What Are Different Types of Cryptocurrency? 5 Coins That You Should Know About
- By Localcoin
- November 26, 2021
At Localcoin, our mission is to provide a simple, secure buying and selling experience of digital currency for customers across North America. From running North America’s largest Bitcoin ATM network to our online retail platform, we are constantly seeking to innovate in the blockchain infrastructure space. Welcome to our blog, where customers can educate themselves on the world of cryptocurrency, learn more about our company vision and more!
Let’s Look at Different Types of Cryptocurrency!
As you start learning about cryptocurrency, you can easily find yourself overwhelmed by the seemingly endless list of crypto coins. From stablecoins to memecoins, there are thousands of digital tokens out there that make up this growing marketplace. With so many coins to choose from, it’s common to experience option paralysis. Plus, it would be nearly impossible to get familiar with every single coin as more are being created every day. We’re here to tell you that you don’t need to know all of the coins — familiarizing yourself with a handful of important coins is a great way to get started in the world of crypto. Let's check out, what are the different types of cryptocurrency.
Browse This Content:
- What is Bitcoin?
Bitcoin Quick Facts - What is Ether?
Ether Quick Facts - What is Litecoin?
Litecoin Quick Facts - Here’s How to Buy and Sell Bitcoin, Ether and Litecoin
- What is Dogecoin?
Dogecoin Quick Facts - What is Tether?
Tether Quick Facts
What is Bitcoin?
Launched in 2009 by an anonymous individual or group under the pseudonym “Satoshi Nakamoto,” Bitcoin was created largely in response to the 2008 financial crisis. This crisis illustrated the potential risks that come with relying on banks as intermediaries in all financial transactions.
Bitcoin was the world’s first cryptocurrency coin — one that currently operates free of mediation from governments or banks. It was also the first digital token to operate using a peer-to-peer verification system via a technology called blockchain. Blockchain technology is used by Bitcoin as a decentralized, fully transparent ledger. Bitcoin miners use a proof-of-work system to mint new coins into existence by verifying transactions and adding them to the blockchain; this is essentially how Bitcoin is able to operate securely without third-party intermediaries. The success of Bitcoin has inspired thousands of different types of cryptocurrency into existence.
Bitcoin Quick Facts
- As of October 2021, Bitcoin is the largest cryptocurrency coin by market capitalization at 1.193 trillion.
- There is a total of 21 million Bitcoins to be mined and over 18 million have already been mined as of October 2021. The rate at which Bitcoins can be mined reduces over time, so the last coin won’t be mined until the year 2140.
What is Ether?
The cryptocurrency associated with the Ethereum network, better known as Ether, is the second largest cryptocurrency to Bitcoin as of October 2021. Launched in 2015, the creation of the Ethereum network was inspired by the decentralized nature of Bitcoin, and the possibilities for its adoption outside of just the world of finance.
Unlike Bitcoin, Ethereum was not created with the intention of simply being an alternative medium of exchange; Ethereum is actually a blockchain-based platform for software developers to create decentralized apps (dapps) executed by smart contracts. Ether was then created as a method of payment for the platform. Similar to Bitcoin, Ether uses a proof-of-work system to mint new coins.
Simply put, smart contracts are hard-coded, self-executing agreements that define rules and penalties and automatically enforce them. On the Ethereum network, these are written in their native coding languages Solidity and Vyper. Smart contracts can be used to exchange anything of value from money to properties, and to run decentralized apps.
Ether Quick Facts
- Individuals must pay to perform a transaction on the Ethereum network using “gas”: smaller denominations of Ether known as gwei. The price of gas is set by miners based on the supply and demand for the computing power needed to process transactions.
- In 2017, a game on the Ethereum blockchain network called CryptoKitties became so popular that it significantly slowed down transactions on the Ethereum network.
Click and learn more how to buy ethereum in Canada.
What is Litecoin?
Launched in 2011, Litecoin is one of the earliest crypto coins. The creator deemed it “the lite version of Bitcoin” in response to comparisons made between the two coins. As a result, Litecoin operates very similarly to Bitcoin: there is a set amount of Litecoin that can be mined (84 million) by miners using a proof-of-work system used to mint new coins on the blockchain. So, what sets them apart?
Most notably, verifying Litecoin transactions requires less computational power than Bitcoin transactions, which can lead to faster confirmation times. Litecoin uses a different type of cryptography called scrypt that favours speed over computing power, making it possible for an individual to use a personal computer to mine Litecoin.
Litecoin Quick Facts
- Litecoin was created by a former Google engineer named Charlie Lee.
- The Litecoin network is set to distribute 84 million coins into circulation: four times as many coins as Bitcoin.
Here’s How to Buy and Sell Bitcoin, Ether and Litecoin
One of the easiest and most secure ways to buy and sell these coins is through a crypto ATM. Localcoin ATMs offer an accessible and user-friendly way for anyone to buy and sell cryptocurrencies in their communities. This is especially meaningful for beginners who are seeking a hassle-free way to dive into the world of digital currency with confidence! Newcomers and experts alike can easily access Localcoin ATMs when and where they need to. As Canada’s largest Bitcoin ATM network with more than 700+ terminals across Canada and the U.S, it’s never been more convenient to buy and sell cryptocurrency.
Click and find a Localcoin Bitcoin ATM in Canada!
What is Dogecoin?
What are the types of cryptocurrency? The next one is Dogecoin! Dogecoin is probably the world’s most recognizable “memecoin”: a parody coin centered around a popular internet meme. This coin was created in 2013 using the same technology and cryptography as Litecoin with the most notable difference being an unlimited supply of Dogecoin. This coin originally sold for just fractions of a penny before skyrocketing in value, primarily thanks to shout-outs from Tesla founder Elon Musk. Outside of celebrity endorsement, Dogecoin creators believe that the success of the coin can also be attributed to the light-hearted and inclusive Dogecoin community — a stark contrast to the other so-called “elitist” cryptocurrency communities.
Dogecoin Quick Facts
- As of October 2021, Dogecoin is one of the top ten crypto coins by market capitalization and it is far easier to buy dogecoin using ATM.
- In April of 2021, Dogecoin was in such high demand that it crashed trading the popular platform Robinhood.
What is Tether?
Tether is another blockchain-based cryptocurrency with a key difference that separates it from other types of cryptocurrencies. Created in 2014, Tether was the first “stablecoin” introduced to the crypto markets. It was created with the intention of giving crypto users the ability to transact USD across the blockchain without the same volatility experienced with many other crypto coins, hence the term “stablecoin”. Theoretically, Tether can help traders avoid large swings in the crypto markets by exchanging their coins for Tether instead of pulling them out of the markets completely for USD.
The coin is called “Tether” because the price of Tether tokens is anchored to the US dollar. According to the operators of Tether, the conversion rate between the coin and the U.S dollar is 1:1 as every Tether coin is backed by a dollar in their reserves. This claim is a controversial one: questions around Tether being used to manipulate the price of Bitcoin prompted an investigation by the New York attorney general who allegedly found that Tether was in-fact not 100% backed by reserves.
Tether Quick Facts
- As of October 2021, there are over 69 billion Tether coins in circulation.
- In April 2019, court documents revealed that Tether’s parent company allegedly used Tether funds to cover a $850 million dollar loss.
Learn More About Cryptocurrency on The Localcoin Blog!
Now that you’re familiar with some of the most relevant types of cryptocurrency including stablecoins and memecoins, you can engage in the world of cryptocurrency with more knowledge and more confidence! Interested in learning more about cryptocurrency? Check out our comprehensive cryptocurrency guide here.
