The Different Types of Cryptocurrencies That Are Traded Today

Bitcoin emerged onto the internet in 2009. In just a few short years since then, the cryptocurrency market has grown to be worth more than $3 trillion.

It’s safe to say that Satoshi Nakamoto was onto something.

But bitcoin isn’t the only cryptocurrency out there. While it remains the most popular crypto to trade, with billions moving on a daily basis, there are many other types of cryptocurrencies, with more and more popping up on the blockchain network daily.

Wondering what other cryptocurrencies you should be investing in and trading, in order to maximize your gains and build a well-rounded crypto portfolio? Here are the most common.

Altcoins

Bitcoin is the original cryptocurrency. Every other cryptocurrency, of which there are thousands, is considered an alternative coin, or “altcoin.”

While there is a large population of bitcoin maximalists, who think bitcoin is the only cryptocurrency that matters, most of the crypto community believes in additional projects and invests in many different cryptocurrencies.

Any coin or token listed in the top 100 by overall market cap is crypto worth investing consideration.

Coins And Tokens

The terms “coins” and “tokens” are often used interchangeably in the crypto space. But they mean two different things, so it’s important to understand the difference.

Cryptocurrency coins are those built on their own blockchain. This includes coins like bitcoin, Ethereum, Cardano, and others that have their own blockchain technology.

Tokens are currencies built on existing blockchains, which leverage the infrastructure and benefits of the larger project. The most popular blockchain to launch altcoins on is Ethereum.

Ethereum’s distributed ledger technology is arguably the most decentralized and secure, making it the ideal place to build your crypto project for long-term success. Ethereum currently uses the same proof-of-work consensus algorithm as bitcoin but is transitioning into a proof-of-stake currency in the near future.

Tokens on Ethereum include Aave, Compound (COMP), Chainlink (LINK), Uniswap (UNI), and many others.

Stablecoins

Stablecoins are the dollar bills of the cryptocurrency industry. These unique currencies are pegged to a stable asset. That means their value is tied most commonly to the US dollar, hence the term “stable.” This most likely means that the treasury behind a stablecoin consists of mostly US dollars, backing the currency.

Stablecoins make trading easier. It’s easier to move stablecoins around the internet, and around the world than it is to move actual US dollars. You can learn more about stablecoins and their benefits here.

Meme Tokens

There’s a lot of money to make in the world of meme tokens. Since anybody can launch their own cryptocurrency, many people do. Tokens like DogeCoin and Shiba Inu are the most popular and are primarily used for speculation.

Countless meme tokens are launched daily, and most fail and go to zero, so be careful when trading these.

Gaming Currencies

Crypto-based video games, like Axie Infinity, utilize actual cryptocurrency as the in-game currency. That means that you can trade the money you earn in-game on a cryptocurrency exchange and cash out. These currencies have created the play-to-earn model of video gaming and are becoming insanely popular across the globe.

Countless Types Of Cryptocurrencies

There are many other types of cryptocurrencies out there, with more unique use-cases popping up all the time. From utility to governance, long-term speculation, and short-term profits, crypto is traded for a wide variety of reasons.

And while trading crypto can be risky, the biggest risk of all is never getting in. Crypto is the future, so the sooner you jump in, the more you can experience the reward.

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