Which Cryptocurrencies are the Most Important ones?

Cryptocurrencies can act like real money—in
a sense, they are real money—but they take a digital monetary form and are not managed
or governed by any central authority. A true product of the digital age, cryptocurrencies
operate without the involvement of banks, governments, or any middleman. However, in most cases you will need to use
a digital currency exchange to buy and sell your digital assets. The currencies modeled after Bitcoin are collectively
called altcoins, and in some cases “shitcoins,” and have often tried to present themselves
as modified or improved versions of Bitcoin. While some of these currencies may have some
impressive features that Bitcoin does not, matching the level of security that Bitcoin’s
networks achieves has largely yet to be seen by an altcoin. Beyond that, the field of cryptocurrencies
is always expanding, and the next great digital token may be released tomorrow. While Bitcoin is widely seen as a pioneer
in the world of cryptocurrencies, analysts adopt many approaches for evaluating tokens other than BTC. It’s common, for instance, for analysts
to attribute a great deal of importance to the ranking of coins relative to one another in terms of market cap.

We’ve factored this into our consideration,
but there are other reasons why a digital token may be included in the list, as well. Ethereum (ETH). The first Bitcoin alternative on our list,
Ethereum, is a decentralized software platform that enables Smart Contracts and Decentralized
Applications (DApps) to be built and run without any downtime, fraud, control, or interference from a third party. The goal behind Ethereum is to create a decentralized
suite of financial products that anyone in the world can have free access to, regardless
of nationality, ethnicity, or faith. This aspect makes the implications for those
in some countries more compelling, as those without state infrastructure and state identifications
can get access to bank accounts, loans, insurance, or a variety of other financial products. Ether, launched in 2015, is currently the
second largest digital currency by market cap after Bitcoin, although it lags behind
the dominant cryptocurrency by a significant margin. As of January 2021, ether's market cap is
roughly 19% of Bitcoin's size. Litecoin (LTC). Litecoin, launched in 2011, was among the
first cryptocurrencies to follow in the footsteps of Bitcoin and has often been referred to
as “silver to Bitcoin’s gold.” Litecoin is based on an open source global
payment network that is not controlled by any central authority, and uses scrypt as
a proof of work, which can be decoded with the help of CPUs of consumer grade.

Although Litecoin is like Bitcoin in many
ways, it has a faster block generation rate and hence offers a faster transaction confirmation time. Other than developers, there are a growing
number of merchants who accept Litecoin. As of January 2021, Litecoin had a market
cap of $10.1 billion and a per token value of $153.88, making it the sixth largest cryptocurrency in the world. Cardano (ADA). Cardano is an “Ouroboros proof of stake”
cryptocurrency that was created with a research based approach by engineers, mathematicians,
and cryptography experts. Cardano aims to be the financial operating
system of the world by establishing decentralized financial products similarly to Ethereum as
well as providing solutions for chain interoperability, voter fraud, and legal contract tracing, among
other things. As of January 2021, Cardano has a market capitalization
of $9.8 billion and one ADA trades for $0.31. Polkadot (DOT). Polkadot is a unique proof of stake cryptocurrency
that is aimed at delivering interoperability between other blockchains. Its protocol is designed to connect permissioned
and permissionless blockchains as well as oracles to allow systems to work together
under one roof.

Polkadot was created by Gavin Wood, another
member of the core founders of the Ethereum project who had differing opinions on the
project's future. As of January 2021, Polkadot has a market capitalization of $11.2 billion and one DOT trades for $12.54. Bitcoin Cash (BCH). Bitcoin Cash holds an important place in the
history of altcoins because it is one of the earliest and most successful hard forks of
the original Bitcoin. In the cryptocurrency world, a fork takes
place as the result of debates and arguments between developers and miners. Due to the decentralized nature of digital
currencies, wholesale changes to the code underlying the token or coin at hand must
be made due to general consensus; the mechanism for this process varies according to the particular cryptocurrency. As of January 2021, BCH had a market cap of
$8.9 billion and a value per token of $513.45.

Stellar (XLM). Stellar is an open blockchain network designed
to provide enterprise solutions by connecting financial institutions for the purpose of
large transactions. Huge transactions between banks and investment
firms that typically would take several days, a number of intermediaries, and cost a good
deal of money, can now be done nearly instantaneously with no intermediaries and cost little to
nothing for those making the transaction. Stellar Lumens have a market capitalization
of $6.1 billion and are valued at $0.27 as of January 2021. Chainlink. Chainlink is a decentralized oracle network
that bridges the gap between smart contracts, like the ones on Ethereum, and data outside of it.

Blockchains themselves do not have the ability
to connect to outside applications in a trusted manner. Chainlink’s decentralized oracles allow
smart contracts to communicate with outside data so that the contracts can be executed
based on data that Ethereum itself cannot connect to. As of January 2021, Chainlink's market capitalization
is $8.6 billion, and one LINK is valued at $21.53. Binance Coin (BNB). Binance Coin is a utility cryptocurrency that
operates as a payment method for the fees associated with trading on the Binance Exchange. Those who use the token as a means of payment
for the exchange can trade at a discount.

Binance Coin’s blockchain is also the platform
that Binance’s decentralized exchange operates on. As of January 2021, Binance has a $6.8 billion
market capitalization with one BNB having a value of $44.26. Tether (USDT). Tether was one of the first and most popular
of a group of so called stablecoins, cryptocurrencies that aim to peg their market value to a currency
or other external reference point in order to reduce volatility. Because most digital currencies, even major
ones like Bitcoin, have experienced frequent periods of dramatic volatility, Tether and
other stablecoins attempt to smooth out price fluctuations in order to attract users who
may otherwise be cautious. Tether’s price is tied directly to the price
of the US dollar. The system allows users to more easily make
transfers from other cryptocurrencies back to US dollars in a more timely manner than
actually converting to normal currency. In January of 2021, Tether was the third largest
cryptocurrency by market cap, with a total market cap of $24.4 billion and a per token
value of $1.00.

Monero (XMR). Monero is a secure, private, and untraceable
currency. This open source cryptocurrency was launched
in April 2014 and soon garnered great interest among the cryptography community and enthusiasts. The development of this cryptocurrency is
completely donation based and community driven. Monero has been launched with a strong focus
on decentralization and scalability, and it enables complete privacy by using a special
technique called “ring signatures.” As of January 2021, Monero had a market cap
of $2.8 billion and a per token value of $158.37..

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