Digital currency is designed to work as a medium of exchange. There are many different types of cryptocurrency, but these nine are among some of the more well-known currencies.
One of the most commonly known currencies, Bitcoin is considered an original cryptocurrency. It was created in 2009 as an open-source software. The author of the whitepaper that established this digital currency was under the pseudonym Satoshi Nakamoto.
How does Bitcoin work?
Using blockchain technology, Bitcoin allows users to make transparent peer-to-peer transactions. All users can view these transactions; however, they are secured through the algorithm within the blockchain. While everyone can see the transaction, only the owner of that Bitcoin can decrypt it with a “private key” that is given to each owner.
Unlike a bank, there is no central authority figure in the Bitcoin. Bitcoin users control the sending and receiving of money, which allows for anonymous transactions to take place throughout the world.
2. Litecoin (LTC)
Litecoin was created in 2011 as a Bitcoin alternative. Litecoin, like other cryptocurrencies, is an open-source, worldwide payment network that is totally decentralized, which means it has no central authority.
What exactly is the difference between Bitcoin and Litecoin?
The following are some of the distinctions between these digital currencies:
Faster transaction times are said to be a characteristic of Litecoin.
Bitcoin has a 21 million coin limit, whereas Litecoin has an 84 million coin limit.
Litecoin uses the “scrypt” algorithm, whereas Bitcoin uses the “SHA-256” algorithm.
3. Ethereum (ETH)
Ethereum is a sort of cryptocurrency that was created in 2015 as an open source platform based on blockchain technology. While Ethereum blockchain concentrates on recording ownership of digital currency transactions, it also runs the programming code of any decentralized application, enabling application developers to utilize it to pay for transaction fees and services on the Ethereum network.
4. Bitcoin Cash (BCH)
Bitcoin Cash is a digital currency that was established to improve upon some of the characteristics of Bitcoin. Bitcoin Cash raised the block size, enabling for speedier processing of more transactions.
5. Ethereum Classic (ETC)
The Ethereum Classic blockchain is a fork of the Ethereum blockchain. It uses a similar decentralized infrastructure to handle smart contracts. Smart contracts are programs that function precisely as they are planned, with no downtime, censorship, fraud, or third-party interaction. It, like Ethereum, has a value token called “traditional ether” that can be used to pay for goods and services.
6. Zcash (ZEC)
Zcash is a cryptocurrency that was created using the Bitcoin code foundation. It was created on a decentralized blockchain by scientists from MIT, Johns Hopkins, and other prestigious academic and scientific organizations. The focus on privacy is a key feature and differentiator of Zcash. Users may send and receive Zcash without exposing the sender, recipient, or transaction amount, which is not a feature offered to investors on Equity Trust’s platform.
7. Stellar Lumen (XLM)
The Stellar Lumen is a currency that acts as a bridge between two different currencies. A person may transmit any money they hold to someone else in a different currency using Stellar. In 2014, Jed McCaleb built the open-source Stellar network and generated the network’s native currency.
8. Bitcoin Satoshi’s Vision (BSV)
Bitcoin Satoshi’s Vision (BSV) is the consequence of Bitcoin Cash’s hard fork in 2018. It is meant to be more similar to Bitcoin’s initial aim, namely decentralization and the use of bitcoin as a payment method.
9. Chainlink (LINK)
The Chainlink, which was launched in June 2017, was created to encourage a worldwide network of computers to give essential external data to smart contracts (contracts that execute when specific criteria are satisfied) that operate on top of blockchains.
Cryptocurrency With Tax Advantages?
Did you know that you may put money into cryptocurrencies via your IRA and possibly avoid paying taxes on any profits?