It’s easy to get overloaded with information in crypto. This is true especially as a beginner in the space. Questions like “what is cryptocurrency?”, “what is the blockchain?”, and “what is Ethereum?” can make your mind go crazy.
Let’s take a step back and not get ahead of ourselves. It’s best to take things bit by bit. For starters, there you need to understand not all cryptos are the same.
The type of cryptocurrency matters. Follow us as we guide you on your crypto quest.
Ready to jump down the rabbit hole and discover the different crypto categories? Read below to expand your knowledge.
Crypto for Payment
Use these cryptocurrencies for payments as you normally would with cash or a card. Use these cryptos for good and services, paying bills, or cashing out with fiat.
Technically every cryptocurrency can be used for payment. With that said, not every type of cryptocurrency is accepted as payment. The most popular to date for payment are Bitcoin, Bitcoin Cash, Litecoin, and Dash.
Aside from their mass appeal, their high selling point is low transactional fees and fast block times. As crypto becomes more mainstream, the adoption to accept as payment will increase as well.
A step further in our beginner’s guide to cryptocurrency are blockchain platforms. You can think of these platforms more as blockchain economies.
The reason they are blockchain economies is that you can create on top of them. You can create digital assets or tokens, decentralized apps (dApps), and so on.
Some of the most common blockchain economies are Ethereum, Ethereum Classic, EOS, NEO, and Tron. If you’re wondering where to buy Ethereum, we’ve got you covered.
You may not want your transactions being so public on the public. If privacy is a concern for you, you will want to do your research on privacy coins.
The beauty is that within private transactions, only sender and recipient can see certain information. For example, the total number of coins during transactions, addresses, and amount of transactions will be hidden from the public eye.
Bitcoin on the other hand uses a standard public blockchain.
Examples of privacy coins include Monero, Zcash, PIVX, and Pirate Chain.
Another type of cryptocurrency is the utility token. These utility tokens run on blockchain platforms. Some examples include ERC20, TRC10, and TRC20 tokens.
One example of a utility token is BAT or Basic Attention Token. Through the Brave Browser, users are rewarded BAT for viewing ads. This is a new advertising model now available through crypto.
More examples of this type of cryptocurrency are GNT, Civic, OMG, and 0x.
When comparing Bitcoin vs Ethereum, people always bring up the volatility of cryptocurrencies. Comparatively, stablecoins are popular amongst traders.
Stablecoins are pegged to fiat currencies such as USD. The purpose is to maintain a stable price and prevent a financial loss.
Some popular stablecoins to date are USDC, PAX, Gemini, DAI, and Tether.
What’s Your Favorite Type of Cryptocurrency?
As you can see there are many categories for cryptocurrency. Do you have a favorite type of cryptocurrency yet? As you learn more about this new market, the onion’s layers will present themself.
Be sure you keep up with all the financial news. Wondering where to find it? Head on over to our blog and we’ve got you covered!