Bitcoin is not merely a leading light for the cryptocurrency marketable but has transformed as a standard for other digital currencies by motivating many followers. However, Bitcoin comes with outdated technology as compared to other emerging cryptocurrencies.
Undeniably, the taproot update in the bitcoin network claims to fix the issues regarding slow speed, secrecy, and security, but still, it lacks in terms of technology. You can check the primary concerns of bitcoin investors for more details about cryptocurrency trading. Regardless of being an outdated model, bitcoin is still the most lovable cryptocurrency, and it is backed by many multinational companies and financial organizations like Tesla Motors and Microstrategy.
The cryptocurrency market consists of other digital currencies that can transform our financial segment much better. Most of these digital currencies have a clear motive. Let’s check the list of some essential digital currencies, including bitcoin.
What are digital currencies?
Before discussing some of the critical cryptocurrencies, let’s find out what cryptocurrencies mean. A cryptocurrency is a token or coin having virtual existence but having a real-life value. Undeniably, some cryptocurrencies have paved their way into the real world through innovative credit cards, but most digital currencies are still intangible.
The concept of virtual currencies was there before bitcoin, but bitcoin came up with complicated cryptography, differentiating it from other virtual currencies. The cryptography ecosystem ensures that each process of this ecosystem will follow the path of decentralization.
The main reason why cryptocurrencies are gaining traction is the decentralization feature. Decentralization means, while using these digital coins, we are free from government authorities. By the end of November 2021, the number of altcoins will have increased to 10000. Out of these 10000 altcoins, only a few cryptocurrencies are exceedingly popular amongst the global audience. Let’s check different types of digital coins, including bitcoin.
Bitcoin or BTC is a cryptocurrency, having a market cap of nearly $1.5 billion. The digital token, bitcoin, has a finite supply. As mentioned ahead, out of 10000 cryptocurrencies, only a few digital currencies are backed by investors and multinational companies; bitcoin is one of these few currencies. Bitcoin also introduced us to the emerging technology of a public ledger. A public ledger popular as blockchain was first seen in bitcoin.
Ethereum is classified as the only alternative to bitcoin. Ethereum is not a digital currency but is a decentralized application that facilitates the feature of smart contracts. Moreover, Ethereum allows other creators to originate decentralized models to the launch pad. Finally, Ethereum is a secure network devoid of government authorities.
The motive of Ethereum is to generate a decentralized finance ecosystem and remove the international barriers while accessing the financial suite. In a nutshell, Ethereum is a Launchpad, and it does have a token named ether. People who wish to invest resources in Ethereum can buy this token and make huge gains. Ether is the second-largest digital asset and currency as per the coin market cap.
Litecoin was launched before Ethereum but still lags from Ethereum in terms of market cap. Charlie Lee, an engineer, developed and released Litecoin in 2011. Litecoin is pegged with bitcoin as it is a lite account of bitcoin.
The technology in the lite coin is similar to bitcoin, but still, the lite coin is way faster than bitcoin while processing transactions. Similar to bitcoin, Charlie lee developed the lite coin as an alternative to traditional payments. The supply of the lite coin is restricted to 81 million LTC.
Cardano is the leading successful cryptocurrency working on the proof of stake model. Bitcoin, Litecoin, and Ethereum, all of these digital currencies work on the proof of work mechanism. Some cryptocurrency experts have stated that Cardano can quickly kill Ethereum. The concept of Cardano is just like Ethereum, but it operates on the proof of stake. The market value of Cardano is floating around $1.50. As per the market cap, Cardano is on the list of the top six digital currencies.
Both Polka dot and ADA underlie the proof of stake technology, but the motive of polka dot is different from Cardano. Polka dot links public ledger of different types with one another, not just blockchain. It also links oracles to work on one platform. Polka dot or DOT is the seventh-largest digital currency according to its market cap. These are some different types of cryptocurrencies, including bitcoin.