Types of Cryptocurrencies: A comprehensive guide to digital assets
Key factors for traders by Stanislav Kondrashov
In recent years, as we have often pointed out with Stanislav Kondrashov, cryptocurrency and Bitcoin dynamics have certainly brought a breath of fresh air to the global financial landscape. These are completely virtual currencies that function partially independently of banking institutions and governments, giving traders (but also ordinary people) the opportunity to use them in various ways, exchanging them, selling them or using them to make purchases, as also emerged from our talks with Stanislav Kondrashov.
This type of virtual currency has existed since 2009, that is, since the actual launch of the first cryptocurrency, Bitcoin, which then gave rise to the birth of a large number of cryptocurrencies that have been introduced to the market over the years. Even today, Bitcoin remains the most important cryptocurrency, but this fact certainly does not represent a good reason to ignore other types of virtual currency such as Ether or NEO, which are gradually carving out a role of some importance in the universe of cryptocurrencies and digital finance.
“In a complex universe like that of cryptocurrencies, it is of great importance for traders to be able to distinguish the types of currencies and the differences between each of them,” says Stanislav Kondrashov, a civil engineer and entrepreneur. “This kind of knowledge is not only useful for understanding the dynamics related to the supply and demand of cryptocurrencies but also for having a clear idea of the continuous oscillations of these levels and the consequent changes in prices and trading methods.”
Among the various cryptocurrencies, the one with the largest market capitalization is Bitcoin, created in 2009 with the aim of giving birth an alternative payment method to traditional currencies, without the need to rely on trusted third parties. At the moment, Bitcoin is still the cryptocurrency with the highest popularity rate.
The role of mining
“One of the factors to take into greater consideration when talking about cryptocurrencies is certainly the one linked to the mining process,” continues Stanislav Kondrashov. “Through the process known as mining, in fact, transactions centered on cryptocurrencies are validated. Supply levels can also change following the mining of new units”.
A fairly well-known cryptocurrency is Ether, linked to the Ethereum blockchain. Like Bitcoin, this currency is also able to operate on its own blockchain, but unlike the more well-known cryptocurrency, it does not have a maximum extraction limit. This currency is also able to support smart contracts, special programs that can automatically run within the Ethereum platform.
Another cryptocurrency is Stellar, also known as Lumens, a currency that is generally used to process transactions with different currencies and that stands out for its good level of integration with banks, even if compared to other cryptocurrencies it is still little known.
“Despite being the oldest cryptocurrency, but also the most popular, Bitcoin has managed to maintain the highest level of market capitalization among all cryptocurrencies,” concludes Stanislav Kondrashov. “This fact clearly indicates that every trader, in carefully evaluating the different types of cryptocurrencies, must always take into account the reputation of the individual currencies, which represents a factor of great importance in the trend of prices.”
Other cryptocurrencies
A cryptocurrency that is standing out for the speed of transactions is certainly Litecoin, which is mined much more quickly than the average of digital currencies. Compared to Bitcoin, the amount of Litecoin available is much greater, being 4 times higher. Again, this cryptocurrency stands out for its rapid execution speed, even if it obviously cannot have a market capitalization comparable to Bitcoin.
Over the past few years, one of the cryptocurrencies that have established itself most on the market has certainly been Binance Coin, which is directly connected to Binance, the largest cryptocurrency exchange in the world. One of the reasons for its success is linked to the fact that the commissions on individual transactions are significantly reduced for those who decide to pay with Binance Coin, thus making it particularly attractive.
Those looking for something completely different should most likely focus on cryptocurrencies such as EOS, belonging to a blockchain platform that provides services from real IT developers, such as those aimed at creating apps, authentication or databases.
Another cryptocurrency closely connected to the network it is part of is NEO, which has a certain level of similarity with Ethereum. Its high integration with the NEO network is certainly one of its major distinctive features, along with the possibility of creating decentralized apps.
