Cryptocurrencies have changed the world’s expectations surrounding money. They have also evolved incrementally since the first Bitcoin block was mined in early 2009.
Since then, many other cryptocurrencies have started to gain popularity and recognition in the world. Despite the thousand different cryptocurrencies available, Bitcoin still remains the most popular.
So what is the reasoning behind Bitcoin’s immense popularity compared to other cryptocurrencies in the world? But first, let’s find out what cryptocurrencies are.
What are Cryptocurrencies?
Before we delve into the most popular cryptocurrencies in the market, let’s step back and briefly define these terms like cryptocurrency.
A cryptocurrency is usually something seen as intangible, also known as digital ‘coins’. While some cryptocurrencies have ventured into the physical realm with credit cards or other forms of payments, the large majority still remains digitized.
Let’s break down the word ‘cryptocurrencies’ to help you understand this term further. It certainly does sound futuristic to most, and many fail to grasp the significance of this term.
The “crypto” refers to the general encryption algorithm used in the generation of the currencies. Cryptocurrencies are almost always designed as an independent entity from the control of the government, which makes it far more credible.
So now since we’ve explained the basics of cryptocurrencies, let’s delve into a list of the most popular cryptocurrencies in the market today.
1. Bitcoin (BTC)
It has been around a decade since Bitcoin gained popularity on the Internet. Since then, it has always secured its position as the most popular and most used cryptocurrency worldwide.
Users transfer money from one digital wallet to another digital wallet easily. Each transaction is then verified by other users, for it to be fair and recorded on the public ledger, known as the blockchain.
So why exactly is Bitcoin popular? Here are some reasons why:
- Bitcoin is easy to set up and use plus is supported by a strong ecosystem of digital wallet platforms. This makes it easier for new and existing users to utilize this cryptocurrency.
- Major companies are starting to accept Bitcoins. Some of these companies include Microsoft, Overstock.com, and more. The list just keeps expanding.
- Although it fluctuates greatly, the price still remains high.
2. Ethereum (ETH)
Another popular cryptocurrency in the market is Ethereum. Despite the evident differences between Bitcoin and Ehtereum, both cryptocurrencies use a similar blockchain.
With Ethereum, it uses a currency called Ether, which also gets managed by a network of users, similar to Bitcoin. With Ethereum, there are certain conditions to be met before users are paid.
Some of the benefits of smart contracts include:
- Quick transactions. Everything happens in the digital scope. You do not have to worry about paperwork because smart contracts allow you to make quick and easy transactions in just one click.
- Eliminating third party fees in transactions. In a normal transaction, you would need a realtor to help with paperwork. Smart contracts eliminate third parties when making a transaction, making it easy
3. Ripple (XRP)
Ripple is known for its speedy transactions. To put it into perspective, Ripple processes transactions in as little as four seconds. You can compare this to Ethereum which takes two minutes and Bitcoin which takes an hour! This is how fast Ripple can conduct transactions.
Due to its fast transaction rates, Ripple works by creating a workable platform for banks and other payment providers to send money around the globe in just seconds! Being able to send money in just a span of four seconds allows banks and financial institutions to reach new markets efficiently.
Some of the other facts about Ripple’s tokens that contribute to its popularity include:
- Being an efficient and cost-effective option for sending money. Geographical location will not limit you from sending money across the globe. In just one click and four short seconds, you can send money across borders.
- Having high scalability. Its fast transaction speed allows banks and financial institutions to reach more customers.
4. Litecoin (LTC)
Both Litecoin and Bitcoin both have the word ‘coin’ in their names. However, there are three main features that distinguish Litecoin from Bitcoin:
- Processing speed. It normally takes around 10 minutes to process transactions for Bitcoins. In comparison, Bitcoin processes transactions in just about 2.5 minutes.
- Larger supply of currency. The cryptocurrency has 84 million Litecoins in total, which when compared to 21 million Bitcoins, is a lot.
- Less complex algorithms. Easier to use, especially for beginners. Compared to the popular cryptocurrencies, Litecoin has algorithms that are far easier to understand and work with.
5. Bitcoin Cash (BCH)
Bitcoin Cash was created to help improve Bitcoin’s scalability, which affects transaction speed. This has led to an increase in demand for Bitcoin Cash.
To help improve the transaction speeds, Bitcoin Cash expanded each block size from 1 megabyte (MB) to 8 MBs. A list of transactions are represented by each of those blocks, which still needs to be verified.
With all the cryptocurrencies out there, how do you know which one to choose? While each cryptocurrency has its own differences, they are all interlinked.
We hope this brief rundown of the five most popular cryptocurrencies can give you an oversight on each of its similarities and differences.
Regardless of the different cryptocurrencies, you are looking for, cryptocurrencies are not likely to disappear anytime soon. Alternatively, they may just be the currency of the future.