What is Cryptocurrency

What is Cryptocurrency

If you are new to the crypto industry, you might be wondering which startups are the best and how they differ from each other. In this review, we will try to explain the key peculiarities of the top 5 cryptocurrencies by capitalization. Let’s get down to business!

1. Bitcoin (BTC)

Bitcoin is the most famous virtual asset. Actually, this is also the first cryptocurrency. It isn’t controlled by any bank or other financial institution, which is one of the reasons why it’s so popular. Instead of being issued by the authority, BTC is mined by enormous computing powers. The community doesn’t know who founded this project because the developers remained anonymous. The concept of this cryptocurrency is to connect users via encryption keys.

The price of the BTC depends on the demand for this asset. Currently, it’s valued at around $20,485 with a market capitalization of almost $400 billion. The supply of bitcoins is limited to 21 million tokens. This triggers scarcity and increases the demand for this virtual asset. The lack of government authorization also makes Bitcoin a good instrument to hedge against inflation. Because of these similarities, Bitcoin is often referred to as “digital gold”. Currently, over 19 million coins have already been mined.

2. Ethereum (ETH)

Often, people don’t understand what Ethereum is and why we distinguish Ether. In fact, this isn’t as complicated as you might think. Ethereum is a big decentralized computer network while Ether is a digital token that runs within this ecosystem and powers it. In simple words, to invest in the Ethereum project, you need to buy Ether coins.

One of the main things to know about the Ethereum blockchain is the Ethereum Virtual Machine. This is a special digital environment where smart contracts are built and operated. This is also a space where users develop decentralized applications. Actually, Ethereum was the first blockchain network that introduced these innovations, which is one of the reasons it gained such popularity and got second place on the rating of cryptos by market cap (over $193 billion). But as of today, it isn’t the only such blockchain network. It’s curious to follow the competitions such as Litecoin vs Ethereum vs Cardano vs Algorand, etc.

Currently, there are more than 122 million Ether coins in circulation. Its price is around $1,500. You can either trade Ether or use it as a utility token within the Ethereum network to develop and operate decentralized applications.

In 2021, Ethereum also shocked the industries by introducing the concept of non-fungible tokens, also known under the NFT abbreviation. These are special digital tokens that record ownership and can be bought and sold on exchanges. NFTs are now being implemented in different industries but currently, they are known mainly as digital pieces of art.

Read Also: Lesser-Known Facts About Internet Banking

3. Tether (USDT)

All cryptocurrencies created after Bitcoin are called altcoins. Altcoins might be subdivided into different types, depending on their functions. For instance, you might consider investing in stablecoins. Tether (USDT) is the biggest one. 

How are stablecoins different from other cryptocurrencies? They are not as volatile because their prices follow the prices of fiat assets. Tether (USDT), for example, is pegged to the U.S. dollar. This means this cryptocurrency is less likely to fluctuate in its price. The Tether (USDT) market capitalization is over $69 billion, while its price is always around $1.

Tether (USDT) doesn’t have its own blockchain network. As an ERC20 token, it runs on the Ethereum blockchain. The price of Tether (USDT) is supposed to remain stable and can face severe volatility only if errors on the blockchain occur or when the dollar price goes too volatile because of global market conditions, which is quite unlikely.

4. Binance Coin (BNB)

Binance is one of the biggest cryptocurrency exchanges – spaces where you can buy and sell digital coins. In 2017, Binance issued its own cryptocurrency that is now traded under the BNB ticker symbol. With a market cap of over $50 billion, it takes the fourth position in this rating.

Similar to Bitcoin, the BNB supply is limited. In this case, 200 million coins can be in circulation. During the ICO process, 50% of this amount was offered to investors from outside of the project. BNB was initially designed on the Ethereum network. However, it was transferred to the Binance native chain after the introduction of this ecosystem. 

Binance Coin (BNB) is also used as a utility and reward token on the Binance exchange. As of the date of writing, BNB is valued at around $322.

5. USD Coin (USDC)

USD Coin (USDC) is one more stablecoin. Similar to Tether (USDT), USD Coin is pegged to the US dollar, meaning its price is $1, while the total market capitalization of this project is $43 billion. Similar to Tether, USD Coin was started on the Ethereum blockchain. However, unlike its main competitor, USD Coin expanded into the Solana and Algorand blockchain networks.

USD Coin has become such a popular cryptocurrency thanks to its high speed of transactions. Why is this so important? The fact is that transactions in US dollars cannot be prompt, users have to take their time until the operations are processed. Why? This is because transactions in the US dollar are processed by banks and other financial institutions. They have to deal with different procedures, which take quite a lot of time. As a result, the operations are slow. But when you use USD Coin, you exclude this problem because the transactions are processed within the decentralized ecosystem. At the same time, since USD Coin (USDC) is pegged to the dollar, the transacted amount doesn’t lose its value during the processing.


IITSWEB is the Chief Business Development Officer at IITSWEB, a Magento design and development company headquartered in Redwood City, California. He is a Member of the Magento Association and an Adobe Sales Accredited Magento Commerce professional. Jan is responsible for developing and leading the sales and digital marketing strategies of the company. He is passionate about ecommerce and Magento in particular — throughout the years his articles have been featured on Retail Dive, Hacker Noon, Chief Marketer, Mobile Marketer, TMCnet, and many others.

View all posts by IITSWEB →

Leave a Reply

Your email address will not be published. Required fields are marked *