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The Different type of Crypto Currency that exist

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Written by   70
11 months ago

This article is only for beginners or rookie of crypto industry.

You must be wondering or too confused sometimes because you couldn't understand some of words that was been talk in article you read about crypto currency, mostly there is some kind of words that was too complicated to understand by just reading even its fully explain in due to the fact there is some you don't even know what that words means well its okay I hope this article could help you in a way.

Credits to gamblingsites.com

Lets get start to get knowledge first about crypto currency

Crypto Currency are the currency that was digital or virtual which is secured by cryptography that makes it nearly impossible to counterfeit.

cryptography means "the art of writing (encrypting) and solving (decrypting) 
information for purpose

There is a different kind of Crypto Currency as of now which is define and differentiate with own purpose but we will talk for now here the 3 major kinds of it which is Volatilecoin, Stablecoin, and CBDC.

Bitcoin right now is the most popular among this crypto currency which is consider 
be where it began all or lets say the bitcoin is the father of this industry 

Before we proceed lets know first some words you could meet in this article to take notes to fully understand it

Volatile (Volatility)

basically means how much the value of an asset changes over time. A highly volatile asset like Bitcoin can see its price move dramatically in only a few hours. The opposite of volatility is stability.

Centralized

  • control of an activity or organization

  • concentrate under a single authority

Decentralized

  • to distribute the administration power or function

  • the transfer of authority and responsibility

DeFi

  • short for decentralized finance

  • term for variety of financial application in crypto currency or blockchain geared

blockchain

  • is a technology that recording a list of record of transaction for crypto industry

Nodes

A series of computers that work to maintain a blockchain network

Ledger

a database that is shared and synchronized across network spread across multiple points

P2P

Peer to peer

Fork

a copycat or created same with original but doing a different path to the original

This are the first type of crypto currency that exist in industry that was begin with bitcoin called a volatilecoin.

Volatilecoin is type of crypto currency that never stay in same price for too long means is type of digital currency that was volatile in price or its change price in just few seconds.

  • They're anonymous (sort of) - cryptocurrencies can be designed so that no one can see who you are or what you're spending your crypto on.

  • They're not controlled by a government - People in unstable countries where currencies are volatile can use cryptocurrencies as an alternative way to buy goods and services.

  • They're borderless - just like the internet, cryptocurrencies can go anywhere.

  • They're secure - distributed ledgers are very difficult to hack.

  • Lower transaction fees - while some cryptocurrencies have fees as part of their transactions, they tend to be cheaper than what it costs to move money across borders in the real world.

  • They can be used for contracts - cryptocurrencies aren't just used as a form of money. They can be used to create contracts between people, or transfer resources that were previously difficult to quantify using regular money.

Here are some examples of volatilecoins that exist before and still standing right now.

ccredit to Pinterest.com

Bitcoin’s original purpose - as laid out in the original paper published by Satoshi Nakamoto was to be a decentralised payment method.

It is an Innovative payment network and kind of currency that solely exist in digital and internet (no physical form . It was invented in year 2008 but launched at early year 2009 and get a footing stance as being rank one in world market for crypto currency till now.

There is over 100,000 websites that use bitcoin as means of payment but for some reason there is some nations which is it illegal.

The definition of illegality is different in each country.

  • 🇩🇿 Algeria - Banned from purchase, sale, use and holding of Bitcoin.

  • 🇧🇴 Bolivia - Banned any currency not regulated by a country or economic zone.

  • 🇪🇨 Ecuador - Banned any currency competing with the country’s own digital money.

  • 🇧🇩 Bangladesh - Jail-able offence under anti-money laundering laws.

  • 🇳🇵 Nepal - Jail-able offence.

  • 🇵🇰 Pakistan - In the process of being illegal under the Prevention of Electronic Crimes Act.

  • 🇰🇭 Cambodia - Not recognised or accepted by National Bank of Cambodia.

  • 🇮🇩 Indonesia - Illegal as a payment tool.

  • 🇻🇳 Vietnam - Illegal as a payment tool.

  • 🇲🇰 Macedonia - Jail-able offence.

credits to pinterest.com

If Bitcoin is the floppy disk of blockchain, Ethereum is the CD: it’s an evolution of the technology. What bitcoin proved was that a currency could be created by a community, and sent and received by anyone with a cryptocurrency wallet.

credits to piniterest.com

Litecoin is a P2P crypto currency that was design to be quicker at processing transactions.

  • 💨Super speedy. With Bitcoin, the average amount of time it takes to create a block in the blockchain is 10 minutes. With Litecoin it takes just 2.5 minutes.

  • ☕Designed for the everyday - it was designed for small transactions, like buying coffee and, thanks to its faster processing speeds.

  • ⛏️It uses a slightly different mining method to producing currency than Bitcoin.

ccredit to pinterest.com

well should I still need to explain this? since as user of read.cash I don't think there still no one left here that didn't know what is this you could read an explanation of this token or coins everyday here in read.cash but for outsider this is some brief explanation about it.

It was a fork of bitcoin network that was successfully stands alone now.

Bitcoin Cash is a version of Bitcoin but with several key differences. The biggest is the blocksize - which corresponds to how many transactions a block can contain. In Bitcoin the blocksize is 1MB, where as on Bitcoin Cash it’s 8MB. That means each block on Bitcoin Cash can hold eight times more information - and therefore can verify transactions more quickly. Subsequently, it further increased its block size to 32MB in May 2018, giving it more of an advantage in that field.

Another key difference is the transaction costs - the amount of money miners charge to verify each transaction. This is a feature of both networks, however Bitcoin Cash tends to have lower transaction costs, thanks to the higher amount of data that can go into each block.

There is a lot of volatilecoin you could see and meet right now but there is only some who get footings in world market to be top in list.

Lets move now on the second type of crypto currency which is called stablecoin.

Stablecoin is type of crypto currency that set to have a low volatility which means gain a stability in value of assets or units of accounts to be stored. it also type of crypto currency that was being pegged by fiat money or assets that had value to ensure its stabilty.

There is different type of Stablecoin crypto currency

  1. Centralized stablecoins

  2. Gold backed stablecoins

  3. Algorithmic stablecoins

Centralized Stablecoins

are stablecoins which are backed by real money or fiat currency

Example of this Centralized stablecoins are

Credit to pinterest.com

is one of the first stablecoins and the most famous. It claims it is backed by a reserve of real dollars—"collateral"—that is "off-chain," i.e. in a real-world location that is controlled by a centralized third party

Credits to Google images

purpose-built to bring the value of the U.S. dollar into the modern digital era.

ccoingecko.com

Paxos dollar (PAX) is a digital dollar like other crypto assets, it can move instantaneously, anywhere in the world, any time of any day, and it's programmable.

a stablecoin fully backed by the US dollar.

common.wikipedia.com

The petro is a cryptocurrency developed by Venezuela. The government claims it is backed by the country’s oil reserves, among other valuable commodities, like gold. At its heart, it’s an attempt to create an alternative to the hyperinflationary Venezuelan bolivar. The coin has been airdropped to young people and doctors in the country, but there's been criticism that it functions as a tool of mass surveillance, and that there are discrepancies between the official government price and the reality on secondary markets.

coingecko.com

Ripple is the project behind the cryptocurrency called XRP, but the way it works and runs is very different from other currencies like Bitcoin and Litecoin.

There are two parts to Ripple: Ripple as a cryptocurrency (XRP), and Ripple as a company designed to help banks move money quickly and cheaply.

  • 🏦 It’s a service for banks - it has been helping banks connect to each other via its network.

  • 💱 It bridges cryptocurrency and traditional banking - by using its own currency as a go between to exchange dollars and pounds in to cryptocurrencies.

  • 💨 It’s super fast at moving money. It only takes 3.5 seconds for money to be confirmed, and can process 1,000 transactions per second, the same amount of transactions as Visa can. Bitcoin, by comparison can process just 7 transactions per second.

  • 💸 It’s really cheap to move money - it’s a lot cheaper for banks to move money using Ripple than using existing technology.

  • ⚡It uses less power - because no mining takes place, it’s more energy efficient

  • 🎯It’s centralised - Banks act as nodes on the network, giving them more control over transactions.

Gold backed stablecoins are coins that was collateral by gold

CACHE gold (CACHE) is among the most popular of these. Each CACHE is backed by 1g of pure gold held in the vaults stored around the world. Sending CACHE tokens is the equivalent of sending 1g of gold per token since they can be easily redeemed for physical gold at any time.

There’s also Tether Gold (XAUt) and PAX Gold (PAXG), which operate in a similar way, but are instead pegged to one troy ounce of investment-grade gold. They also have a higher minimum redemption amount than CACHE.

Algorithmic stablecoins are types of assets that was decentralized or lets it sat decentralized coins type of stablecoins

Here are some sample of Algorithmic stablecoins

Terra (LUNA) is a decentralized stablecoin, which means rather than relying on a trusted third party it uses a complex algorithm to keep stable. To do this, it balances “on-chain” reserves—i.e. the funds are held in smart contracts—with supply and demand automatically, mitigating the chances of traders accidentally—or intentionally—fiddling the price.

Ampleforth (AMPL) relies on a similar process. Instead of physically backing each AMPL with 1 USD, it instead uses a process known as a “rebase” to automatically adjust the circulating supply of the cryptocurrency in response to changes in supply and demand. If the price of AMPL is more than 5% above or below the USD reference price, then it will increase or decrease the circulating supply in an effort to push the price back towards $1. Since this rebase is proportional across all wallets, AMPL holders always maintain their share of the overall AMPL network.

AS YOU CAN SEE ABOVE INFORMATION WAS CLEARLY STATING THAT STABLECOINS ACHIEVE 
THERE PRICE STABILITY THROUGH:
 > COLLATERAZATION
 > BACKING BY FIAT CURRENCY
 > ALGORITHMIC MECHANISM

The last type of crypto currency are CBDC " Central Bank Digital Currency". this type of crypto currency is project by the government of a nations due to the fact they are not trusting the existed crypto currency because of its volatility and also they can't get a hand of authority in existed crypto currency.

The country that already exploring and having trial of it.

  1. USA

  2. Japan

  3. Europe

  4. Brazil

  5. China

  6. Russia

  7. Philippines

  8. Sweden

  9. Bahamas

  10. South Caribean Currency Union

  11. Marshall Island

and there some other country is already attempting to go with the circle too

Source

decrypt.co

wikipedia.org

investopedia.com

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