From the time man evolved currency, it became an essential part of our lives. cryptocurrency is almost similar to the digital currency, just that it does not have Physical embodiment. Also, it utilizes the Cryptography to accomplish its work.
Some characteristics of Cryptocurrency are that the limit which determines how many units can exit with Bitcoin. This limit exists at twenty-one million; there will be no more Bitcoins after this. You can quickly transfer the funds by using Cryptocurrencies. The operations of a cryptocurrency are independent which means it is decentralized and does not have any central authority.
Types of Cryptocurrencies
If you are new to the world of Digital Assets when you think of Crypto, then bitcoin is the first that pops into your mind. In contrast, Bitcoin boasts a Trillion-dollar market capitalization and is backed by twenty-two Public Companies.
Earlier, people used to invest a lot in gold, but now they invest more in cryptocurrencies like Bitcoin, which is more efficient and secure; however, to become a successful Bitcoin Trader, one must have the skills and sound knowledge about Bitcoin how the market works. There is software that has been designed called Bitcoin Era, which is used for auto trading; with the help of this software, people can trade cryptocurrencies manually or automatically; this software is also called a legitimate Robot for Automatic Trading.
Other than Bitcoin, all the Cryptocurrencies that are Altcoin, for example, Ethereum, Lite coin, Stellar, Tether, Dogecoin, Shiba Inu, etc.
While Cryptocurrencies have been there for a long time, their volatility kept many potential Crypto participants away from the Crypto markets until Stablecoins came onto the scene. As of May 2021, the market cap of Stablecoins has touched a hundred Billion dollars.
Stablecoins have long been a vital part of the Cryptocurrency Economy. For various years now, many companies are trying to add Stablecoins as one of the payment options for people who are not aware of crypto.
Stablecoins is a Cryptocurrency that attempts to peg its value to another asset like fiat currencies, commodities, and Cryptocurrencies. The purpose of creating Stablecoins is to keep its value the same as fiat currencies. For example, keeping the security, speed, and low cost of digital transactions the same. The First Stablecoin BITUSD was launched in 2014; Charles Hoskinson and Dan Larimer created it.
- Best Stablecoins in the market
- Binance USD
- USD Coin
You can use this particular token in very different functions and applications. Further, token mainly divided into three parts
- Utility Token
By using Blockchain Technology, we can make Decentralized Applications; those Applications are a bit different from the Applications that we use daily that is Centralized. For those Decentralized applications, we have a different Currency; if we want to buy or sell anything on that particular app, we use a Utility token.
For Example, Ethereum is a Blockchain Platform, and the Cryptocurrency or virtual token of Ethereum is Ether.
- Asset Token
It is a token whose value gets the backing of a tangible asset like paintings, Arts, Real estate, etc. further, Blockchain technology will store all of the data about the properties, like when someone buys or sells real estate or buys or sells paintings.
If we buy or sell any property, then we have the property papers, but in the case of Asset tokens, if we buy some Property or Asset, we get Asset tokens for that particular Property.
- Security Token
The security token, also, you can call it is Equity tokens. Further, the Functionalities of these Equity tokens are pretty similar to Equity shares. If some company wants to sell a company percentage, then the company can issue the Security token or Equity token.
The process for issuing the Security coin is an Initial Coin offering, and whoever buys that Equity token gets the ownership and rights of that particular share of the company.
The only difference between Equity shares and Equity Tokens is that Equity shares are operating on Centralized Authority. There is no such rule; they are all in Decentralized Manner.
So, there are overall, forty thousand Plus Cryptocurrencies available in the market. It depends on every individual in which Cryptocurrency they want to invest by understating all the risk factors.