What Are the Cryptocurrencies?

Bydawn

What Are the Cryptocurrencies?

Cryptocurrencies provide a secure means of transacting value without needing an intermediary such as a bank or payment processor, enabling people from opposite ends of the world to transact money or other assets almost instantaneously at low costs.

Bitcoin was the pioneer and remains the largest in terms of market capitalization, but thousands more cryptocurrencies have since emerged – many similar to its original design while others use different technologies or offer additional features that expand their utility.

Below is a list of the top 10 cryptocurrencies by market capital. Each has their own website where you can learn more and buy or sell. Furthermore, these coins can also be traded through exchanges where they are listed for sale for USD.

Most cryptocurrencies were designed to address specific problems or act as an alternative currency, with those having a clearly-stated purpose proving most successful at drawing developers and investors to them.

Cryptocurrencies can be divided into two broad categories: coins and tokens. Coins are intended for payments, transmitting value across a decentralized network of users similar to digital money such as Bitcoin, Litecoin or Dogecoin – examples include these currencies being mined with each coin having an assigned limited supply thus creating natural deflationary effects.

Tokens operate on blockchain and can represent ownership or rights to an asset. They serve as the main building blocks for many decentralized applications (dApps) and initial coin offerings (ICOs), including Ethereum’s native token, Ether. Ether can be used to pay validators who verify transactions on Ethereum as well as for off-chain use – speculators also frequently trade Ether due to its price volatility.

There are also a handful of “stablecoins”, or cryptocurrencies designed to maintain their value relative to another currency or reference point and reduce volatility. Tether, which is backed by the U.S. dollar, has been controversial due to allegations its parent company falsified reserves data.

Exchange tokens allow traders to trade on specific platforms, such as exchanges, crowdfunding platforms or betting sites. There are also security tokens issued by companies and which represent ownership or other rights associated with an asset; these security tokens may also be sold during ICOs as funding mechanisms for projects or investments; however they are generally not considered investments by financial regulators and thus more vulnerable to hacking or theft; it is important that you fully understand any associated risks prior to investing.

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