• december 10, 2020
  • Sofian Houasnia

Categories Of Cryptocurrencies

Cryptocurrencies by Category As an alternative to selecting cryptocurrencies by market cap, the best way to truly diversify your portfolio, for both value and growth purposes, may be to go about selecting cryptocurrencies by category. After you’ve flipped through the categories and selected the finalists that best fit your risk tolerance, you can then move on to the advanced techniques. Here are some of the most popular cryptocurrency categories and the leading cryptos in each space. I cover these based on their popularity and total market cap as of 2022. The following sections describe just a few examples of many categories in the exciting cryptocurrency world; Other people may categorize these cryptos differently. Some popular cryptocurrency categories include the following:

Payment cryptos Payment cryptos are by far the biggest category in terms of total market cap. In this group, you find cryptocurrencies that mainly aim to be used as a store of value, transaction, and payments, just like fiat currencies like the U.S. dollar. Examples of cryptocurrencies that fall into this category include these:

  • Bitcoin (BTC)
  • Litecoin (LTC)
  • Bitcoin Cash (BCH)
  • OmiseGo (OMG)
  • Dash (DASH)
  • Ripple (XRP)
  • Tether (USDT)

With Bitcoin as the pioneer, no wonder this category started out so popular. But as I say multiple times throughout this book, blockchain technology can be applied to so much more than just payment systems, so be on the lookout for the next big thing within other hot categories!

Privacy cryptos Privacy cryptos are heavily focused toward transaction security and anonymity, a lot more than those in the payment category are. In fact, the idea that Bitcoin and other cryptocurrencies in the payment category are fully anonymous and untraceable is a common misconception. Many blockchains only disguise users’ identities while leaving behind a public record of all transactions that have occurred on the blockchain. The data in the ledger often includes how many tokens a user has received or sent in historical transactions, as well as the balance of any cryptocurrency in the user’s wallet. Privacy cryptos can be a bit controversial because authorities see them as an illicit tool that for criminals to engage in illegal activities, such as money laundering. Nonetheless, some of them have gained popularity. Here are some examples:

    Monero (XMR): Monero is the most famous privacy crypto as of 2018. Zcash (ZEC): Zcash is similar to Monero but has a different protocol (set of rules). Check it out here: CloakCoin (CLOAK): A lesser-known privacy crypto, CloakCoin has a number of added layers of security. See Dash (DASH): Also mentioned in the payment category, Dash is a bit of hybrid. In addition to Bitcoin’s core features, Dash also includes the option for instant and private transactions.

Platform cryptos Platform cryptos are also referred to as decentralized application protocol cryptos, smart contract cryptos, or a hybrid of all three. In this category, you can find cryptocurrencies that are built on a centralized blockchain platform; developers use them to build decentralized applications. In other words, such cryptocurrencies act as platforms where people build upon blockchain applications (and thus other cryptocurrencies).

In fact, some analysts suggest you may want to forget about payment cryptocurrencies and invest in crypto platforms instead. They’re generally considered good long-term investments because they rise in value as more applications are created on their blockchain. As blockchain technology becomes more mainstream, the number of applications and their usage will increase, along with the price of such coins. The most famous example in this category is Ethereum (ETH), NEO (NEO), Lisk (LSK), EOS (EOS), Icon (ICX), Qtum (QTUM), VeChain (VEN), Ark (ARK).

Sofian Houasnia

If you have an idea that you geniunly think its good don't let some idiots talk you out of it.