Over the past decade, cryptocurrencies have made great strides compared to traditional currencies. As more and more investors hold Bitcoin and hundreds of other cryptocurrencies as a store of value, to conduct transactions to exchange goods, and services and make profitable investments. What should Bitcoin and other cryptocurrencies should be encouraged? Please follow the article below by Optimal FB Agency to get a detailed answer to this question!
The impact of cryptocurrencies on the economy
With its decentralization, not subject to the management of governments and central banks, users can freely conduct transactions and payments with cryptocurrencies across countries or on holidays. Operating on blockchain technology, all transactions are publicly displayed, but your personal information will be kept confidential.
This currency allows users to control their transactions, securing and storing them in a digital wallet with a private key for maximum security. Furthermore, cryptocurrencies pose less risk to providers because transactions cannot be reversed or contain personal information. Cryptocurrency transaction fees are low, transactions are fast and convenient.
Since the emergence of Bitcoin in 2009, it has had a clear economic impact. More than a decade later, Bitcoin and other cryptocurrencies that should be encouraged have established themselves as a currency, a viable investment method. Not only does it impact the economy, but cryptocurrencies also impact society and its growth is constantly increasing.
The economic impact of cryptocurrencies is evident in several areas in the national and global communities. As of January 2020, there are over 2,000 cryptocurrencies in existence and nearly 36.5 million people in the United States own some form of cryptocurrency. According to experts, cryptocurrency is considered digital gold and a remarkable investment method that can hold value without the risk of depreciation. Additionally, you can learn more about: How to spot a Bitcoin scammer?
How many cryptocurrencies are there today?
Today, there are thousands of different cryptocurrencies in the world and each is designed to provide some new features or functions but most are based on the same principle as Bitcoin.
With its decentralized nature, they are created using blockchain technology and peer-to-peer (P2P) transaction methods. Bitcoin and other cryptocurrencies are stored in digital wallets that allow users to manage and trade their coins. As of March 2022, there are over 18,000 different cryptocurrencies and about 8% of the US population is involved in cryptocurrency trading.
Although there are many cryptocurrencies created based on Blockchain technology, there are some differences between them. Cryptocurrencies are divided into 2 main groups: Coins and Tokens. Coins include Bitcoin and altcoins (which include all cryptocurrencies other than Bitcoin). Some altcoins work similarly to Bitcoin while others are different. Tokens are programmable assets that reside on the blockchain of another platform.
Bitcoin and other cryptocurrencies should be encouraged
Bitcoin (BTC)
The first cryptocurrency was created using blockchain technology in 2009 by Satoshi. Often referred to as digital gold, Bitcoin acts as a store of value and a hedge against inflation. With a limited supply of 21 million coins, its scarcity and decentralization have made Bitcoin an alternative to traditional fiat currencies. Since its launch, this asset has attracted millions of investors and become the largest cryptocurrency by market capitalization. As of April 2024, Bitcoin has the largest market capitalization of 1.31 trillion USD.
Ethereum (ETH)
Ethereum was created in 2014 by Russian-Canadian programmer Vitalik Buterin and British computer scientist Gavin Wood. It is the first alternative to Bitcoin with the ability to build and run smart contracts, and decentralized applications continuously, against fraud, control, or interference from 3rd parties. The goal of creating this cryptocurrency is to create a set of decentralized financial products that anyone in the world can access regardless of nationality or ethnicity.
Ethereum uses ether, its platform-specific cryptographic token. Ether (ETH) is used to pay validators. On September 15, 2022, Ethereum completed its long-awaited transition to proof-of-stake (PoS) validation. As of 2015, Ethereum was the second-largest cryptocurrency by market capitalization after Bitcoin. Specifically, as of August 25, 2023, Ether’s market capitalization was nearly $199 billion.
Binance Coin (BNB)
A utility cryptocurrency that acts as a method of paying for fees associated with trading on the Binance exchange. It is the world’s largest cryptocurrency exchange by trading volume as of 2024 and was founded by Changpeng Zhao.
Binance Coin is also the 3rd largest cryptocurrency by market capitalization as of July 22, 2023, valued at $37.3 billion, with one BNB worth approximately $242.55. It was initially an ERC-20 token that operated on the Ethereum blockchain. It later launched a mainnet and used a PoS (Proof of Stake) consensus model.
Tether (USDT)
One of the first and most popular stablecoins launched in 2014. Among Bitcoin and other cryptocurrencies that should be encouraged, this one cannot be ignored. It is used for the purpose of pegging their market value to an external currency or reference point to reduce volatility. The price of this coin is directly tied to the USD and this system allows users to make transactions to transfer cryptocurrencies to USD quickly.
This cryptocurrency allows individuals to use the blockchain network and related technologies to transact with traditional currencies. At the same time, it reduces the volatility and complexity associated with digital currencies. As of July 22, 2023, Tether is the third largest cryptocurrency by market capitalization, $83.8 billion, and the value of each token is $1.00.
XRP
This cryptocurrency runs on the Ripple network and is designed to serve as a currency of exchange in a remittance network used by financial institutions. It was created as an international payment system in 2012. XRP acts as a bridge between two different currencies to provide cheaper and faster global remittances. As of July 22, 2023, XRP has a market capitalization of around $39.3 billion and is trading at around $0.74.
USD coin (USDC)
Similar to Tether, USD Coin is a stable coin that is pegged to the US dollar using fiat. The cryptocurrency was launched in 2018 by the Center Consortium of Circle and Coinbase. USDC is a stablecoin – a cryptocurrency that is pegged to an asset with a stable price. As of July 22, 2023, USD Coin has a market capitalization of $30.8 billion and a price of $0.9999 per coin.
Cardano (ADA)
ADA was created in 2015 by Charles Hoskinson, one of the five original founding members of Ethereum. This cryptocurrency initially used the Ouroboros protocol, a new protocol built on the PoS model that ensures fast transaction speeds and fair reward-earning opportunities. Dubbed as a “third generation” cryptocurrency, it stands out from other cryptocurrencies. Cardano splits the blockchain into two layers to increase transaction speeds and implements native tokens to give ADA holders a better experience.
Dogecoin (DOGE)
Created by two software engineers, Billy Markus and Jackson Palmer in 2013, this digital currency operates on the Litecoin platform. Just about 1 year after its launch, the market had nearly 100 billion Dogecoins in circulation. After that, about 5.2 billion coins were created every year. The goal of the developer of this coin is to make it a means of transaction and payment.
Dogecoin is considered by some to be the original “meme coin” because in 2021 its price suddenly skyrocketed. This coin uses the image of Shiba Inu as its avatar and is accepted as a form of payment by several major companies. As of July 22, 2023, Dogecoin’s market capitalization is $9.9 billion, and one DOGE is valued at about $0.07.
Above are Bitcoin and other cryptocurrencies that are recommended that investors need to understand to make the right investment decision in the right currency. Hopefully, the useful information we have shared above will help you gain more understanding of the crypto market when investing.
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Frequently asked questions
You can invest in all the cryptocurrencies mentioned above and many more. However, not all cryptocurrency exchanges offer all the different cryptocurrencies available. So if you are looking for a specific coin, it is best to see which exchange offers it. You should also check the fee schedule of the exchanges you are interested in as it varies from exchange to exchange.
The biggest difference between a token and a cryptocurrency is that tokens do not have their blockchain. They are non-native assets and require the infrastructure of another blockchain.
