Analysts estimate that 1 billion people around the globe use different crypto types. They also expect the worldwide blockchain market to reach a value of over $39 billion by 2025.
If you’re new to investing in cryptocurrency projects, the number of choices might seem overwhelming. But there are several types of crypto that stand head and shoulders above the rest.
The following guide will explore the most popular cryptocurrencies and why they’re loved.
Bitcoin
When it comes to crypto for beginners, there’s no better place to start than BTC. It’s currently the oldest and most popular cryptocurrency in existence, with a market cap of over $500 billion.
People love Bitcoin for its accessibility and versatility as a currency. It’s great for purchasing goods and services because it only takes a few minutes to transfer BTC from one user to another.
Plus, more and more places have started accepting BTC as a valid payment method. You can even buy and sell BTC from Bitcoin ATMs around the country. Visit bytefederal.com to find ATMs near you and learn how they work.
Like most crypto options, Bitcoin offers anonymity and transparency to its investors and traders. Bitcoin protects its users by using numbered codes and public keys. Doing so shields users from public tracking and conceals their transactions.
Crypto enthusiasts also note that it could reach its fixed cap of 21 million coins in the next few years. If that happens, the price might rise substantially and make great returns for investors.
Ether
Ether is another popular type of crypto that utilizes the Ethereum blockchain to run. Ether runs on its own blockchain, similar to BTC, but the biggest difference is that it has no cap limit.
So, in theory, an unlimited number of Ethers can come into existence. Ethereum includes smart contracts that run on its blockchain and get executed after the fulfillment of certain requirements.
You can use Ether as the main tool for collateral when it comes to the DeFi lending market. You can also use it on popular NFT marketplaces to make purchases.
Users also love the convenience of using Ether for third-party apps. Perhaps the biggest benefit of Ether is that it’s part of the world’s biggest crypto ecosystem as of this writing.
Binance Coin (BNB)
Binance Coin is issued by Binance, which is one of the biggest crypto exchanges in the world. Binance charges users fewer transaction fees for exchanges if they use Binance Coin (BNB) to pay.
Many investors that use the Binance exchange flock to Binance Coin for in-house perks. That has helped the coin become one of the most popular options on the market today.
Binance also eliminates or “burns” a set amount of the circulating coins to help keep its value stable. Users can also use BNB to buy newly listed cryptocurrencies on the Binance platform.
BNB has gained backing from other important partnerships in recent years, which have helped increase its usage. For example, Binance Coin partnered with a huge streaming platform in Asia called Uplive.
On Uplive, their 20 million users can sell virtual gifts in exchange for BNB tokens. Many BNB supporters hope that more partnerships like this pop up in the future to help establish the coin as a major player in the crypto world.
Solana
Solana (SOL) is the native coin used on the Solana platform that runs on a blockchain the same way ETH and BTC do. Crypto investors love that SOL’s network can conduct a staggering 50,000 transactions every second.
For those looking for quick trades, Solana’s speed makes it very attractive. To give some perspective, it’s about 1,000 times faster than BTC in terms of transaction speed.
Solana uses a Proof of History (PoH) concept that helps when it comes to its impressive low-cost transaction. However, it’s important to note that it sacrifices security in exchange for that speed.
It’s important to note that Solana has two big vulnerabilities to consider before investing. There are potential issues with its development that some think might lead to centralization. If that happens, expect concerns with its overall security for holders.
XRP
XRP is a crypto that runs on the Ripple network, and many think of it as a cryptocurrency made for banks. That’s because it was designed to meet the unique demands of the financial services industry.
In the beginning, XRP’s main use was to enable easy international payments. XRP serves as a bridge connecting two separate currencies to deliver more affordable, faster international transfers.
Because it’s newer than BTC, many XRP fans view it as more scalable. Because it has more room to grow, some investors see great potential for big returns with XRP investments.
You should know that a lawsuit against XRP by the SEC might rear its ugly head in 2023. If XRP wins in court, the price might soar into the stratosphere. But if the ruling isn’t in XRP’s favor, its value might tank all the way to zero.
Tether
Tether is a stablecoin made so that it has less volatility than other coins. That’s because its price is connected to an outside asset.
This means that every Tether coin gets supported by an equal amount of US currency. This way, it won’t experience the same sort of pricing fluctuations that other coins encounter. Although, some investors question whether it’s honestly supported by the US dollar.
It’s fully transparent, supported by many blockchains, complies with regulations, and has exceptional liquidity. If you’re building a crypto portfolio for the first time, consider adding some Tether as a hedge against volatility.
The most concerning risks that come with investing in Tether don’t have anything to do with its technology. The risks involve potential legal, security, financial, and censorship issues. That’s because Tether Limited hasn’t ever had ongoing relationships with banks.
Cardano
Cardano (ADA) serves as Cardano Blockchain’s primary coin. Crypto investors often refer to it as a “third-generation” crypto coin.
The Cardano blockchain divides into two layers to improve transaction times and uses native tokens to provide an enhanced experience for holders of ADA.
ADA runs on one of the most eco-friendly blockchains in existence. For that reason, many BTC supporters have jumped ship to ADA in an effort to go green.
Cardano also uses a peer-reviewed network for research to pilot its blockchain evolution. Using this method helps secure its survival and growth regardless of where its parent organization goes.
The biggest risk of holding ADA long-term is that the coin might be too late to the crypto game. Some crypto investors don’t have faith that it can ever catch up to Ethereum at this point.
Dogecoin
Dogecoin was initially created as a joke to make fun of BTC and crypto in general. However, DOGE has now evolved into one of the most popular circulating cryptos.
It was established in 2013 and based on a silly dog meme making the rounds that same year. Dogecoin first made real waves in the crypto world in 2021 and has since ballooned to a market value in the billions.
Dogecoin is also a fork of Litecoin and uses blockchain technology, just like BTC. But it differs from Bitcoin because it has no fixed coin limit, which excites many investors.
Its unlimited cap allows crypto miners around the globe to mine infinite Dogecoins. Keep in mind that there is more risk with DOGE investments because of the infinite amount of coins. The value of Dogecoin might rise or plummet suddenly, so use caution.
Shiba Inu Coin
The Shiba Inu coin came into existence in 2020 via an anonymous creator known as Ryoshi. No one knows who the original creator is or if “Ryoshi” is one person or a team of people.
Shiba Inu works on a decentralized computer network like other major cryptocurrencies and runs on the Ethereum blockchain. Because it runs on such a trusted blockchain, it has excellent security and functionality.
As of this writing, Shiba Inu Coin trades for much less than a peDespiteepite its meager trading price, it has a value in the billions.
It has a staggering circulating supply of exactly 549 trillion coins. In total, it had about 1 quadrillion authorized coins, which is difficult for many crypto newcomers to wrap their heads around.
However, much like BNB, about 40 percent of those coins got destroyed by the co-founder of Ethereum, Vitalik Buterin, to lower the circulating supply. When a coin gets destroyed, it means that no one else can use it, making Shiba Inu coins more scarce.
USD Coin
Similar to Tether, USD Coin functions as a stablecoin linked to the US dollar, and no one can mine it. However, USD Coin differs from Tether in that it has better funding transparency and more satisfactory auditing procedures.
The purpose of the USD Coin is to limit some of the risks that come with crypto investments. USD Coin holders should always have the option to withdraw their investment and get the same amount of cashback in return.
It also lets crypto traders buy and sell other coins without needing to add and remove fiat currency from crypto exchanges. You can transfer USD coins around the clock, and it’s quicker to send than conventional currencies.
Polygon
Polygon (MATIC) is a cryptocurrency that concentrates on giving access to digital app creators. It also exists to help grow the Ethereum cryptocurrency.
It was created in 2017 and originally went by the name “Matic.” In 2021, the name changed to Polygon, and that’s what it’s still called today.
It allows speedier endless expensive transactions to help developers make safe, scalable, and user-friendly DApps. The hope is that its Layer-2 scaling method can spur mass adoption of Ethereum’s platform.
Avalanche
Avalanche has greatly revved up transaction processing speeds via blockchain technology. This crypto coin has a special method of blending three different networks.
The parallel qualities of Avalanche’s agreement protocol allow the Avalanche blockchain to validate transactions much faster than the Ethereum blockchain.
However, Avalanche is still a newcomer and comes with some risks that tried and true cryptos don’t. Holders might experience network outages or slow speeds at times.
Some crypto investors worry that the network’s developers could also withdraw and end the existence of the project. Others worry about potential security breaches and vulnerabilities leading to losses.
But if Avalanch survives its trial by fire, its value might explode. Like with any cryptocurrency, both the risk and reward tend to be higher the earlier you get in.
Chainlink
Chainlink is a cryptocurrency that has a lot of people talking in the blockchain tech realm. It has a special feature that combines off-chain data into smart contracts via an Oracle network.
It’s already altered the way blockchains link with outside data and transactions. If you want to invest in fresh new crypto projects with a lot of upsides, Chainlink should stay on your radar in 2023.
Its creative tech and possibility for growth make it a worthwhile asset to have in any crypto portfolio. Just keep in mind that the Chainlink system is governed by economic motivations and staking, which take away from its security.
Understanding Popular Types of Crypto
Now you have a great list of popular types of crypto to choose from when starting your portfolio. Remember the benefits of each cryptocurrency and decide how each might fit into your investment strategy.
Also, keep the risks of each cryptocurrency mentioned in mind before making any final decisions. Take a look at our site’s tech and business sections for more smart ways to invest money.
