Every investor is now looking to become a pro-crypto trader. One of the main reasons for the increasing market demand and popularity of cryptocurrencies is they are are lucrative and offer good returns. Read on to know more in detail about The News Spy
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When you are planning to invest for the short term or looking for an investment in the long run, there are different crypto assets to suit your requirements. Unlike in 2009, the scenario in the present world has completely transformed cool.
Today, we have more than 10,000 cryptocurrencies circulating in the market. These can be categorized into four broad classifications. This blog is an attempt to highlight the different types of cryptocurrencies and some of the key terms associated with them.
1. Cryptocurrency Guide:
An Overview Of Each CryptocurrencyCoins
These are different from alternative cryptocurrencies since they are based on Blockchain. We act as a native token. Its common example is bitcoin and Ethereum.
Another common term that you will come across when dealing with the crypto market is old coins or alternative cryptocurrencies since bitcoin is the first cryptocurrency every other cryptocurrency that emerged after it is termed an Altcoins or alternative cryptocurrency.
These are a digital representation of an asset. All the tokens can be all points, but all old coins or not tokens. These tokens are coded to facilitate smart contracts on the Blockchain network. The tokens are embedded in self-executable computer programs or codes which operate without any third-party intervention. These are also tradable. They are also used to represent loyalty points or commodities. You are also used to being a part of the initial coin offering and are used to distribute the coins when an ICO is launched.
Broad classification of cryptocurrencies
1. Utility Token
The first type of token that we are discussing is a utility token which is used to access a platform or the services where it operates. You would have seen that in the gaming zone or fun fair, the tokens are given and hold a certain value. However, these tokens are of value and significance only in a particular zone. The utility talk also operates in a similar format.
2. Security Token
The next option that we have is a security token. This token is issued by the government and also as regulation. Hence it is considered to be a safer option as compared to the other cryptocurrencies that exist in the market. If you are looking for a safe investment in your crypto journey, you can consider adding security tokens to your list.
3. Payment token
As evident from the name, payment tokens are the tokens used for making payments inside and outside their platform. The primary function is only for making transactions.
4. Exchange tokens
These tokens are native to their crypto exchange platforms. One of the examples is Binance Coin, which is operational on BinanceExcngae but now you can find it on other platforms.
5. Non-fungible tokens
The next option is the most recent one, and it is non-fungible tokens. These have limited issuance. It also runs on Ethereum Blockchain. The non-fungible tokens are issued for any artwork, GIFs, video clips, paintings, music notes and others. For example, Logan Paul’s video clips
All the 10,000 cryptocurrencies and others fall into these different categories. If you are also keen to start investing in cryptocurrency, this is the right time to choose the best crypto exchange platform and incorporate the most profitable options in your list.
To make your trading profile more versatile, you can add national cryptocurrencies. Although initially, the countries were apprehensive about cryptocurrencies and their longevity, however over the years, there has been a shift in the inclination. Countries like Sweden and China have introduced national cryptocurrency. Many countries have also put cryptos under the commodities section. You can also invest in these as they are backed by the government and are regulated. These are a safer deal as compared to other cryptos.
Now that you are aware of the different types of cryptocurrencies, you can register yourself on a good crypto exchange platform like immediate age and start trading. You can explore other options as well but make sure to run through its clauses and thousand before investing, and registering yourself.