Cryptocurrencies

How many cryptocurrencies are there?

How many cryptocurrencies are there?

There are now over 12,000 cryptocurrencies, and what is truly amazing is the growth rate. The number of cryptocurrencies more than doubled from 2021 to 2022. By the end of 2021, the market was adding around 1,000 new cryptocurrencies every month.

This is not entirely good news. Many new cryptocurrencies have no purpose other than to make money for their developers, which means investors need to be selective. Only a small part of cryptocurrencies is worth studying and potentially buying.

Why has the number of cryptocurrencies increased so rapidly? We will answer them and cover the most important and influential cryptocurrencies below.

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Cryptocurrency

The description

Bitcoin (CRYPTO: BTC)

The first and largest cryptocurrency by market capitalization.

Ethereum (CRYPTO:ETH)

The cryptocurrency with the first programmable blockchain that developers can use to create decentralized applications (dApps).

Attached (CRYPTO:USDT)

A stablecoin that trails the US dollar and the cryptocurrency with the highest trading volume.

gimbal (CRYPTO:ADA)

A research-based cryptocurrency that is more environmentally friendly due to its lower power consumption.

Binance Coin (CRYPTO: BNB)

The native Binance Smart Chain cryptocurrency, which was built by the popular Binance exchange.

XRP (CRYPTO:XRP)

Ripple’s native cryptocurrency and the subject of an SEC lawsuit alleging it is an unregistered security.

Peas (CRYPTO: DOT)

A cryptocurrency designed to allow different blockchains to communicate and work with each other.

Solana (CRYPTO:SOL)

A cryptocurrency with a high-performance blockchain capable of processing ultra-fast and inexpensive transactions.

Dogecoin (CRYPTO: DOGE)

The first memecoin to gain popularity.

Monero (CRYPTO:XMR)

A donation-based cryptocurrency that aims to provide complete privacy through untraceable transactions.

Source: Author.

Why are there so many different cryptocurrencies?

The main reason why there are so many different cryptocurrencies is that there are virtually no barriers to entry. Anyone who wants to create a cryptocurrency can do so. Even if you don’t have any technical know-how, you could hire someone on Fiverr (NYSE: FVRR) make a cryptocurrency for less than $20.

It has not always been so. In the beginning, there was only Bitcoin. Then the developers started creating altcoins. An altcoin is a cryptocurrency other than Bitcoin. Most early altcoins were intended to improve Bitcoin’s performance or serve other purposes.

Most successful cryptocurrencies always have a purpose or objective. Developers create cryptocurrencies in hopes of using blockchain technology to solve a real-world problem.

Ever since it became extremely easy to create cryptocurrency, the amount of money in crypto has attracted people trying to make a quick buck. If you look at the charts of recently launched cryptocurrencies, you will see many like this, with some form of “Elon”, “Shib” or “Doge” in the name.

If you’re looking for a good cryptocurrency investment, or just want to know about some notable projects, here are the cryptocurrencies that have had the biggest impact.

Bitcoin

Bitcoin was the world’s first cryptocurrency. An anonymous founder named Satoshi Nakamoto launched Bitcoin in 2009. It was designed to be a decentralized digital currency that did not rely on banks or financial institutions.

Newer cryptocurrencies are more technologically advanced and offer much more efficient transactions, so Bitcoin is now primarily used as a store of value. It enjoyed a significant first-mover advantage since it is by far the most well-known and valuable cryptocurrency.

Ethereum

Ethereum introduced the idea of ​​an open-source programmable blockchain. Developers can leverage the Ethereum blockchain to create their own cryptocurrency tokens and decentralized applications (dApps). This has led to the creation of decentralized finance (DeFi) – platforms that offer decentralized versions of traditional financial services.

Although there are now more cryptocurrencies with programmable blockchains, Ethereum started it all. Its early development helped it establish itself as the second largest cryptocurrency.

Attached

Tether is the largest stablecoin, which is a type of cryptocurrency designed to track the value of another asset. In the case of Tether, it aims to follow the value of the US dollar, which means that one Tether normally has a value of $1.

This cryptocurrency is not without controversy. The company behind it, Tether Limited, lied about its reservations by falsely claiming that each Tether was backed by a US dollar. Despite this and other issues, Tether is generally the cryptocurrency with the highest volume of daily transactions.

gimbal

Cardano is an open-source blockchain platform created by one of Ethereum’s co-founders. It aims to solve a wide range of problems, including making financial services and identity records accessible to everyone. Cardano’s development is based on peer-reviewed research, so it tends to move slower than other projects.

It was one of the first major cryptocurrencies to use proof of stake to verify transactions. It is a more energy efficient alternative to proof of work, which is used by Bitcoin and many other major cryptos.

Binance Coin

Binance Coin is the native cryptocurrency of the Binance Smart Chain. This blockchain platform was created by Binance, one of the most popular crypto exchanges in the world. It has quickly become a popular alternative to Ethereum due to its significantly cheaper gas (transaction) fees.

Gas fees on the Binance Smart Chain are paid in Binance Coin, so you must have it to use this blockchain. The Binance exchange also offers trading fee discounts for customers who own Binance Coin.

XRP

XRP is the native cryptocurrency of Ripple, a payment protocol designed for fast and inexpensive transactions. It is specifically aimed at international money transfers, and hundreds of financial institutions have partnered with Ripple to use its technology.

Ripple is known to be involved in a lawsuit with the SEC. At the end of 2020, the SEC alleged that Ripple had sold unregistered securities in the form of XRP. Although Ripple has denied the allegations, many top crypto exchanges have stopped offering XRP trading in response.

Peas

Polkadot is a platform that aims to expand interoperability between blockchains. Blockchains that connect to Polkadot are capable of transferring any type of data or asset between them.

Although Polkadot has similarities to Ethereum in that it is a programmable blockchain, it goes even further. Developers can create their own custom blockchains on Polkadot. It also enables parachains, which are parallel blockchains working together and each having their own specific uses.

Solana

Solana is a blockchain platform designed for speed and efficiency. It routinely processes thousands of transactions per second and is capable of handling 65,000 transactions per second. The average cost per transaction is well under a penny.

While Solana uses proof of stake to validate transactions, it has also introduced a new method called proof of history. The method creates a historical record of when transactions took place, and this is one of the keys to Solana’s fast performance.

Dogecoin

Dogecoin is a cryptocurrency based on the Doge meme. The creators of the coin launched it in 2013 to poke fun at crypto price speculation. It is widely considered the first memecoin, and it has spawned many imitators over the years.

Even though Dogecoin has no competitive advantage or unique use case, it has managed to become one of the most popular cryptocurrencies. Dogecoin and the memecoins that followed it are proof of just how big the hype is in the crypto market.

Monero

Monero is a cryptocurrency that uses privacy-enhancing technologies for transactions. This makes transactions anonymous and untraceable. Most cryptocurrencies have public blockchains that provide all transaction data, but with Monero observers cannot see any of this information.

This has made Monero extremely popular among privacy-conscious crypto enthusiasts, but it can also be used for criminal activities such as money laundering and tax evasion. The IRS has offered large bounties to anyone who can crack Monero.

Why are cryptocurrencies important?

Cryptocurrencies enhance aspects of traditional fiat currency. They do not need the support of a federal government and they process the transactions entirely on their own, without financial institutions. By using cryptocurrency, people across the world can transfer funds quickly, inexpensively, and without any payment service.

Although the original purpose of cryptocurrency was to replace traditional currency, that is no longer the only use. Developers are continually finding new ways to use cryptocurrencies and blockchain technology to solve real-world problems.

With so many cryptocurrencies available, it can be difficult to know where to invest. It is important to carefully research any cryptocurrency you are considering buying. When in doubt, cryptocurrency stocks and larger coins tend to be the safest investment options.