There are more than 7,700 different cryptocurrencies on the cryptocurrency market. So how do you find the right cryptocurrencies? Let me tell you in his blog about cryptocurrencies.
Currently, there are over 7,700 different cryptocurrencies on the cryptocurrency market, all different but still somewhat similar. So how should you navigate this cryptocurrency and find the right cryptocurrencies for yourself? No worries, this post will take a closer look at the different currencies!
Bitcoin – the king of cryptocurrencies
Bitcoin (BTC, ₿) is the best known and most widely used cryptocurrency currency, operating primarily as a trading currency. Bitcoin is the first decentralized cryptocurrency to bring blockchain technology to people’s consciousness. Blockchain technology allows cryptocurrencies to be sent and received without a third party over a P2P peer-to-peer network. Blockchain technology allows the cryptocurrency holder to be responsible for his transactions *. This gives the holder full financial freedom.
The idea behind the development of Bitcoin is to remove unnecessary intermediaries from money creation, management, and transfers, and to reduce corruption by making transactions public, auditable, and verifiable.
In addition to their names, traditional currencies have their abbreviations, such as the euro abbreviation EUR and the € symbol. The same policy is used when identifying cryptocurrencies. The abbreviation for Bitcoin is BTC. Bitcoin is also identified by the ₿ symbol. Bitcoin is divided into 100 million parts, Yarrow, which is Bitcoin’s unit of account.
There are a total of 21 million bitcoins, and there are no plans to increase their number. Bitcoin’s fixed limit of 21 million units gives it anti-inflationary features, such as its inability to be manipulated or undermined by the issuance of more Bitcoins. In this way, confidence in Bitcoin is maintained. In the traditional Fiat monetary economy, the issuance of new money is a familiar phenomenon. Central banks issue more money to maintain a steady decline in the value of money, that is, inflation.
Cryptocurrencies can be acquired either by buying or mining. Bitcoin’s mining mechanism is the Proof-of-Work protocol, which uses the computing power of a computer for mining. About every ten minutes, new blocks are generated that the miners solve. Miners will receive a block reward when they find a new block suitable as an extension of the chain. This reward system changes about every four years: the amount of the block reward is halved. This will ensure that a total of no more than 21 million Bitcoins are generated. Currently, the block fee is 6.25 BTC per block. The next time Bitcoin’s reward system changes are in 2024, when the block fee will be halved to 3.115 BTC per block, making mining even more difficult. The block premium received from a block is very important for miners. It encourages them to mine and participates in strengthening transfers, as well as mobilize Bitcoins that we can buy and use!
Bitcoin is undeniably the king of cryptocurrencies, and not just because it was the first decentralized cryptocurrency. Everything that Bitcoin consists of makes it a nobility of cryptocurrencies: its autonomy, visibility, the immutability of transactions, limited supply, availability and increased acceptance of currency, ease of use, and low fees are just some of the features that make it attractive!
Altcoin – alternative cryptocurrencies
Altcoins are simply all other cryptocurrencies. The success of Bitcoin paved the way for new cryptocurrencies, the most popular of which have remained Ethereum (ETH) and Litecoin (LTC). The cryptographic market is notoriously volatile and many altcoins have come and gone, but the two presented below have stubbornly stayed on track.
Ethereum smart contract platform
The Ethereum (ETH) is the most popular cryptocurrency after Bitcoin. It mainly serves as a smart contract platform. The Ethereum platform can be used to build distributed applications or dApps, and to make intelligent contracts based on Ethereum’s blockchain. Ethereum’s blockchain differs from Bitcoin’s blockchain in that Ethereum’s blockchain blocks have a copy of both the transaction lists and their status. The Bitcoin blockchain contains only copies of transaction lists.
The letter abbreviation for Ethereum is ETH, and its unit of calculation is gwei. One Ethereum is divided into a billion gwis. The number of Ethereum is not limited, as is Bitcoin. On the other hand, the annual mining volume of Ethereum is limited: a maximum of 18 million can be mined per year.
Etherum’s mining mechanism is currently the PoW protocol, but it is being changed to another, Proof of Stake (PoS) protocol shortly. There are no miners in the PoS protocol, but amplifiers. Amplifiers are given the right to resolve the block depending on their contribution to the peer-to-peer network. This means that reinforcers “pledge” a certain amount of Ethereum into the network, which encourages the confirmation of the correct transactions. If the validator confirms the wrong transaction, he loses his bet on the peer-to-peer network. There is currently a reward of about 2 ETH per block for strengthening a block. New blocks are generated every 13 seconds!
The previously mentioned decentralized applications, i.e. dApps and smart contracts, are Ethereum’s largest uses in addition to the trading currency. dApps are distributed applications whose source code is running on a distributed P2P peer-to-peer network. Standard applications run on centralized servers.
Intelligent contracts, on the other hand, are automatically enforceable contracts based on a code with predefined terms. Once the predefined conditions are met, these smart contracts are self-fulfilling without third parties, making them completely independent. Ethereum’s ability to act not only as a trading currency but also as a smart contract and dApp platform have made it attractive among thousands of others!
Litecoin – Bitcoin’s little brother
Litecoin (LTC, Ł) is very often thought of like Bitcoin’s little brother, as it is very similar to Bitcoin. Litecoin is also divided into 100 million parts, litos. Litecoin’s offering is limited to 84 million units, which means there may be four times as many as Bitcoins. The PoW protocol also acts as an extraction mechanism, and the generation time of the block is 2.5 minutes, which is four times faster than in Bitcoin. The reward for mining is 12 LTC per block, and the reward for the reward system is halved every four years.
So Litecoin is very similar to Bitcoin, and that’s why “little brother” is a great name for it. Litecoin has been one of the more popular cryptocurrencies, although it has not gained Bitcoin’s popularity. However, Litecoin is a great trading currency.
What about other currencies?
There are over 7,700 cryptocurrencies, as mentioned earlier, and can be found for every output. The cryptocurrencies presented above are the most well-known cryptocurrencies but by no means the only ones! Before you start your crypto pickup, remember DYOR – do your research! It is good to remember that cryptocurrencies are a very new phenomenon in our economy and therefore we need to have a thorough understanding of where you are investing.
Cryptocurrencies have many different uses and applications, are volatile, and do not provide a stable or predictable return. But after thorough research, you can see in them much more opportunities than uncertainty or risks!
- Note! Acting as a holder of cryptocurrencies means that you have the private key that entitles you to access your cryptocurrencies. If you use another service, such as a cryptocurrency trading venue, to store and trade cryptocurrencies, you do not have the secret keys to your cryptocurrencies, but trust that the service provider will take care of your coins!