If you are confused by the different types of digital coins in the market, you have come to the right place.
Altcoins (alternative coins) is a term used to describe all cryptocurrencies other than Bitcoin (CRYPTO: BTC). A combination of the words ‘alternate’ and ‘coin’, altcoins currently make up more than 60% of the crypto market.
The first altcoin -Namecoin (CRYPTO: NMC) launched in April 2011, and, by now, there are over 17,000 of them as of February 2022. Early altcoins aimed at improving aspects of Bitcoin such as transaction speeds or energy efficiency. More recent altcoins serve a variety of purposes depending on the goals of the developers. Let’s take a closer look at what altcoins are and understand the basics of altcoins.
Types of Altcoins
Altcoins are categorized in several different ways. In fact, some are categorized in more than one way. Due to cryptocurrency’s relative novel, the categories are constantly evolving.
Here are some of the most common classifications for altcoins:
|Tether||USDT||Tether (₮) is a stablecoin backed by fiat currencies. Tether is pegged primarily to the US Dollar (ticker symbol USDT). Tether USD (USDT) emerged as the first stablecoin on the global crypto markets, becoming the first dollar-backed stable digital currency.To put it simply, Tether USDT is a digital dollar. Tether was founded by Brock Pierce, Craig Sellars, and Reeve Collins in July 2014.Tether is a decentralised digital currency that operates on multiple blockchains, but Hong Kong-based company Tether Ltd, owned by iFinex, is responsible for creating and redeeming USDT, as well as for maintaining its fiat currency deposit backing.1 USDT is valued exactly equal to the US $1|
|Binance Coin||BNB||Binance Coin (BNB) is a cryptocurrency that is used primarily to pay transaction and trading fees on the Binance exchange. Initially, BNB was based on the Ethereum network, but is now a native currency of Binance’s own blockchain, called the Binance chain. The Binance Coin was launched in July 2017 via an initial coin offering (ICO). As part of the ICO, BNB tokens were distributed to various participants, including angel investors and the Binance founding team. Binance uses 20% of its profits every quarter to buy back and burn Binance Coins, completely destroying them. Binance will continue quarterly burns until it buys back and destroys 100 million Binance coins – 50% of the total supply. In this way, Binance Coin’s supply remains finite, which makes it scarce and valuable.|
|USD Coin||USDC||USD Coin (USDC) is a digital stablecoin that is pegged to the United States dollar.USD Coin is built and managed by the Centre consortium, a partnership between Circle and Coinbase.USDC is an ERC-20 utility token compliant with the Ethereum network that is pegged 1:1 to the US dollar. The total supply of USDC is uncapped. When you buy a USD Coin with fiat currency, that fiat currency is deposited and stored as one U.S. dollar, and a new USDC is created. If you sell a USD Coin in exchange for fiat currency, then the USDC is “burned” when the fiat money is transferred back to your bank account.|
|XRP||XRP||XRP is a digital asset that’s native to the XRP Ledger blockchain. Ripple is the company behind XRP, and it’s a payment settlement system and currency exchange network that can process transactions globally.XRP and its underlying blockchain are designed specifically to support the payments use case. There is a finite amount of XRP. All XRP is already in existence today—no more than the original 100 billion can be created. The transaction of XRP is faster and cheaper than bitcoin|
|Cardano||ADA||ADA is the cryptocurrency for the Cardano platform. Cardano’s coin is named after Ada Lovelace, a 19th-century mathematician known as the first computer programmer. People use ADA tokens to pay transaction fees for using the platform. it uses a proof-of-stake protocol to validate transactions, which is more energy-efficient than proof of work. There is a maximum supply of 45 billion ADADue to its relatively low energy consumption, Cardano is known as a green blockchain.|
|Terra||LUNA||LUNA is a governance and staking token that fuels the whole Terra network. It supports Terra’s stablecoins and payment processing systems.LUNA is used as part of Terra network validator staking via its Proof-of-Stake (PoS) consensus mechanism.|
|Solana||SOL||Solana is a blockchain platform designed to host decentralized, scalable applications. Solana is a proof-of-stake cryptocurrency with smart contract capabilities including DeFi dApps and NFTs.Solana boasts a theoretical throughput of 65,000 transactions a second with near zero fees. The boom in the DeFi and NFT spaces have pushed fees on Ethereum extremely high causing crypto users to seek other options like Solana. Solana has been at the center of controversy in the crypto industry as skeptics claim its transaction speed are only possible because the chain has sacrificed decentralization. Solana can process many more transactions per second and charges much lower transaction fees than rival blockchains like Ethereum. Solana’s native cryptocurrency, which has the ticker SOL, has a market capitalization of over $66 billion, making it the fifth-largest cryptocurrency. Solana is a proof-of-stake (PoS) blockchain and also uses a new technology called Proof of History (PoH).|
|Avalanche||AVAX||AVAX is the native token of Avalanche, which is a proof-of-stake blockchain The maximum supply of AVAX is capped at 720 million tokensThe AVAX deflationary token mechanism relies on compounding the value obtained from staking on the platform. Simultaneously, the AVAX coin used for paying transaction fees goes away from the supply, thereby reducing the circulating supply of AVAX tokens permanently.|
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