10 Must Have Cryptocurrencies In 2022.
Since Satoshi Nakamoto launched the Bitcoin whitepaper in 2008, the market has experienced unprecedented growth. Beyond that, the world of cryptocurrencies is always evolving, and tomorrow may see the launching of the next great digital currency. Though Bitcoin is usually regarded as a pioneer in cryptocurrencies, experts evaluate tokens other than BTC using various methods.
Typically, cryptocurrencies are free from government manipulation and control. Nevertheless, this fundamental ecosystem component has come under question as cryptocurrencies have gained popularity. The cryptocurrencies fashioned after Bitcoin are collectively referred to as altcoins, and they have frequently attempted to promote themselves as modified or enhanced versions of Bitcoin. Although some of these currencies may have amazing features that Bitcoin lacks, no altcoin has yet to meet Bitcoin’s network’s level of security.
See also: Decentralized Finance (DeFi) vs Centralized Finance (CeFi).
What Is Cryptography?
The prefix crypto- refers to “cryptography,” a technology that protects and conceals information from intruders. Cryptography is the art of safeguarding information and communications via codes so that only the intended recipient can comprehend and interpret the information. Consequently, preventing unwanted access to data. The prefix “crypt” signifies “hidden,” and the suffix “graphy” means “writing.”
Cryptography enables the verification and exchange of digital assets without requiring a trusted third party. During World War II, the Allies employed cryptography to send and receive secret messages. Cryptography dates back to the reign of Julius Caesar. The advent of computers allowed for significantly more advanced cryptography. However, the objective remains the same: to convert a readable message (plain text) into something an unauthorized reader cannot comprehend (ciphertext).
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Types of cryptocurrencies.
While all cryptocurrencies have nearly identical characteristics, most of them have distinct functionality. For example, Bitcoin is used as a payment method, while altcoins such as Ethereum are used to build dapps. Ethereum was never intended to be used as a digital currency. Instead, it was created as a massive platform for developing blockchain-based applications.
Ethereum introduced smart contracts into the industry. A smart contract can execute transactions automatically when specific conditions are met. These ‘items’ (also known as conditions) are included in the smart contract at the time of its creation.
Is Bitcoin Different From Ethereum?
Bitcoin and Ethereum are both cryptocurrencies; however, while Bitcoin eliminates the need for a third party in direct payments, Ethereum, via smart contracts, removes the need for a third party in several kinds of transactions, such as the sale of assets, lending, borrowing, etc.
Three Major Types of Cryptocurrencies.
There are three broad classes of cryptocurrencies;
1. Bitcoin
2. Altcoins
3. Tokens
Bitcoin
Bitcoin (BTC) currently has a market valuation of over $556 Billion, making it the most valuable cryptocurrency globally. Bitcoin is a global peer-to-peer electronic payment system that eliminates the need for intermediaries such as banks. The Bitcoin whitepaper, a document that outlines how this currency operates, was published in 2008, marking the debut of this groundbreaking new currency. Since its inception, the Bitcoin network has never encountered a period of outage, allowing value transfers at any time.
The identity of Satoshi Nakamoto, the pseudonym employed by Bitcoin’s creator, remains unknown. Also, it is unclear if Nakamoto represents a single individual or a group of people that collaborated on the Bitcoin project.
Bitcoin is commonly viewed as an alternative digital investment to fiat cash and gold. Bitcoin is a good store of value, similar to gold because it can be spent and saved exactly like traditional currency.
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Altcoins
Since the “open source” release of Bitcoin in 2008, hundreds of new cryptocurrencies have been developed. As Bitcoin alternatives, these new currencies are known as “Altcoins.” While some alternative cryptocurrencies perform similar functions to Bitcoin, others have a variety of uses. Using Ethereum, for instance, the first programmable blockchain globally, it is feasible to develop and deploy decentralized applications (DApps) and smart contracts.
All alternative cryptocurrencies, including Bitcoin, use distributed ledger technology to operate autonomously on their networks (DLT). Blockchain technology, which Satoshi Nakamoto introduced via Bitcoin, is the most well-known and widely-used category of Digital Ledger Technology (DLT). The underlying coding of each protocol distinguishes altcoins from one another, even though they all utilize the DLT standard.
Tokens
The third major type of cryptocurrency is a token. Tokens are cryptocurrencies that lack their own blockchain, and they are wholly distinct from the other two major types of cryptocurrency.
They are usually built on decentralized applications (dApps), applications built on blockchains such as Ethereum and NEO. Because dApps are designed to utilize smart contracts, they use tokens.
However, their tokens need not reflect a physical entity, such as energy or a house. Instead, they can be used to purchase items on the dApp. Alternatively, they can be utilized to obtain specific benefits, such as decreased fees and voting fees.
Tokens may be sold for a price, so some individuals purchase them to resell them for a profit rather than using them on the decentralized application.
10 Must-Have Cryptocurrencies In 2022.
1. Exchange tokens: Exchange tokens are cryptocurrencies generated by exchanges for use primarily on their trading platform and services. Binance Coin, Huobi Token, and KuCoin are a handful of examples.
2. Cryptocurrency built on the Bitcoin Protocol: Numerous cryptocurrencies are based on the Bitcoin protocol, which explains why they are so widespread. Among the most prominent cryptocurrencies are Litecoin and Bitcoin Cash.
3. Cryptocurrencies based on functionality: Ethereum, the most well-known platform-based cryptocurrency, is commonly recognized as the second most valuable cryptocurrency after Bitcoin due to its use of smart contracts and decentralized applications. As the defi space expands and more companies adopt DAOs, Ethereum is a must-have.
4. Stablecoins: Stablecoins are cryptocurrencies that seek to maintain a consistent price by pegging their value to that of a fiat currency or other asset (for each token mined, a dollar is deposited in a bank account). By tying prices to stable assets like fiat currency, price volatility is considerably decreased. Tether, Dai, and USD Coin are among the most prominent examples.
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5. Pure Currencies: These are currencies that act as mediums for exchanging goods and services. BTC is one of these cryptocurrencies; Ripple was designed for international transactions, and BCH (Bitcoin Cash) was designed to be considerably faster and cheaper than Bitcoin. Litecoin was also designed to make transactions faster than Bitcoin.
6. Blockchain Platforms: These cryptocurrencies work as blockchain platforms with smart contract capability, allowing decentralized applications to run on them. Popular examples are Ethereum, EOS, CARDANO, Vechain (VEN), NEO, and Stellar Lumens XLM.
7. Ecosystem Coins: The objective of Ecosystem Coins is to strengthen and simplify the Blockchain ecosystem. These coins include Nebulas (NAS), Waves (which allows developers to create their tokens), SALT (which enables users to cash out loans using their cryptocurrencies as collateral), Chain Link (which connects the digital cryptocurrency world to the real world), Ethos, Aion, and others.
8. Privacy coin: This category of coins tries to provide total or optional anonymity for transactions by concealing the identity behind a Bitcoin address. Among them are Monero, Zcash (ZEC), Verge (XVG), Bytecoin (BTN), Bitcoin Private (BTCP), Komodo (KMD), and NAVCOIN (NAV).
9. Gaming and Gambling coins: They are focused on the gaming industry. E.g., Storm Token (STORM), Funfair (FUN), Decentraland (MANA), The Sandbox (SAND), etc.
10. Social Network Coins: There is a need for security and privacy on social networks since these social networks are managed by a centralized organization, leaving information and data susceptible. With these tokens, individuals will not only be able to protect their data, but they will also be able to profit while they utilize social networks. These coins include RDD Reddcoin, Steem (STEEM), and Mithril (MITH).
