Getting to Know the Different Types of Cryptocurrency
Cryptocurrency has been dominating the market since 2009. One cryptocurrency, say Bitcoin, is now valued at over $40,000 and counting! If you are new to the cryptocurrency world, the terms and crypto jargon can be a tad bit confusing. Remember that there are over 2,000 cryptocurrency digital assets. Luckily, you can group them according to similarities. In addition, fortunately for you, this article focuses on the different types of cryptocurrency to add to your cryptocurrency knowledge bank.
Payment currency is the first type of cryptocurrency on our list because it is one of the most common types of digital assets out there. As the name suggests, payment currency is typically used to pay for goods and services. You can use cryptocurrency to pay your bills or cash it out for actual dollars. Some parts of the world accept cryptocurrency as a payment option, while other countries like India are pushing for legislation to ban cryptocurrency as payment options. Cryptocurrencies like Bitcoin, Litecoin, and Bitcoin cash are more famous payment currencies.
Blockchain economies are the very foundation of how cryptocurrency works. But unlike payment currencies, blockchain economies take it one notch further. Blockchain economies allow their users to create their own digital currencies (also called tokens) and decentralized applications on their platforms. This means that blockchain economies create their own type of economies – including their own application, assets, and more. Popular Blockchain economies that you might have heard of are Ethereum, Ethereum Classic, NEO, and Tron.
Some cryptocurrency digital assets focused on privacy – hence privacy coins were invented. Only the sender and receiver know how many coins have gone through the transaction in these types of transactions. In addition, only the wallet owner knows the balance of the Privacy Coin wallet address. This is different from other digital currencies like Bitcoin because these transactions show transaction amounts and wallet addresses for each transaction. Popular privacy coins crypto assets include Zcash, Monero, and PIVX.
Utility tokens work differently because they are part of the blockchain economy. They are digital tokens that can be used for any blockchain-based product or service. Most utility tokens, like the ERC20 tokens, are coming from the Ethereum blockchains, but there are types of utility tokens out there like TRC10 and TRC20.
An example of a Utility Token is the Golem, where its users can pay these tokens to rent computing power for tasks that are memory intensive. Other popular utility tokens that you may be familiar with are the Basic Attention Token (BAT), Civic (CVC), OmiseGo (OMG), and 0x (ZRX).
Stable coins are very popular among traders because of other types of digital assets. Stable coins aim to have a stable value in the crypto market. If an investor thinks that a crypto asset will lose value soon, they can trade this for a stable coin to prevent any losses. The USD Coin, Paxos, Gemini, TrueUSD, Tether, and Dai are examples of stable coins.