In layman terms, a cryptocurrency is best and broadly defined as a form of tokens or “coins” that are distributed and decentralized on a digital ledger. Beyond that, the world of virtual currencies has since expanded dramatically—the next big digital token may very well be released tomorrow and the industry wouldn’t bat an eye.
The concept of cryptocurrencies was designed to be completely free from government manipulation and control. It was, first and foremost, made to be 100% man-made and manufactured directly from the creative minds of the blockchain community who sought to create something bigger than traditional paper bills as a form of currency.
It’s safe to say this buzzing interest surrounding bitcoin all sprang from the great rise of Bitcoin in the late 2000s. This mysterious cryptocoin favourite has not only served as a trendsetting blueprint for all the future cryptocurrencies that would be ushered in, but has become in itself the de facto standard for the industry at large.
The sudden influx of currencies that came after Bitcoin, who have all self-admittedly inspired themselves after the titular coin, are called altcoins. While some of these currencies may have some impressive features that Bitcoin does not, matching the level of security that Bitcoin’s networks achieve largely has yet to be seen by an altcoin.
In any case, it’s important to learn the history from the best and see what it came up with after. Here are five of the most successful virtual coins to date, dumbed down for the average person.
There is no cryptocurrency without bitcoin and vice versa. The first of the first, the creme de la creme of digital currency as it is, Bitcoin has been hailed as the go-to leader of this industry. The world’s biggest cryptocurrency is worth more than $125 billion, with a price per coin of more than $7,305.
Founded in 2009 under the ever-mysterious pseudonym Satoshi Nakamoto, as with most virtual currencies, Bitcoin runs on a blockchain. This means that it operates on a ledger logging transactions distributed across a network of thousands of computers. Because additions to the distributed ledgers must be verified by solving a cryptographic puzzle, a process called proof of work, Bitcoin is kept secure and safe from fraudsters.
There are roughly 17.1 million BTC in circulation to date.
This digital token that prompted the rise of the initial coin offering is significantly smaller than bitcoin, but with a hefty 100.7 million tokens in circulation still. Serving as both a cryptocurrency and a blockchain platform, Ethereum is a favorite of program developers because of its potential applications, like so-called smart contracts that automatically execute when conditions are met and non-fungible tokens.
The primary goal behind Ethereum is to create a decentralized suite of financial products that anyone in the world can freely access, regardless of nationality or ethnicity. This inclusive currency makes the implications for those in financially challenged countries to still be able to partake in the movement, giving them access to state infrastructure and identifications like bank accounts, loans, insurance, or a variety of other financial products.
Launched in 2011, Litecoin was among the first few cryptocurrencies to directly follow in the footsteps of Bitcoin. It’s even often referred to as the “silver to Bitcoin’s gold”. Created by Charlie Lee, an MIT graduate and former Google engineer, Litecoin is based on an open-source global payment network not controlled by any central authority.
Instead, Litecoin uses a “scrypt” method as their proof of work, which can be decoded with the help of consumer-grade CPUs. Although Litecoin is like Bitcoin in many ways, it has a faster block generation rate and hence offers a faster transaction confirmation time which makes it a more convenient choice for beginner traders.
With a total market capitalization of more than $19.8 billion, the price of each Ripple coin is significantly more accessible than the rest on this list. With sometimes just over 50 cents per token, each XRP token can be used on a network of exchange facilities using different currency types – both flat currencies and major cryptocurrencies.
There are over 39 billion tokens in circulation at the moment.
While this can be viewed as a novelty listing, Bitcoin Cash still holds an important place in the history of altcoins—and possibly crypto coin—to date. Hailed as one of the earliest and most successful hard forks of the original BTC, Bitcoin cash is the result of a long and tedious debate between developers and miners alike.
Due to the decentralized nature of digital currencies, the wholesale changes to the code underlying the token or coin at hand must be made due to general consensus; the mechanism for this process varies according to the particular cryptocurrency.
The total market cap of this digital currency is about $14.5 billion, with a market price of $843 per coin and a total circulation of just over 17.2 million BCH.