Types of Cryptocurrencies
Types of Cryptocurrencies
The world of crypto goes far beyond just Bitcoin. Thousands of digital assets exist today, each serving a different purpose. Here's a breakdown of the main categories of cryptocurrencies and what makes them unique:
Bitcoin (BTC)
Bitcoin is the original cryptocurrency, launched in 2009 by an anonymous entity known as Satoshi Nakamoto. It was designed to be a decentralized alternative to fiat money, enabling peer-to-peer transactions without a central authority.
Ethereum (ETH)
Ethereum introduced the concept of smart contracts — self-executing code that runs on the blockchain. It powers a wide range of decentralized applications (dApps), from finance to gaming and NFTs.
Utility Tokens
These tokens provide access to a specific product or service within a blockchain ecosystem. Examples include Chainlink (LINK) and Uniswap (UNI). They are often used for governance, rewards, or protocol fees.
Stablecoins
Stablecoins are pegged to stable assets like the US dollar to reduce price volatility. Common examples include USDT (Tether), USDC, and BUSD.
Other Categories
- Privacy Coins: Focus on anonymity (e.g., Monero, Zcash)
- Governance Tokens: Used to vote on project decisions (e.g., AAVE, COMP)
- Exchange Tokens: Native to crypto exchanges (e.g., BNB, OKB)
Each type of cryptocurrency plays a distinct role in the blockchain ecosystem. Knowing their differences helps you make better investment and usage decisions.