When Bitcoin launched in 2009, it didn’t have much — or any — competition in the newly minted realm of digital currency. By 2011, though, new types of cryptocurrency began to emerge as competitors adopted the blockchain technology that bitcoin was built on to launch their own platforms and currencies. Suddenly the race to create more crypto was on.
The rest, as they say, is history. The rush toward crypto is a financial services explosion that doesn’t affect a single country only, but one that has captured the entire world. To say that cryptocurrency is popular today is an understatement.
One of the reasons cryptocurrency has seized the hearts, minds, and wallets of so many people is the innovative nature of its blockchain technology. It’s impressive that blockchain and the concept of decentralization can apply not only to finance, but to so many other industries, needs, and uses in our society.
Then there’s the sheer speed of blockchain technology; money transfers abroad, for example, that used to take between 3-and-5 days via wire transfer can occur almost instantly — or as long as a few minutes, on a slow day — with blockchain. The list of reasons for crypto’s popularity seems endless. Crypto exemplifies numerous traits that appeal to both the human imagination and our everyday needs.
In this article, we examine cryptocurrencies in detail, discuss their various types, and highlight 20 coins that are popular today. Of course, all things crypto change as fast as the speed of blockchain. So, this list may already be obsolete after it’s published; but don’t worry, we’ll keep you updated.
Table of Contents
How Many Cryptocurrencies Are There?
Today there are thousands of different cryptocurrencies in the world, and while each is designed to provide some new feature or function, most are founded on principles similar to those of Bitcoin:
• Cryptocurrencies are not issued, regulated, or backed by a central authority like a bank or the government. They are decentralized, not centralized.
• Cryptocurrencies are created using a distributed ledger (blockchain) and peer-to-peer (P2P) review.
• Bitcoin and other coins are encrypted (secured) with specialized computer code called cryptography.
• As assets, cryptocurrencies are generally stored in digital wallets, commonly a blockchain wallet, which allows users to manage and trade their coins.
As of March 2022, there were more than 18,000 different types of cryptocurrencies, for a total market capitalization (market cap) for all cryptocurrencies of $2 trillion.
Also, in March 2022, approximately 8% of the United States population participated in cryptocurrency trading. And, as a continent, Asia had more than four time more crypto users than did any other continent.
Why Are There So Many Different Cryptocurrencies?
Bitcoin might have been conceived as an alternate means of exchange (like money), but using crypto as a currency is not legal in all parts of the world, and in some countries, crypto is restricted, or banned altogether. So, many of the 18,000 types of crypto are not used as money or currency at all.
Developers can build almost anything using powerful blockchain technology. Some crypto coins are used as investment vehicles, stores of value that may be bought, sold, or traded on crypto exchanges.
Many other crypto platforms have purposes that go far beyond acting as an exchange of value. Blockchain, in fact, can offer solutions to longstanding problems in many sectors of the economy besides finance including agriculture, cybersecurity, fine art, gaming, healthcare, insurance, law, medicine, real estate, and supply chain management.
Another reason there are so many types of cryptocurrencies could lay in the fear of missing out (FOMO) factor. Encouraged by crypto’s rapid growth of the past few years, in an effort to get in on any potential profit, entrepreneurs are continuously unleashing huge numbers of new coins to the crypto market.
What Are the Different Types of Crypto?
Although some people use the terms crypto, coins, and tokens interchangeably, they are not the same things. To gain a basic understanding of cryptocurrency, it’s important to understand how these terms differ from one another.
Cryptocurrencies generally fall into one of two categories:
• Coins: Can include Bitcoin and altcoins (all cryptocurrencies other than Bitcoin)
• Tokens: Programmable assets that live within the blockchain of a given platform
The term altcoin refers to all cryptocurrencies other than Bitcoin. Some main types of altcoins include mining-based cryptocurrencies, stablecoins, security tokens, and utility tokens.
What Are Crypto Coins?
Crypto coins are strings of computer code that can represent an asset, concept, or project — whether tangible, virtual, or digital — intended for various uses and with varying valuations. Originally, these coins were meant to function as a type of currency.
Cryptocurrencies are not like fiat currencies, e.g., the dollar, euro, or yen. Fiat money is tangible; it’s governed by central authorities, and it operates as a store of value: You can exchange any fiat for goods and services. But cryptocurrencies — including the various types of coins we discuss here — can serve many purposes beyond that of currency. Cryptocurrency as “currency” is a usage that only grazes the surface of blockchains’ capabilities. Because they are built on blockchain tech, some cryptos can offer solutions to long-standing problems in almost every sector of our economy.
What Are Tokens?
Tokens are usually created and distributed through an initial coin offering (ICO), much like an initial public offering (IPO) for stock. They can be represented as:
• Value tokens (like bitcoins)
• Security tokens (which are similar to stocks)
• Utility tokens (designated for specific uses)
Like American dollars, tokens represent value, but they are not exactly valuable themselves, in the same way a paper dollar’s value may not be $1. But tokens can be used in transactions for other things.
A token differs from a coin in the way it’s constructed within the blockchain of an existing coin, like Bitcoin or Ethereum.
Crypto Coins vs Tokens
When discussing cryptos, you’ll see the terms coin and token. Some people use them interchangeably, but that’s a mistake. They are not interchangeable, and it’s important to know the difference between a coin and a token.
While coins and tokens are considered forms of cryptocurrency, they provide different functions. Coins are built on their own blockchain and were originally intended as a form of currency. Generally, any blockchain-based cryptocurrency that is not Bitcoin is referred to as an altcoin (more on those below).
A digital coin is created on its own blockchain and acts much like fiat (traditional money). Coins can be used to store value and as a means of exchange between two parties doing business with each other. Examples of coins include Bitcoin and Litecoin.
But tokens — which are created on an existing blockchain (not their own) — can function in many more ways than acting as currency. Instead of representing an exchange of value, tokens are considered programmable assets on which you may create and execute unique smart contracts. These contracts can establish ownership of assets outside the blockchain network.
Tokens can represent units of value — including real-world items like electricity, money, points, coins, digital assets, and more — and can be sent and received. Ether (ETH), which is used to make transactions on the Ethereum network, is a token. In another example, the Basic Attention Token (BAT), also built on Ethereum, is used in digital advertising.
Tokens can be used as part of a software application — such as granting access to an app, verifying identity, or tracking products moving through a supply chain. They can also represent digital art — as with non-fungible tokens (NFTs). There have even been experiments using NFTs to represent physical assets, such as real-life art, and real estate.
What Are Altcoins?
The term altcoin began as shorthand for alternative to Bitcoin, and most altcoins were launched to improve upon Bitcoin in some way. Some examples of altcoins are Namecoin, Litecoin, Peercoin, Ethereum, and USD Coin.
Like Bitcoin, some cryptocurrencies have a limited supply of coins — which helps create demand and reinforce their perceived value. For example, there is a fixed number of bitcoins that can be created — 21 million, as decided by the creator(s) of Bitcoin.
Though most altcoins are built on the same basic framework as Bitcoin and share some of its characteristics, each altcoin offers slightly different traits. Some altcoins use a different process to produce and validate blocks of transactions. Some might offer new features, like smart contracts or an advantage, like less price volatility.
Get up to $1,000 in stock when you fund a new Active Invest account.*
Access stock trading, options, auto investing, IRAs, and more. Get started in just a few minutes.
*Customer must fund their Active Invest account with at least $10 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.
The 17 Largest Cryptocurrencies By Market Cap, as of June 25, 2022
Below is a list of the 20 biggest cryptocurrencies arranged by market capitalization (market cap) — highest first — according to CoinMarketCap on Jun 25, 2022. Bitcoin (BTC) is the clear leader in the cryptocurrency sector, with a market capitalization of $407,387,696,36, followed by Ethereum (ETH), at $149,402,716,985.
Biggest Is Not Necessarily Best, But…
It’s difficult to know which are the best cryptos — especially when there are so many virtual currencies with wildly varying prices. But quantitative metrics like market cap and others can help us attach comparative value to these myriad cryptocurrencies. Bitcoin, Ethereum, and some of the largest altcoins out there are top-tier options because of their scalability, privacy, and the scope of functionality they support.
Market Cap For Valuing Cryptos?
Borrowed from traditional finance (TradFi), market cap is an essential metric because it helps investors and analysts form a rough estimate of a crypto’s stability. A coin with a much larger market cap than its peers has the potential to be a more stable investment than one with a much smaller market cap. Digital currencies with smaller market caps are more susceptible to the whims of the market; they have the potential to experience dramatic gains or losses.
To calculate a cryptocurrency’s market cap you multiply its current price by the total number of coins in circulation.
Prices of cryptocurrencies are continuously changing — every moment of every day. The global crypto market is open for trading 24/7. As such, data like these are obsolete the moment they’re published. CoinMarketCap publishes price changes of cryptocurrencies in real time daily.
Finally, note that, in the list below, the name of the blockchain platform may be different from its digital currency.
1. Bitcoin (BTC)
• BTC—Crypto Type: Token
• Market Cap (06/25/22): $410,202,265,385
Bitcoin in the clear leader in the crypto sector. It is also the very first cryptocurrency. Bitcoin launched in 2009; created by a person (or possibly a group) that goes by the pseudonym Satoshi Nakamoto. As of June 2022, there are slightly more than 19 million Bitcoin tokens in circulation, against a capped limit of 21 million. Almost a thousand new bitcoins are mined each day, bringing Bitcoin ever closer to its maximum finite number.
Bitcoin was designed to be independent of any government or central bank. Instead, it relies on blockchain technology, a decentralized public ledger that contains a digital record of every Bitcoin transaction. Bitcoin established the basic system of cryptography and consensus — i.e., peer-to-peer (P2P) verification — that is the foundation of most forms of crypto today.
💡 Recommended: Bitcoin Price History: 2009-2022
As a reminder, a P2P network structure in blockchain technology is generally decentralized and designed to operate in the best interest of all parties involved, as opposed to benefitting a centralized entity primarily. A peer-to-peer blockchain network connects different computers (or nodes) together, so they can function in unison. Ideally, P2P platforms are censorship resistant, open, public networks, which allow important data and other functionalities to be shared.
Bitcoin miners use powerful computers to verify blocks of transactions and generate more bitcoins. Bitcoin mining uses a complex, time-consuming process called proof of work (PoW). The transactions are logged permanently on the blockchain — which helps to validate and secure each bitcoin and the network as a whole. Recently, the vast amount of energy required to create Bitcoin has raised concerns about environmental pollution.
2. Ethereum (ETH)
• ETH—Crypto Type: Token
• Market Cap (06/25/22): $150,833,549,828
Like Bitcoin, Ethereum is a blockchain network. But Ethereum was designed as a programmable blockchain — meaning it wasn’t created to support a currency, but rather to enable the network’s users to create, publish, monetize, and deploy decentralized applications (dApps). Ether (ETH), the native Ethereum currency, was developed as a form of payment on the Ethereum platform. It might be helpful to think of ETH as a kind of fuel that powers the Ethereum blockchain. Ethereum has helped to launch many initial coin offerings because many ICOs are built on the Ethereum blockchain. Ethereum has also been the blockchain behind the boom in non-fungible tokens (NFTs).
As the two most widely known blockchains and cryptocurrencies, many people often directly compare Ethereum and Bitcoin against each other. In reality, Bitcoin and Ethereum are designed to achieve different goals, and in many ways can be regarded as complementary forces. Bitcoin is a peer-to-peer digital cash network, which facilitates transactions without the need for a central authority. This novel network architecture has paved the way for the complex blockchain ecosystem that we have today. Ethereum, often referred to as the world computer, iterates on Bitcoin’s technology while introducing smart contracts. Smart contracts allow for building dApps that span a broad range of crowdfunding platforms, financial instruments, digital games and collectibles, and decentralized marketplaces.
As of June 2022, Ether was the number two virtual currency, behind Bitcoin. Also like BTC, ETH is generated using a PoW system. But unlike Bitcoin, there is no limit to the number of ETH that can be created.
3. Tether (USDT)
• USDT—Crypto Type: Stablecoin
• Market Cap (06/25/22): $66,837,248,865
Tether was the first cryptocurrency marketed as a stablecoin — a breed of crypto known as fiat-collateralized stablecoins. The value of the tether is pegged to a fiat currency — in this case, the U.S. dollar. Tether is the world’s largest stablecoin; in 2022, the majority of cryptocurrencies traded using tether.
Like other stablecoins, tether is designed to offer stability, transparency, and lower transaction fees to users. Tether was not meant to be a speculative investment like some cryptocurrencies; originally, investors who wanted to avoid the extreme volatility of the crypto market used USDT. Tether is pegged to the U.S. dollar (which is why the ticker is USDT), and it allegedly maintains a 1:1 value with the dollar, although this claim has come under some scrutiny.
Many believe that Tether is the lifeblood of the crypto ecosystem. They’re concerned that if Tether implodes, then the entire system would crash.
In May 2022, that’s exactly what happened: Tether lost its peg to the dollar briefly, and all cryptocurrencies plummeted. In part, this was a result of another stablecoin, terraUSD (USD) falling below 30 cents. The wave of panic in the broader crypto market was palpable. Because of this crash, many crypto investors tried to redeem their tethers, others tried to exit the asset class altogether, and many lost their investments.
4. USD Coin (USDC)
• USDC Crypto Type: Stablecoin
• Market Cap (06/25/22): $55,887,416,457
USD Coin (USDC) is a digital stablecoin pegged to the U.S. dollar. It operates on the Ethereum and Stellar blockchains. USDC was initially created by the Centre consortium, which includes its two main founding members, Circle and Coinbase. Each USDC token is backed by $1 held in reserve and regularly audited by Grant Thornton, a major accounting corporation. USDC was launched in September 2018, and during March 2021 it was announced that Visa would facilitate the use of USDC for settlement on its payment network.
USDC is a stablecoin that runs on the Ethereum blockchain and several others. It is pegged to the U.S. dollar. Like the stablecoin tether (USDT) described above, a USDC is worth one U.S. dollar — the guaranteed 1:1 ratio making it a stable form of exchange.
Various stablecoins have proliferated as the crypto ecosystem has developed, and many are now an essential part of the market. How a stablecoin maintains its stability — known as its peg — is dependent on its infrastructure. Stablecoins can be issued by a centralized institution or collateralized in a decentralized way. They can even use one of numerous algorithmic mechanisms to maintain a stable price.
The goal of having a stablecoin like USDC is to make transactions faster and cheaper. While there are questions about whether the tether stablecoin is fully backed by U.S. dollar reserves, some investors believe that USDC is more transparent: Its reserves are monitored by the American arm of Grant Thornton, LLC, a global accounting firm. On March 29, 2021, Visa announced the use of USDC to settle transactions on its payment network. As of June 2022, there were 55.09 billion USDC in circulation.
5. Binance Coin (BNB)
• BNB—Crypto Type: Coin
• Market Cap (06/25/22): $39,135,965,106
Binance is one of the world’s biggest cryptocurrency exchanges. The Binance Coin (BNB) was created as a utility token for use as a medium of exchange on Binance. It was initially built on the Ethereum blockchain, but now lives on Binance’s own blockchain platform. Originally, BNB allowed traders to get discounts on trading fees on Binance, but now it also can be used for payments, to book travel, for entertainment, online services, and financial services.
As one of the top five cryptocurrencies by market cap in 2022, BNB has developed a wide range of use cases and real-world applications. But, as with other digital assets, this crypto platform has also faced regulatory hurdles here and abroad.
BNB was created with a maximum of 200 million tokens, about half of which were made available to investors during its ICO. Every quarter, to drive demand, Binance buys back and then “burns” — permanently destroys, or removes from circulation — some of the coins it holds. A project burns its tokens to reduce the overall supply. The motivation is often to increase the value of the remaining tokens, as assets tend to rise in price whenever the circulating supply falls, and they become more scarce.
6. XRP (XRP)
• XRP—Crypto Type: Coin
• Market Cap (06/25/22): $17,768,795,974
XRP is the native coin of the Ripple Ledger Network. It is designed to be a medium of exchange and value transfer, and is intended to be used as a low-cost bridge between fiat currencies for a broad range of global transactions.
XRP enables a system that can outperform many established cryptocurrencies and fiat transmission technologies. This has led to a world-class payments system that minimizes intermediary processes and enhances the overall benefit to its users.
XRP was developed by Ripple Labs, Inc. And while some people use the terms XRP and Ripple interchangeably, they are different. Ripple is a global money transfer network used by financial services companies. XRP is the crypto that was designed to work on the Ripple network. You can buy XRP as an investment, as a coin to exchange for other cryptocurrencies, or as a way to finance transactions on Ripple.
Unlike Bitcoin and many other cryptocurrencies, XRP cannot be mined; instead, there is a limited number of coins — 100 billion XRP — that already exist. Also, XRP doesn’t rely on a complex digital verification process via blockchain the way Bitcoin and others do. The Ripple network employs a unique system for validating transactions in which participating nodes conduct a poll to verify transactions. This makes XRP transactions faster and cheaper than Bitcoin.
7. Binance USD (BUSD)
• BUSD—Crypto Type: Stablecoin
• Market Cap (06/25/22): $17,365,183,938
Binance USD (BUSD) is the stablecoin developed and employed by the Binance exchange platform. BUSD is pegged at a 1:1 ratio to the U.S. dollar and was initially deployed on the BNB Chain. BUSD is also interoperable with other blockchains such as Ethereum, and can be used for various DeFi applications and value transfers between blockchains. BUSD is one of the largest USD-pegged stablecoins in the world, with a market cap of approximately USD 18 billion (as of June 25, 2022).
Binance USD (BUSD) is a 1:1 USD-backed stable coin issued by Binance (in partnership with Paxos). BUSD is approved and regulated by the New York State Department of Financial Services (NYDFS). Launched in September 2019, BUSD aims to meld the stability of the dollar with blockchain technology. It is a digital fiat currency, issued as an ERC-20 token and supports BEP-2.
Based on their price stability, stablecoins plays an important role in transactions, payments and settlement, and decentralized finance (DeFi). Here are some things you can do with BUSD:
• Transfer BUSD anywhere in minutes at low cost on the blockchain
• Trade it on different centralized and decentralized exchanges (DEXs)
• Deposit it to earn an interest rate
• Pay; use it as payment for goods and services
• Use it as collateral and loan asset
• Use it as cross-collateral in futures trading
• Store it on an exchange or in a wallet
8. Dogecoin (DOGE)
• DOGE—Crypto Type: Altcoin, Meme Coin
• Market Cap (06/25/22): $9,088,298,080
Dogecoin (pronounced dohj-coin) is widely known as the first joke cryptocurrency; it was launched in 2013 as a way to poke fun at Bitcoin. Nonetheless, the currency captured people’s attention and a fair amount of investment. In April 2019, a tweet from Elon Musk indicated he had a positive view of Dogecoin, which further raised Dogecoin’s profile as a legitimate cryptocurrency.
Dogecoin is an altcoin similar to Bitcoin and Ethereum in that it runs on a blockchain network using a PoW system. But the number of coins that can be mined are unlimited (versus the 21 million-coin cap on Bitcoin).
Dogecoin has been used primarily as a tipping system on Reddit and Twitter to reward the creation or sharing of quality content. You can get tipped Dogecoin by participating in a community that uses the digital currency, or you can get your Dogecoin from a Dogecoin faucet. A Dogecoin faucet is a website that will give you a small amount of Dogecoin for free as an introduction to the currency, so that you can begin interacting in Dogecoin communities.
Dogecoin is also associated with some headline moments in crypto — for example, investors paid the equivalent of about $30,000 in Dogecoin to help send the Jamaican bobsled team to the Winter Olympics in 2014.
Despite its place as one of the biggest coins by market cap, DOGE trades at one of the lowest prices: $0.072 cents, as of June 25, 2022.
9. Polkadot (DOT)
• DOT—Crypto Type: Token
• Market Cap (06/25/22): $8,032,704,478
Gavin Wood co-founded Polkadot — he also co-founded Ethereum — to take the capabilities of a blockchain network to another level. The blockchain’s cryptocurrency is called DOT. Since its launch in 2020, the Polkadot platform has become one of the bigger crypto networks in a relatively short time.
Polkadot operates using two blockchains — the main relay network, where transactions are permanent, and a parallel network of user-created blockchains, called parachains. Parachains are Polkadot-based independent blockchains that connect to and run off of Polkadot’s main blockchain (relay chain).
Parachains process transactions via sharding — splitting a blockchain into multiple pieces, or shards, and storing that separated data across multiple different computers. In this way, the computational burden on each computer is lessened. The network can process a larger volume of transactions — than if the sharding had not occurred — at extremely fast transaction times. Parachains can be customized for myriad uses like building apps; they can support other coins, and may benefit from the main blockchain’s security.
What differentiates Polkadot from other blockchains is its core mission to solve the problem of interoperability by building so-called bridges between blockchains. Polkadot is not the only system trying to act as a translator to help blockchains talk to one another.
10. Dai (DAI)
• DAI—Crypto Type: Token (originally), Now a Coin
• Market Cap (06/25/22): $6,812,982,370
Dai (DAI) is one of two native cryptocurrencies of the Maker Protocol, an open-source software application maintained by the Maker distributed autonomous organization (MakerDAO).
DAI, is a decentralized stablecoin — meaning that it’s not managed by a central authority or organization, but by smart contracts. It’s also soft-pegged to the U.S. dollar — it’s correlated to USD but not backed by actual dollars — to try to keep its value relatively steady compared with other cryptos. The utility and governance token of MakerDAO is MKR, which is used to stabilize the price of Dai crypto.
Dai was created to facilitate crypto lending, which is the main focus of the Maker protocol. But as an ERC20 token, Dai crypto also offers a wide range of possible use cases on Ethereum, including the creation of smart contracts.
Dai (DAI) is a collateral-backed cryptocurrency, one that attempts to maintain roughly a one-to-one value with the U.S. dollar through the use of smart contracts. In other words, Dai coin is a stablecoin. But whereas other stablecoins are run by centralized organizations that seek to keep their prices steady, DAI crypto is based on smart contracts and backed by other forms of crypto, by using collateralized debt.
11. Shiba Inu (SHIB)
• SHIB Crypto Type: Altcoin, Meme Coin
• Market Cap (06/25/22): $6,475,986,264
Shiba Inu cryptocurrency (SHIB) is what’s known as a “meme coin,” or a cryptocurrency based on a meme. A meme coin is a cryptocurrency or crypto token based on a viral joke or cultural reference. Projects built around meme coins rely heavily on social media hype to attract new users/investors. Shiba Inu (SHIB) was inspired by Dogecoin (DOGE), the original meme coin created in 2014 that uses the image of a Shiba Inu dog, and which we discussed above.
SHIB intends to be an alternative to Dogecoin or a “Dogecoin killer.” Unlike DOGE, which has its own blockchain, SHIB runs on the Ethereum blockchain. One thing DOGE and SHIB both have in common, however, is that their supply is abundant. SHIB began with an initial circulating supply of one quadrillion coins.
As with any investment vehicle, Shiba Inu crypto has both advantages and disadvantages. It also has value for a couple of reasons:
• There is a limited supply of SHIB. The SHIB coin was launched in 2020 with a fixed 1 quadrillion supply — nearly 50% of which has already been burned or donated — which has kept the market price low (one SHIB coin is worth a fraction of a penny). The cap on the number of coins has also given the price somewhere to go, if demand should rise.
• SHIB comes with attractive rewards. Shiba Inu has a system that can provide investors with passive income via rewards from staking — locking up crypto holdings to get rewards or earn interest — or depositing funds in a liquidity pool. This reward system intends to offer users the incentive to expend different coins on the network.
12. TRON (TRX)
• TRX—Crypto Type: Token
• Market Cap (06/25/22): $6,004,598,717
TRON (TRX) is a decentralized blockchain-based operating system developed by the Tron Foundation and launched in 2017. Originally, TRX tokens were ERC-20-based tokens deployed on Ethereum, but a year later they moved to their own network. TRON is a blockchain-based operating system that aims to ensure this technology is suitable for daily use.
The TRON software supports smart contracts, various kinds of blockchain systems, and dApps. It uses a transaction model similar to Bitcoin, namely UTXO. Transactions take place in a public ledger, where users can track the history of operations. The data hosted on the TRON network is free with no central authority.
TRON aims to help content creators — who receive only a small part of income for their work, in the form of TRX tokens — and encourage them with more rewards. For example, TRON invites content consumers to reward content makers directly, without intermediaries like YouTube, Meta, or Apple. TRON also deploys decentralized games on the network, and players can encourage and reward creators with digital assets directly.
The platform was built to create a decentralized Internet and serves as a tool for developers to create dApps, acting as an alternative to Ethereum. Anyone can create dApps on the TRON network, offer content, and in return receive digital assets as compensation for their efforts. The ability to create content and share it openly without hesitation regarding transaction fees is an advantage of TRON.
13. Avalanche (AVAX)
• AVAX—Crypto Type: Token
• Market Cap (06/25/22): $6,018,277,629
Avalanche (AVAX) is a blockchain platform built for smart contracts, dApps, and subnets (customized blockchains). The network focuses on fast transactions, low fees, and efficient energy. AVAX, is Avalanche’s native token.
With its three-blockchain architecture and PoS consensus protocol, Avalanche can deliver high throughput, which will help the network grow without sacrificing its security or decentralization.
Avalanche is part of a group of smart contract platforms that compete with Ethereum, collectively referred to as “Ethereum killers.” As we note earlier, Ethereum is the second-largest crypto by market cap and was the first blockchain to enable smart contract functionality. Smart contracts are programmatic agreements that are trustless, i.e., they don’t require third-party authentication and can execute automatically when certain conditions are met.
The Ethereum network has been host to numerous complex apps for decentralized finance (DeFi), and non-fungible tokens (NFTs) also have been built on Ethereum. This has created network congestion as users compete to have their transactions included in the next block on the blockchain, which has resulted in higher gas fees. Because of this, crypto protocols have begun building on layer-2 solutions. Avalanche wants to work around this need and instead have a layer-1 solution that can handle all that’s needed for this kind of blockchain .
Avalanche use three different blockchains to achieve this, which allows the platform to perform at a scale suitable for the broader internet. Each of the three blockchains performs a specialized task in the Avalanche ecosystem, whereas on most other blockchains, a single chain handles all the work.
14. UNUS SED LEO (LEO)
• LEO—Crypto Type: Token
• Market Cap (06/25/22): $5,619,863,497
UNUS SED LEO is a utility token that’s used across the iFinex ecosystem, and IFinex is the parent company of Bitfinex.
iFinex launched LEO in May 2019 for a specific purpose. Unlike many other cryptocurrencies, LEO was not meant to exist forever. UNUS SED LEO was founded after Crypto Capital — a company that processed iFinex’s payments — had part of its funds seized by the government. Because it was not clear whether IFinex could recover these funds, it created LEO to help defray the financial shortfall.
LEO helps Bitfinex users save money on trading fees by offering them a discount based on how much LEO a customer has in their account.
Whereas some cryptocurrencies just launch on a single blockchain, LEO tokens were issued on two blockchains. While 64% of the original supply was on Ethereum, the remaining 36% were created on EOS ( a platform designed to allow developers to build dApps easily.
The project’s goal is relatively simple: to make it as straightforward as possible for programmers to embrace blockchain technology — and ensure that the network is easier to use than rivals.
Throughout the process of creating the token, iFinex acted with transparency, announcing that it would buy back the token from investors gradually until none were left circulating in the marketplace. iFinex also put monitoring procedures in place so the crypto community could see whether the LEO initiative was meeting its stated targets. This type of integrity is one quality that makes UNUS SED LEO a unique crypto.
15. Wrapped Bitcoin (WBTC)
• WBTC—Crypto Type: Token
• Market Cap (06/25/22): $5,692,540,738
A wrapped cryptocurrency is an ERC-20 token that has the exact value as the other asset it represents. The value can be pegged either through 1-to-1 backing with the underlying asset or via a smart contract that negotiates a stable value.
Wrapped Bitcoin is an ERC-20 token that represents one bitcoin and can be used in dApps. With WBTC, users can deploy bitcoin in the Ethereum ecosystem, whereas otherwise they would not be able to. Decentralized applications (dApps) can process wrapped token transactions faster than unwrapped versions because there’s no need to compute across different blockchains, which is difficult.
The only thing required to transact on Ethereum using wrapped tokens is a small gas (ETH) fee.
There are currently several types of wrapped cryptocurrencies, including a handful of stablecoins like Tether (USDT) and Coinbase’s United States Dollar Coin (USDC). Private cryptocurrency Zcash has a wrapped token, too. And other coins are coming out with wrapped versions, in an effort to stay relevant and usable during a period of rapid DeFi adoption.
Launched in January 2019, WBTC was designed to bring the liquidity of bitcoin to Ethereum. In the 18 months following its launch, users converted more than $800 million of Bitcoin into WBTC.
16. Litecoin (LTC)
• LTC Crypto Type: Coin
• Market Cap (06/25/22): $4,162,336,685
Litecoin (LTC) is a cryptocurrency created in 2011 as one of the first altcoins (alternatives to bitcoin). Though it’s built on bitcoin’s original source code and shares certain features with BTC, LTC was designed to improve upon BTC, especially in terms of transaction speed. Though Litecoin was initially a popular entry into the crypto category, it has gained and lost value over time, displaying a similar volatility to many cryptocurrencies (or even certain stocks and bonds).
Like many forms of crypto, Litecoin is a decentralized, peer-to-peer cryptocurrency; it was created from a fork in the Bitcoin blockchain, the transparent, digital public ledger used by most cryptocurrencies. Litecoin was designed to enable almost instant, near-zero cost payments that can be exchanged between people or institutions worldwide.
As with Bitcoin, Litecoin uses a PoW consensus system to verify transactions on the blockchain, but owing to certain modifications it’s considered a lighter, faster version of Bitcoin. The main difference between Litecoin and Bitcoin is that Litecoin uses a mining algorithm called scrypt, to enable faster transaction times.
Litecoin generates a new block to be mined every 2.5 minutes, which is about four times faster than Bitcoin’s 10 minutes. The Litecoin supply is also four times as great. While Bitcoin has a cap of 21 million coins, the Litecoin supply overall has a cap of 84 million.
17. Uniswap (UNI)
• UNI—Crypto Type: Token
• Market Cap (06/25/22): $4,137,726,799
Uniswap is the largest decentralized crypto exchange (DEX) running on the Ethereum blockchain. Its native governance token is the UNI. Uniswap is a protocol on the Ethereum blockchain for swapping all ERC-20 tokens. Unlike centralized exchanges, which are set up to charge transaction fees, Uniswap is designed more as a tool for the community to trade tokens without platform fees or middlemen.
Unlike well-established, centralized crypto exchanges (CEXs) like Binance or Coinbase, the Uniswap protocol uses smart contracts to facilitate trading of ERC-20 tokens, acting as an automated market maker (AMM). The AMM model, which powers most decentralized exchanges, does away with the traditional order book, which would contain all bid and ask (buy and sell) orders on an exchange. Rather than stating the current market price of an asset, an AMM conjures liquidity pools through smart contracts. The pools then execute trades according to preset algorithms.
Uniswap was one of the first DEXs to create an automated liquidity protocol to facilitate trades. Unlike well-established, centralized crypto exchanges (CEX) like Binance or Coinbase, the Uniswap protocol uses smart contracts to facilitate trading of ERC-20 tokens, acting as an AMM. Uniswap was one of the first DEXs to create an automated liquidity protocol to facilitate trades.
On October 31 in 2009, an individual or group of individuals using the pseudonym Satoshi Nakamoto launched the Bitcoin project, described a year earlier in the iconic whitepaper, Bitcoin: A Peer-to-Peer Electronic Cash System. . In this way, cryptocurrency was born.
Could the author of that paper have known then that the public release of Bitcoin would set the world on a path toward economic and social change the likes of which it could not have imagined? Possibly not. Yet, today, there are thousands of different cryptocurrencies for investors to learn about.
This guide to 20 different types of cryptocurrency offers a grounding in today’s largest cryptocurrencies, including how and why they differ from each other. We hope it would help you decide how best to invest in crypto, according to your own investment style and tolerance for risk.
Can you invest in all types of crypto?
Yes. It’s possible to invest in all the types of crypto mentioned here, and many more. However, not all crypto exchanges offer all the different cryptos in existence. So,— if you’re looking for a specific coin, it’s best to see which exchanges carry it. It’s also wise to check the fee schedules of the exchanges you’re interested in, as they may be different across exchanges.
Is crypto regulated by the Securities and Exchange Commission (SEC)?
Not entirely; but the SEC is working on it: In May 2022, SEC Chair Gary Gensler announced plans to expand the SEC’s Crypto Assets and Cyber Unit — which has existed as an arm of the SEC Division of Enforcement since 2017 — by adding 20 new dedicated positions. At the same meeting, Gensler also said that the SEC plans to register and regulate crypto exchanges.
The expanded Crypto Assets and Cyber Unit will continue to leverage the agency’s expertise to ensure that investors are protected in the crypto markets.
A number of cryptos are considered by the SEC to be securities, so the SEC will continue to investigate securities law violations related to crypto asset offerings. In its investigations, and rule making, the SEC also will focus on crypto asset exchanges, crypto asset lending and staking products; decentralized finance (DeFi) platforms; non-fungible tokens (NFTs); and stablecoins.
When did crypto become popular?
In its now 13-year-old history, there are some milestones that, in hindsight, may be said to correlate with cryptocurrency’s and Bitcoin’s surge in popularity. These include, but are not limited to, the year 2011, when the first rivals to Bitcoin’s supremacy (the altcoins) came on the scene. Another marker could be around 2016, when ordinary folks began to wake up to the power of blockchain technology and the Ethereum coin, ETH, became wildly popular. Following upon ETH’s popularity, was a frenzy of initial coin offerings (ICOs), which finally reached its peak in early 2018, at 1,253 ICOs.
Another pivotal period was in 2017, when Bitcoin reached a priced of $10,000 and continued to grow. This growth resulted in part from a gradual increase in the number of places where Bitcoin could be spent, as well as traded.
Not insignificantly, crypto’s popularity spurt in 2017 also coincided with the first commercial and investment banks’ displaying interest in the digital assets sector.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
|First Trade Amount