The Main Categories of Cryptocurrencies Today Can Be Classified as Bitcoins, Stablecoins, Privacy Coins, Platform Tokens, Utility Tokens...

Do you remember when you had that piggy bank hidden somewhere in your bedroom and how excited you became as you received some change? A decade later the piggy bank became a savings account to pay for your college tuition. Finally years later your savings account was exchanged for a bank account. Today, in the post-apocalyptic era we have Crypto coins, that some elder might find them creepy coins. But in reality this new modality of financial assets are here to stay. Humanity will be cashless and it will be happy. How many times you have lost money because some cashier didn’t have the exact change to give back to you? Well, many can relate to that. Here we bring the main categories of crypto currencies today along with their use.

Bitcoin (BTC) and Altcoins: Bitcoin, the first and most well-known cryptocurrency, falls under this category. Altcoins, or alternative cryptocurrencies, refer to all other digital currencies that emerged after Bitcoin. Examples of altcoins include Ethereum (ETH), Ripple (XRP), Litecoin (LTC), and many others. These cryptocurrencies often offer variations in their underlying technology, features, and use cases compared to Bitcoin.

Stablecoins: Stablecoins are a type of cryptocurrency designed to maintain a stable value by pegging it to a specific asset or currency, such as the U.S. dollar (USD) or gold. Stablecoins aim to provide stability and reduce volatility, making them suitable for various use cases, such as facilitating transactions or acting as a store of value. Examples of stablecoins include Tether (USDT), USD Coin (USDC), and Dai (DAI).

Privacy Coins: Privacy coins focus on enhancing privacy and anonymity in transactions. They incorporate features that obfuscate transaction details, making it difficult to trace and identify the parties involved. Examples of privacy coins include Monero (XMR), Zcash (ZEC), and Dash (DASH).

Platform Tokens: These cryptocurrencies are built on blockchain platforms that enable the development of decentralized applications (DApps) and smart contracts. Ethereum, with its native token Ether (ETH), is the most prominent example of a platform token. Other examples include Binance Coin (BNB) on the Binance Smart Chain and Cardano (ADA) on the Cardano platform.

Utility Tokens: Utility tokens serve a specific purpose within a blockchain ecosystem or platform. They are used to access certain features, services, or products offered by a project or network. For example, Basic Attention Token (BAT) is used within the Brave browser ecosystem for digital advertising and content monetization.

Security Tokens: Security tokens represent ownership of real-world assets, such as shares in a company, real estate, or other financial instruments. They aim to digitize and tokenize traditional assets, providing fractional ownership and potential liquidity. Security tokens are subject to regulatory compliance and offer investors the benefits of blockchain technology. However, they often require adherence to securities laws and regulations.

These categories highlight the diversity and range of cryptocurrencies available in today's market. Each category serves different purposes and offers unique features, catering to various use cases and investor preferences. It's essential to conduct thorough research and understand the specific characteristics and risks associated with each cryptocurrency before engaging in transactions or investments.

?Written by Georgia P. Rodrigues 27/06/2023 at 10:55PM