The Different Types of Cryptocurrency and Tokens?
if you’re curious about what’s next after Bitcoin, read on as we dissect the different types of cryptocurrency. Perhaps, you’ll also find some insights to diversify your investment portfolio.In 2008, an anonymous developer known as Satoshi Nakamoto published a whitepaper describing the first electronic cash independent of governments or banks— Bitcoin (BTC). Unlike traditional online payment, it promises a lower transaction fee, and it’s completely decentralized.
Although it’s decentralized, the most intriguing part of bitcoin is its competitive exchange rate against the dollar attracting potential investors and traders. Despite it not being legally tendered, Bitcoin remains a popular type of cryptocurrency and has inspired many creators to launch their cryptocurrencies, collectively referred to as altcoins.as the name suggests, are tokens of a stable value almost all the time. The most popular stablecoins are pegged to the dollar, such as USDC and BUSD, and they are often backed by a stable or fairly stable asset like fiat currency or short-term US Treasury bills.
an author and analyst at CryptoQuant, also published another research in which he expressed concern about the future of Bitcoin. The investigation found that the ratio of spot trade volume to derivatives has been steadily dropping since March 26. During Q1, the ratio was critical to BTC’s push. As a result, a drop in it raises the chance of ETH outperforming BTC in the short term.However, according to CryptoQuant data, the opposite was true for ETH at press time, which could be problematic. While the number of active addresses in ETH decreased from the previous day, the number of active addresses in BTC grew.
So how exactly does cryptocurrency solve this ‘money problem’? Schwartz pointed to the example of how financial services company Cuallix is using XRP, a digital currency created by Ripple, to move money between the United States and Mexico. Instead of relying on the conventional method, which is very expensive and takes several days, Cuallix buys XRP the moment they need it and a few seconds later sells it for Mexican Pesos.And he foresees a new wave of industry enabling this shift: “There are going to be very significant large technology companies built that support the move to crypto finance, just like there have been really big technology companies that have supported the move into digital media and digital communications.”
Given the criteria, it is doubtful that ETH will outperform BTC. However, given that ETH is still waiting for a major update and a few key BTC measures are falling, it will be interesting to see how things play out.Allaire believes the solution lies in the establishment of ‘”crypto-native banks” that will work closely with both crypto companies and central banks to provide the connectivity that is urgently needed.
