Crypto is a new financial Innovation that based on blockchain technology. It is used to store and grow your wealth over time, buying and selling of goods and services and cross border payment in a quick and effective way. Furthermore, the word crypto and crypto currency will be used interchangeably in my discussion later on.
The key feature of blockchain technology is decentralize nature which means no single authority or institution controls it and records all the transactions securely and independently.
Key Characteristics of Crypto
The notable differences between the crypto currency and traditional finance is as follows.
There are 4 key differences
- Secured
- Decentralized
- Cross Border Payment
1.Secured
All the transactions on the blockchain technology is recorded in a ledger which is easily accessible and helps in the reduction of fraud.
2. Decentralized
The popularity of crypto is increasing through its nature of decentralization. It means no single institution controls it which reduces the risks of manipulation
3. Cross Border Payment
Unlike traditional financial system, crypto is using for cross border payments. It results in lower transfer fee and quickly be received and sent to the persons.
Types of Crypto
Cryptocurrency has various types and functions attached to it and we will classify them in 6 categories.
The 6 categories are as follows
- Store of Value crypto currency
- Smart contracts crypto
- Stable Coins
- Utility Tokens
- Community and meme coins
- Gaming Tokens
Store Of Value Crypto Currency
This crypto is generally used to store the wealth and grow the wealth over time. by considering the volatile nature of crypto the price of these crypto currencies can significantly rise and down in the matter of time.
Few important store of value cryptos are as follows
- Bitcoin ($BTC)
- Litecoin ($LTC)
- Bitcoin Cash ($BCH)
- Monero ($XMR)
1. Bitcoin ($BTC)
Bitcoin is the oldest and first crypto currency created in 2009 and is known by these days as a ‘digital gold’. Its is created by an anonymous named as ‘Satoshi Nakamoto’. Bitcoin has limited in supply and in the life time only available to 21 million.
Due to its limited supply, it will be attractive investment that will be expected to rise in value in the future.
Bitcoin is based on decentralized concept and no single authority or governments controls it reduces the risk of manipulation.
2. Litecoin ($LTC)
Litecoin is created by former google engineer named as ‘Charlie Lee’ in 2011. It’s faster than bitcoin in terms of transaction speed and transaction fee.
The total supply of Litecoin is 84 million. The key feature of Litecoin is it takes only 2.5minutes to complete a transaction on the blockchain.
3. Bitcoin Cash ($BCH)
Bitcoin cash is created in 2017 to address the issues exists in bitcoin in terms of faster transaction and cheaper transactions fees. Furthermore, bitcoin cash block size on the blockchain is larger than bitcoin by 31 MB.
The drawback of bitcoin cash is volatility of crypto currency which caused significant movement in upside or down side of price.
4. Monero ($XMR)
This crypto currency is recognised as privacy focused crypto currency that means transaction details are hidden including sender and buyer. It used advance crypto graphy so making it impossible to track the transactions details.
This is mining friendly coin which can mined through Standard CPU and users can easily access to it.
