price in 2017 was $0.0002. By September 2021, its price was at $0.24– a 120,000% increase. 

10. USD Coin (USDC) 

Market cap: Over $29 billion 

Like Tether, USD Coin (USDC) is a stablecoin, as it’s backed by U.S. dollars and aims for a 1 USD to 1 USDC ratio. USDC is powered by Ethereum, and you can use USD Coin to complete worldwide transactions. 

How Does Trading Cryptocurrencies Differ from Stocks? 

While you can buy cryptocurrencies, they differ from conventional investments, like stocks. When you purchase stock, you are buying a share of ownership of a company, which suggests you’re entitled to do things like vote on the instructions of the company.

If that company declares bankruptcy, you also may receive some payment once its lenders have actually been paid from its liquidated possessions. Buying cryptocurrency doesn’t approve you ownership over anything other than the token itself; it’s more like exchanging one type of currency for another. If the crypto loses its value, you won’t get anything after the fact. 

There are several other essential differences to keep in mind: 

  • Trading hours: Stocks are only traded throughout stock market hours, normally 9:30 am to 4:30 pm ET, Monday through Friday. Cryptocurrency markets never ever close, so you can trade 24 hr a day, seven days a week. 
  • Regulation: Stocks are managed monetary items, indicating a governing body that verifies their credentials and that their finances are matters of public record. By contrast, cryptocurrencies are not controlled investment vehicles, so you may not be aware of the inner characteristics of your crypto or the developers dealing with it. 
  • Volatility: Both stocks and cryptocurrency include risk; the cash you invest can decline. Nevertheless, stocks are directly connected to a business and normally rise and fall based upon those companies’ performance. Cryptocurrency prices are more speculative– no one is quite sure of their eventual value yet. That makes them a lot more unstable and impacted by something as small as an Elon Musk tweet. 

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