Since the launch of the first encrypted virtual currency in 2009, thousands of other cryptocurrencies have emerged. In 2021, more than 5,000 were online. These differ from each other in their operations and purposes. Thus, it is necessary to distinguish various categories of cryptocurrencies available on the web. In this article, you will discover the different categories of cryptocurrencies that exist.
What is a cryptocurrency?
A cryptocurrency is an encrypted virtual currency. It is free from the traditional rules governing the operation of fiat currencies. This is because it is decentralized and autonomous from the banking financial system. To carry out a financial transaction with cryptocurrencies, you only need a device connected to an internet browser.
To buy, sell, or even bet cryptocurrencies on financial markets, it is necessary to go through an online broker. For example, you can opt for the platform [bitalpha ai](https://bitalphaai.app/fr/) to trade cryptocurrencies.
The different categories of cryptocurrencies
Cryptocurrencies are generally divided into three major families, which are distinguished by their modes of operation. These are:
The family of altcoins
“Altcoin” is an expression created from the contraction of “alternative” and “coin.” Altcoins encompass all cryptocurrencies other than Bitcoin. In other words, this family includes the numerous cryptocurrencies that were born after Bitcoin was launched online in 2009.
A large number of cryptocurrencies belonging to this category were built on the same model as Bitcoin. Therefore, most of them have blockchains from which internet users can mine them. However, other cryptocurrencies in this category have established their own protocols and therefore operate differently. As of today, more than 5,000 altcoins are in circulation on the web. Some are more famous than others.
The family of stablecoins
The principle behind the first cryptocurrency is to create a currency free from all servitude over which no government has control. This is particularly reflected in the value of the cryptocurrency, which does not depend on any bank but rather on market constraints and realities. Thus, most cryptocurrencies are based on this principle, making them very volatile with as much risk of increase as of decrease at the same time.
To manage this volatility, some [cryptocurrencies](https://www.lefigaro.fr/secteur/high-tech/cryptommonaie-comment-l-acheter-20211205) have been pegged to fiat currencies such as the dollar, euro, or yen. Thus, stablecoins are designed using cryptocurrency technology but have a net value like traditional currencies. In this family, you will find cryptocurrencies such as:
USDT by Tether
USDT is a cryptocurrency launched online in 2014 by Tether, a Hong Kong-based company. It is pegged to the U.S. dollar, ensuring its security. Regardless of economic inflations and various financial stresses, the value of this encrypted currency remains equal to 1 U.S. dollar.
You will also find USD (True USD), PAX Standard, DAI, Binance, etc.
The family of memecoins
Memecoins refer to all cryptocurrencies that are based on a joke or a humorous video. Thus, these currencies do not rely on any project and are the most volatile on the market. Their values depend on their current popularity. Memecoins reach their highest peak when famous individuals highlight their jokes in a tweet or a public statement. Among the best cryptocurrencies in this category, you will find:
– Tamadoge;
– Dogecoin;
– Battle Infinity;
– Shiba Inu;
– Monacoin;
– Dogelon Mars;
– Dogs of Elon.
The risk of collapse of these cryptocurrencies is higher than that of altcoins.
