Cryptocurrency – a term that we all are well aware of. Talking about the whole subject of cryptocurrency, Bitcoin always strikes one’s attention. Bitcoin was the first decentralized digital currency to be introduced in the digital asset market. Digital coins other than bitcoin are often referred to as ‘altcoins’.
When you go to count, there is a total of 10,720 altcoins, maybe more. And the present craze about digital assets demands everyone to learn about the major cryptocurrencies. Some of the most popular crypto coins include Tether, Ethereum, USD, BNB, etc. Stablecoins that are gaining popularity in the market include USDT or DAI.
In this article, we shall have a look at the three different types of cryptocurrencies functioning in 2023 and further.
Bitcoin – the Digital Gold & Future of Decentralized
Bitcoin got introduced in the market as a payment system. Users use the crypto coin to transfer value directly from one party to another. What makes this digital coin so well-liked is its functionality without any intermediary.
Today, Bitcoin is being used for international savings or transfers. This is the reason why it’s often termed digital gold. Moreover, owing to its ‘proof-of-work’ procedure, Bitcoin relies on a computational network to cross-verify Bitcoin mining.
Bitcoin is a secure digital asset – all thanks to its mining network. The network protocol suggests that the total number of Bitcoin mined to date is 21 million. An important usefulness attached to PoW (Proof of Work), i.e., securing the public record & saving the network from any spam.
Now, talking about the most important aspect related to Bitcoin, i.e., its pricing. BTC’s price is fixed by supply and demand dynamics. No third-party organization or group of Bitcoin miners has a say in Bitcoin pricing. And that’s why this cryptocurrency is viewed as the most decentralized cryptocurrency in 2023.
Stablecoins – Averts Market Volatility
Stablecoins are a type of cryptocurrency whose value is tied to another currency, commodity, or asset. The market of cryptocurrency is volatile. And due to this volatile nature, stablecoins offer (relative) stability. The value of Stablecoin is issued on behalf of Tether.
If you are to understand what’s stablecoin – they are simply tokens that crypto-exchanges prices beforehand. The value set by these stablecoins can be a USDT token or a U.S. dollar. For investment and trading check bitcoin profit, either in Stablecoins or any other type of cryptocurrency.
The various types of stablecoin models functioning in the crypto market include algorithmic stablecoins and fiat-collateralized stablecoins. The former is supported by the Ethereum network and the latter is supported by Coinbase and Circle. Today, stablecoins are used for crypto exchange because these coins are not as decentralized as Bitcoin. You will find very few numbers of active users who prefer using Stablecoins for peer-to-peer transactions or savings.
Talking about the most popular stablecoins in 2023, it’s USD-denominated liquid reserves. This stablecoin is not decentralized as Bitcoin. And the reason why this coin is popular among users is the ever-increasing demand for USD-denominated products. Turkey, Lebanon, South Africa, Nigeria, and Kenya are the countries that prefer using stablecoins. We could credit inflation with the increase in the usage of stablecoins in these countries.
Altcoins – Increased Business Opportunities
Bitcoin’s advancement in usage and popularity in the market convinced blockchain developers to create a multitude of cryptocurrencies. And the most favored altcoin is Ether. For those who don’t have an idea about Ether, it’s the native token from the Ethereum network.
Some of the most frequently used altcoins in the market include dogecoin – a meme coin. This altcoin is, to date, being used by crypto enthusiasts for business purposes, leading to an enhanced influence on the overall crypto market. Not to forget to mention, altcoins’ liquidity is always increasing over the crypto exchange platforms.
Recently, Ethereum’s merge from the PoW model to the PoS model was successful. Founded in 2014, Ethereum is a successful altcoin project to witness impressive growth. Today, hundreds of organizations and crypto enthusiasts seem interested to participate in the Ethereum ecosystem. Why? Because there are lots of opportunities here, such as business, trading, arbitrage, issuing startup equity, & managing real-world assets/commodities.
However, even after this much, Altcoins are considered ordinary. Why? Because of the fluctuations in its demand. A huge fraction of altcoins’ demand in the crypto market is based on the organization or individuals who have launched the token. But, we can equally not deny the fact that Ethereum instilled an attitude of trading with dozens of altcoin networks.
So, by now, you must have learned the 3 different categories of cryptocurrencies. You should keep the things explained in the article in your memory. This will help you use cryptocurrency for international transactions, business purposes in the traditional markets, or participating in trading and startup opportunities. Looking for a secure Crypto trading platform check Bitcoin smart