What Is Bitcoin and Other Types of Cryptocurrencies?
Usually, people use the term “Bitcoin” when talking about cryptocurrency. However, apart from Bitcoin, there are thousands of other digital currencies that you should know about. The essential reason why Bitcoin is the most referred to cryptocurrency comes down to the fact that Bitcoin was the first major cryptocurrency to be introduced in the market back in 2009.
Read on to learn more.
Bitcoin – The First Cryptocurrency
If you are new to the world of digital currencies, then you should understand the basics first by understanding what is bitcoin and its specialties. Bitcoin has been designed as a virtual currency that can be used as a form of payment, which is under no control of a group, entity, or person. The absence of control eliminates the need for the involvement of a trusted third party, such as a bank, during financial transactions.
The popularity of Bitcoin has been the underlying inspiration for the development of other digital currencies. Anyone can use Bitcoins for investing purposes, buying assets, or exchanging value. However, Bitcoin carries some sort of risks, such as fraud and market volatility.
Ethereum – The Second Major Cryptocurrency
Ethereum is the second major cryptocurrency that people are most likely to acknowledge or recognize in the world of cryptocurrencies. Similar to Bitcoin, Ethereum is an open-source, decentralized blockchain platform that allows users to create dApps and smart contracts. You can use Ethereum to run and build applications without the mediation of third parties.
The network of Ethereum uses its own native cryptocurrency, which is referred to as Ether or ETH.
Tether – The Stablecoin
The underlying reason why tether is also referred to as the stablecoin is that the price of each tether coin is $1.00. Stablecoins are linked to the value of the American dollar. With that said, this cryptocurrency serves as a medium when cryptocurrency traders move from one cryptocurrency to another. This means that at the time of moving from one cryptocurrency to another, potential traders use Tether instead of moving back to dollars.
BNB – The Token for Discounted Trades
BNB was originally issued by Binance. In case you don’t know anything about Binance, you should know that it is one of the world’s largest crypto exchanges. Essentially, BNB was created to serve as tokens for discounted trades; however, today, this cryptocurrency is used for buying services, goods, and as a means of payment.
USDC – The USD Coin
Similar to its counterpart, Tether, the USD Coin serves as a stablecoin that is fixed to the dollar. The value of the USD coin doesn’t change. The founders of this cryptocurrency state that their coin is backed by “fully reserved” assets that carry equally fair value. The founders also state that those fair-valued assets are kept in accounts of legally regulated U.S. organizations.
Other Cryptocurrencies to Know About
Apart from the cryptocurrencies that we mentioned above, you should also know about TRX, SOL, XRP, ADA, and Hyperliquid. BCH or Bitcoin Cash is also a cost-effective alternative to Bitcoin itself.
