While Bitcoin is, in fact, dropping in price, the number of cryptocurrency investors is increasing quickly. This is for many reasons, one of which is the fact that there are different types of cryptocurrency to satisfy a variety of investor needs.
Coins like Bitcoin are seen as an alternative to Fiat currency. Meanwhile, there are alternatives that allow users to make long-term investments with high APYs and exclusive voting systems for loyal buyers.
Crypto has been seen as a mixed bag for many, but it’s clear that the future of blockchain technology has a ton of unique benefits in store for investors. If you want to learn a bit more about the different types of cryptocurrency, consider reading ahead.
Different Types of Cryptocurrency
Bitcoin is just one of many cryptocurrencies. It has direct competitors like Ethereum and Litecoin, but the scope of crypto is much wider. Altcoins, stablecoins, and de-fi cryptos are just a few alternatives. The primary three examples, though, include tokens, coins, and altcoins. Here’s a brief look at the three.
Coins are blockchain assets used primarily as a type of currency. These live on their own independent blockchain, making it impossible for bad actors to tamper with the system. It’s important to mention the fact that each coin has a unique ecosystem. Bitcoin differs greatly from Ethereum, for example. Ethereum has a more versatile use case, and many users work with smart contracts to create unique use cases on the chain.
Still, though, these are considered payment methods in most situations. Coins are unique, in another way, thanks to their availability via ATMs. Users can access the Byte Federals Map to find ATMs for crypto deposits and withdrawals.
Altcoins are just any coin that isn’t Bitcoin or one of the other popular coins. The most well-known example is Dogecoin, but there are many, many others. While these are typically used as currency, as well, quite a few offer other use cases.
Some altcoins include:
Altcoins are considered a cryptocurrency for beginners. At least when newcomers invest a very small amount when they get started.
Tokens also live on the blockchain, but they have very different functions. They’re digital assets that are non-native. The most popular example of tokens involves non-fungible tokens, one of the most popular crypto investments.
Tokens rely heavily on buyers for value. However, one trait that provides innate value is the fact that it’s impossible to modify them once they’re on the chain. NFTs, though, are simply short lines of code on a chain that links to an image. The images are typically stored on an IPFS, but no one can guarantee that they’ll stay up. You can also stake them for transactional rewards. For example, with Polymesh staking, you stake your tokens and receive not only the same value back after the allotted time has passed, but in the meantime receive rewards for when your staked tokens are used to validate another transaction on the blockchain.
Investing in Cryptocurrency
Before investing in the different types of cryptocurrency, it’s important to highlight the features that each one provides. There is a plethora of options, and the variety is only growing with time. The primary picks include coins, altcoins, and tokens.
Many consider that it’s smart to start with more popular coins, as they tend to be less volatile. However, price fluctuations are impossible to avoid, making tokens an attractive option for long-term buyers. Hopefully, this article provided you with some useful information regarding crypto technology. If it did, consider taking a look at some of the other posts on the site.