Cryptocurrency is now a trend in the financial sector, occupying the digital wallets of a fast-growing list of merchants and traders. The most popular type of cryptocurrency is Bitcoin. Even though it might be leading the crypto market, there is a tsunami of other cryptocurrencies, that you may not know they exist. What are the different types of Cryptocurrency then? Keep on reading to get your question answered!
If you are not sure what Cryptocurrency is, or what benefits and risks it carries along with it, make sure you check out our previous blog post to learn everything you need to know about it.
As seen in the “What is Cryptocurrency” article, cryptocurrencies are not regulated by the government like fiat money is, and therefore, they are considered as a high-risk type of asset. For this reason, Crypto Merchants struggle with finding a bank to register an account with. With WireWallet, this not a problem anymore! WireWallet stands by these companies’ side by providing them IBANs to invoice their clients, receive payments and easily complete transactions between their PSPs and affiliates.
Types of Cryptocurrency
Today, there are thousands of cryptocurrencies in existence with hundreds of billions of dollars in total market capitalization. Beyond that, the number of existing cryptocurrencies is increasing very quickly; a new digital coin may be released tomorrow!
The most popular types of cryptocurrencies are…
Released in late 2008, Bitcoin was the very first released Cryptocurrency. It was invented by a person (or group of people) using the name Satoshi Nakamoto. However, the founder’s identity remains unknown.
Bitcoin is a decentralized (aka bank-free) digital-only currency that can be bought or exchanged from user to user, using a peer-to-peer network. Transactions are accomplished by network nodes using cryptography and are recorded in a blockchain. Crypto traders can exchange bitcoins for different currencies, either from crypto merchants or other crypto traders. They can even buy products or services, using Bitcoin as their preferred paying method! Bitcoin’s value is unsteady. People who invest in it can make or lose large amounts of money, since its value keeps changing rapidly. Back in 2010, Bitcoin’s value hasn’t reached 1 EUR! Ten years later its price has reached a very high amount, around 9,968 EUR! Yes, you read it correctly. Bitcoin’s value fluctuations are a very often phenomenon; they happen every day!
Ethereum is a decentralized open-source software platform that allows its users to create and run smart contracts and decentralized applications without any intervention or control from third parties, such as Apple. This technology was launched in July of 2015, by Vitalik Buterin and Gavin Wood. To easily remember the difference between Ethereum and Bitcoin, you can think of Ethereum as an application store. Anyone can have access to this software, as long as he/she is connected to the internet. The currency used in Ethereum is called Ether. It is used as a token by app developers to run applications inside Ethereum, or by people who want to exchange Ether with different currencies. Regarding its value, 1ETH is equal to 348.43 EUR (August 2020).
Originally released in 2012, Ripple is a network that enables real-time, direct and low-cost international payments. Unlike Bitcoin and Ethereum, Ripple is not a blockchain-based technology. Only banks and individuals that use the Ripple network can validate transactions. Ripple mainly refers to businesses and to the banking industry rather than individuals – companies that move larger amounts of money. It enables instant transfer and exchange of any type of currency between two peers; dollars to bitcoin, euros to dollars… anything! Ripple’s value back in 2017, was as tiny as 0.0055 EUR. Until the end of that year, its worth increased and exceeded the 1 EUR!
This open-source and community driven cross-platform leverages the benefits of blockchain technology to create a “smart economy”. It was founded in 2014 by Da HongFei and Erik Zhang with the name AntShares, and in 2017 it was rebranded as NEO. Like Ethereum, NEO focuses on the creation of smart (digital) contracts, that allows its users to execute agreements and manage digitized assets. A difference between these two types of cryptocurrency is that Ethereum developers can develop contracts using Ethereum programming languages. They need to learn these languages before start creating contracts. On the contrary, NEO allows its developers to create the contracts using familiar programming languages like Java. Concerning its price, 1 NEO is equal to around 13 EUR.
Monero is an open-source and secure type of currency, that allows anyone to execute transactions. It was launched in 2014 and its focus was decentralization and privacy on transactions. Monero transactions between users cannot be traced; outsiders can’t find out who the sender and the receiver are, nor how much money was transmitted. Hence, Monero is attracted to people who desire high privacy in their transactional operations. Conversion rate for XMR to EUR on August 2020, is around €76 and the total value of exchange exceeds €102 million.
Last but not least, Stellar is an open-source, decentralized protocol that enables its users to exchange cryptocurrencies (digital money) into fiat money. It was released in 2014 and is supported by Stellar Development Foundation. Stellar users can create, send and exchange any amount of money, while having to pay a small fee (0.00001 XLM or 1/10,000th of a cent). For the transmission of funds, the protocol is running by servers that communicate with other Stellar servers through the internet. Regarding Stellar value, 1XML corresponds to 0.087394 EUR. By August 2020, its market cap reached almost 200million EUR! Now that’s a big amount of money!
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