Top 10 Cryptocurrencies
A Brief Overview of the Nature of Cryptocurrencies
A cryptocurrency is a digital or virtual currency secured by cryptography, which makes counterfeiting or double spending almost impossible. Many cryptocurrencies are decentralized networks based on blockchain technology, a distributed ledger implemented by a network of different computers.
This decentralized structure allows them to exist outside the control of governments and central authorities.
There are thousands of cryptocurrencies on the market today. Each cryptocurrency claims to have different functions and specifications—for instance, Ethereum’s ether trades as gas for the underlying smart contract platform.
Banks use Ripple’s XRP to facilitate remittances between different regions. With that in mind, to fully familiarize yourself with digital currencies, in this article, we decided to introduce the features and capabilities of the top 10 currencies in the market.
1. Bitcoin
Bitcoin is the world’s first cryptocurrency, and its birth brought a massive revolution.
An anonymous person created the crypto in 2009. Some believe that the inventor of this virtual currency is a person named Satoshi Nakamoto. Today, it has become popular as a king in the crypto world.
Its popularity has inspired the development of many other cryptocurrencies. These competitors are either trying to replace it as a payment system or additional security tokens in other blockchain and emerging financial technologies.
Bitcoin (BTC for short) is a decentralized cryptocurrency sent peer-to-peer through the Bitcoin network without an intermediary. Instead, a network cryptographically verified transactions is recorded in a public distributed ledger called a blockchain.
All users connected to the Bitcoin network are nodes. In the network, each node is connected to multiple nodes.
The sender node generates a transfer request and signs it with its private key to transfer funds. This request is then sent to all connected nodes.
2. Ethereum
Ethereum is a blockchain-based network. It is a platform for running decentralized applications and smart contracts without the intervention of intermediaries.
Eth is a free and public system based on blockchain technology, which has its browser, programming language, and payment system. This currency does not have a single central controller, and thousands of systems voluntarily control it around the world.
This cryptocurrency does not have a single, central controller, and thousands of systems voluntarily control it worldwide. In response to the question of what Ethereum is, the network is entirely autonomous, and no person, organization, or institution is responsible for its management and control.
Ethereum wants to become a world computer to make the current “client-server” model more decentralized and popular. Using this currency, servers and clouds are moved by thousands of users, so-called nodes, which consist of volunteers from all over the world.
3. Tether
Tether is a cryptocurrency that its developers claim is pegged to the US dollar. It is a stablecoin priced around $1.
Tether, a Hong Kong-based company, in 2014, created tether. Its developers were Brock Pierce, Reeve Collins, and Craig Sellars. Brock Pierce is a well-known entrepreneur who founded several major cryptocurrencies and entertainment projects. Rio Collins was the chief executive officer (CEO) of Tether, who has already registered several successful companies. Collins also heads SmarMedia Technologies, an advertising and marketing technology company, as of 2020. Craig Sellars has been a founding member of the Omni Platform for over six years in addition to working on Tether.
The protocol allows users to create a smart contract based on common currency on the Bitcoin blockchain.
According to the statement, USDT is unique in that the token’s value equals the US dollar. In other words, each time a new cryptocurrency called USDT is created, the same amount of USD is added to the company’s reserves. Since cryptocurrencies are highly volatile in the market, using cryptocurrencies as a store of value is risky.
On the other hand, USDT avoids these fluctuations, and when you convert your cryptocurrency into Tether, you can rest assured that the value of your assets will remain stable.
This feature makes USDT a safe token for investors. To avoid losses, investors can convert their currency to Tether during the market crash and volatility. In addition, Tether is an easy way to trade US dollars between countries and continents using the blockchain without the interference of governments and financial institutions.
4. BNB
It is nearly impossible to be a digital currency enthusiast and not have heard of Binance, A title that reminds most users of cryptocurrency exchange. However, the name is not limited to the exchange platform.
Binance has a native currency called Binance Coin, which has become one of the most successful digital assets in a short time. BNB was created to provide discounts on Binance exchange trading fees, but its uses expanded over time. Binance Coin was initially developed in July 2017 on the Ethereum network using the ERC-20 standard. Early in the launch, a portion of the BNB tokens was distributed among various participants, including angel investors and the founding team.
Meanwhile, 100 million BNB were sold for 15 cents. In total, Binance raised about $15 million from the offering. Of the $15 million raised, 35% was allocated to upgrading Binance’s platform and trading system, 50% to branding, marketing, and training new employees, and the remaining 15% to reserve for emergencies.
Overall, Binance Coin is similar to other digital assets in the market; digital assets increase or decrease in value based on usage and transactions.
Users can store BNB in compatible wallets like other cryptocurrencies and send and receive it directly. Interestingly, BNB interacts with two blockchains, Binance Chain and Binance Smart Chain.
Binance Smart Chian is a network completely independent of Binance Chain but runs parallel to it. The smart chain provides users with various functions and facilities. One of the most important features is the support for smart contracts. Binance’s goal in building Binance Chain was to optimize the performance of the platform in conducting transactions.
5. USD Coin
USD Coin (USDC) is a relatively new stablecoin pegged to the US dollar. It was launched on September 26, 2018 in collaboration between Circle and Coinbase.
USDC is an alternative to other USD-backed cryptocurrencies such as Tether (USDT) or TrueUSD (TUSD). USD Coin is a service to tokenize US dollars and facilitate their use through the Internet and public blockchains.
Additionally, USDC tokens can be converted to dollars at any time. Circle guarantees that each USDC token is backed by one US dollar. The process of converting US dollars into USDC tokens is known as tokenization. The process of converting dollars to USDC is a three-step process as follows:
The user sends USD to the bank account of the token issuer
The issuer uses the USDC smart contract to generate the USDC equivalent amount.
The newly generated USDC is delivered to the user, while the replaced dollars are held in reserve.
USD Coin is a fast-growing project with reputable institutions behind it. Since the project was announced in 2018, its ecosystem has grown to more than 60 partners. Developers have the right to keep blocking addresses and assets if there is suspicion of using USD Coin for illegal activities.
6. XRP
Ripple is a platform that has its digital currency. Unlike other platforms, such as Bitcoin, it does not seek to eliminate financial intermediaries but rather to decentralize financial transactions.
Developers believe that the platform is designed and implemented for large transactions of banks and financial institutions so that transactions in the platform are completed quickly. Ripple also has tough competitors in this area.
Swift and Stellar are among these competitors. That’s why this coin was not created on a blockchain platform. So far, Ripple has offered three products for financial institutions: xcurrent, xrapid, xvia.
These three products are referred to as RippleNet. XRP digital asset is only used on the X-Rapid network and has no application in other products. It should be noted that most companies under the Ripple contract use its xcurrent product.
Ryan Fugger is the most prominent figure in the Ripple project. Fugger founded RipplePay in 2004. Fugger started a company in 2004 intending to transfer money from one place to another in the world using a peer-to-peer protocol. He describes the company as follows: RipplePay is a financial service that allows you to expand your credit and financial connections with your friends, family and colleagues and enjoy secure payments with traditional and online currencies. Unfortunately, due to some technical and managerial problems, the company failed to achieve its goals.
Finally, the cryptocurrencies team was completed with the joining of McCaleb and Chris Larsen. The arrival of McCaleb, the founder and CEO of Kraken Exchange, and Roger Ver, who invested in the project. In 2014, McCaleb left the team after an argument with Chris Larsen and joined the Stellar team.
7. Cardano
Cardano is a blockchain-based platform that enables the creation and execution of smart contracts.
Cardano is the pioneer of the third generation of blockchain, whose security is guaranteed by a multi-layered architecture. According to the Cardano team, network speed and transaction fees are much better than older blockchains like Ethereum. Moreover, Cardano is the first blockchain project developed with scientists’ scientific ideas and research.
The founder of Cardano is Charles Hoskinson, a member of the Ethereum team. To find solutions to the issues with Ethereum and Bitcoin, the Cardano project was introduced in 2015 and studied for two years.
Cardano has solved the scalability issues in Bitcoin and smart contracts in Ethereum by creating new processes for verifying transactions and creating blocks.
Unlike many other currencies like Bitcoin, which use proof of work to maintain network security and verify transactions, Cardano uses the Proof of Stake algorithm.
Proof of Work is a security algorithm designed to prevent cyber attacks. According to the algorithm, volunteers called “miners” help maintain network security and are rewarded by contributing the processing power of their computer hardware to the network.
The proof of work concept was used even before Bitcoin, but Satoshi Nakamoto, the anonymous creator of Bitcoin, innovatively used the technique. To operate a proof-of-work network, one person must own more than 51% of the total processing power of the network, which is economically unjustifiable in large networks like Bitcoin.
8. Dogecoin
Dogecoin is a popular cryptocurrency that was created as a joke. The currency, whose logo is a Shiba Inu dog and traded under the symbol Doge, was created by two computer engineers named Billy Marcus and Jackson Palmer through the Litecoin fork in 2013.
Billy Markus, one of the creators of Dodge, tweeted that he plans to launch cryptocurrencies projects to challenge Bitcoin. Jackson Palmer, a data analyst at Adobe, saw this tweet.
He called Marcus and talked to him about the idea he had published. The simple conversation resulted in the birth of a new project called Doge Coin, started in 2013 by Billy Marcus. Even after the launch, no one took this project seriously and made no effort to introduce it to the community.
The founders of Doge thought that digital currencies and their networks should move away from this serious space; Therefore, Dogecoin was only considered an online payment system.
Dogecoin is a peer-to-peer payment system primarily used for humanitarian and charitable purposes.
The currency uses Litecoin codes and proof of work algorithm. The proof of work mechanism prevents tampering with the blockchain and prevents nodes from validating modified versions of blocks.
In other words, nodes can detect tampering with hashes generated by PoW.
Users who create valuable content for the Reddit and Twitter websites can be rewarded with this token. Each user deposits some Dogecoin into the automated payment system designed for the Reddit website, which pays Dogecoin authors as necessary.
9. Polygon
Polygon is a platform that provides Ethereum-compatible blockchain networks and solutions for improving scalability.
A polygon is more of a protocol than a particular solution. For this reason, one of the prominent advantages of the Polygon ecosystem is the Polygon SDK, which allows developers to create Ethereum-compatible networks.
Another advantage of this platform is the proof-of-stake sidechain (PoS sidechain). Sidechains are parallel chains that can be connected to another blockchain. Sidechains can offer several benefits, the most important of which are higher transaction processing power and lower transaction fees.
The Polygon platform supports two major Ethereum-compatible networks: secure chains, such as rollups and independent chains, such as sidechains.
Secure chains rely on the chain infrastructure to which they are connected; therefore, they do not necessarily have their special security model. In contrast, independent chains must take care of their security, in other words, secure chains provide a higher level of security, while independent chains are more flexible in providing users with exceptional services.
In the Polygon platform, side chains are secured by a set of validators (pool of validators). Also, the chains need to be matched with the Ethereum blockchain regarding data safety and integrity. For this reason, some believe that side chains cannot be considered a second-layer solution.
10. Binance USD
Binance USD is a USD-backed stablecoin offered by the Binance exchange to the cryptocurrencies market.
Binance is one of the largest cryptocurrency exchanges in the world, which is why many people are paying attention to the use of this currency. BUSD has increased the ease of access, flexibility, and speed of transactions using digital assets to improve the decentralised financial ecosystem for unlimited use of the global network.
BUSD currency started its activity in 2019. The currency is traded on the Ethereum blockchain network like any ERC-20 token. Any user can redeem the coin and send it to controlled addresses in Paxos.
In this case, tokens are used, and the corresponding amount of currency is stored in the account or transferred to the person’s bank.
Final Words
If you are a big fan of digital currencies, it seems vital to know the characteristics and capabilities of the leading market cryptocurrencies. This article covers everything you need to know about these currencies.
Please note that the information provided in this article is for educational and informational purposes only. All actions taken by readers based on the information provided in our articles are entirely at their own risk.
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