Back then, the types and number of cryptocurrency in the world can be counted by the fingers in your hand. These days, good luck with that! Cryptocurrency market grown a lot since its inception. As we proceed in this article, we will be explaining the major types of crypto which are:
- Bitcoin
- Altcoins and;
- Tokens
With blockchain technology, this becomes possible. In fact, Bitcoin was the very first one. From there on, there have been countless of blockchains that were created and these are otherwise referred to as altcoins. Then there were tokens.
A Deeper Look into Blockchain Technology
Alright, so we already know the three main types of crypto. But what about it? How they are different from each and what they can do?
Bitcoin
It’s a digital currency you could send to others; perhaps has a gift, as payment for service and/or product.
Bitcoin acts like money but it is purely in digital form. But that is not where the difference lies. This is decentralized as well or in other words, no bank or third party handles it.
When using Bitcoin, every transaction takes place between users or called as P2P network. Since no third-party is needed, there’s no reason to identity yourself. You could start making payments and remain anonymous. And mind you, there are many people who are investing in Bitcoin and even using their law cash pre settlement funding just to get their hands off of it.
Altcoins
Then come the altcoins. As of the moment, there are literally thousands of it you can find. But never let that scare you. Most of the altcoins are only an alternative version of Bitcoin, but with a bit of tweak on them; hence the name. Some of the altcoins are using different algorithms like for instance, Factom is an altcoin that’s using PoS or Proof of stake. Here, there are no miners, only stakers.
These are individuals who are verifying transactions in exchange of rewards, much like miners. Rather than verifying blocks before anyone else, they’re chosen one by one and taking turns.
Tokens
Among the three, some consider this as being the most interesting. These are totally unique that they don’t have blockchain of their own. They’re being used on decentralized applications or dApps. These are dApps are made to make use of smart contracts which is the reason why they are using tokens.
