As of December 2021, there are more than 6,000 cryptocurrencies in circulation. While many of these cryptocurrencies lack much support or trading activity, many have devoted groups of backers and investors.

Tokens and coins are the two types of cryptocurrencies in the market. Coins serve primarily as forms of currency, while tokens are programmable assets. A non-blockchain cryptocurrency, or altcoin, is any cryptocurrency that isn’t bitcoin.

Basically, the term “altcoin” is a slang term for “an alternative to Bitcoin.” Most altcoins are based on Bitcoin’s core architecture and share some properties. Some cryptocurrencies employ a different method to generate and validate transaction blocks, while others may include new functionality.

TYPES OF CRYPTOCURRENCIES

Let’s decode types of cryptocurrencies in detail through this article.

Payment currency

• Payment currency is a means of purchasing groceries, services, and bills.
• The public’s belief in it determines the value of a project or protocol.
• The currency is Internet-based, decentralized, anonymous, transparent, irreversible, and fungible.

 Example of Payment Currency

LITECOIN

Litecoin is a peer-to-peer (P2P) internet cryptocurrency that is open-source, decentralized, and based on mathematical principles. It is quicker than bitcoin at 56 transactions per second; however, it is far slower than ripple and Visa. Litecoin employs the SHA-256 algorithm, but Bitcoin uses the Scrypt algorithm, significantly newer.

BITCOIN CASH

A Bitcoin fork led to the creation of Bitcoin Cash (BCH) in August 2017. BCH increased the block size from 1MB to 8MB, allowing for more transactions. Basically, a fork is just a modification in a blockchain network’s protocol. The primary purpose was to address Bitcoin’s scalability issue.