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Exceptional 4 Types Of Digital Currency On The Market Now

The 4 Main types of digital currency

Introduction: What Are The 4 Main Types Of Digital Currency

Blockchain brings together four main types of cryptocurrencies.

It is a digital currency that can be sent to other people. It can be used as a gift, service, or product.

You know it’s just like the money we use in our bank accounts (USD, Euro, etc.).
It is digital; it is not physical.

Read more Crypto information about “How Crypto works” here.

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The Best types of digital currency is "Defi"

Bitcoin (DEFI)

It is decentralized finance, which means it does not rely on banks or third parties to handle it. With Bitcoin, every transaction is carried out directly between users, which is called a peer-to-peer network. This is all thanks to the Blockchain. Bitcoin introduced blockchain technology, allowing users to send and receive Bitcoin without using a third party.

KEY TAKEAWAY
  • The real founder of Bitcoin is anonymous, but goes under the name Satoshi Nakamoto and their identity is still a mystery.
  • Launched in 2009, Bitcoin is the world’s largest cryptocurrency by market capitalization.
  • Unlike fiat currency, Bitcoin is created, distributed, traded, and stored with the use of a decentralized ledger system, known as a Blockchain.
  • Bitcoin’s history as a store of value has been turbulent; the cryptocurrency skyrocketed up to roughly $20,000 per coin in 2017, but less than years later, it was trading for less than half of that.
  • As the earliest virtual currency to meet widespread popularity and success, Bitcoin has inspired a host of other cryptocurrencies in its wake.
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Alternative types of digital currency is "Altcoin"

Altcoin (Alternative)

Now, there are more than 5000 Altcoins! However, don't let this number scare you-most altcoins are just alternative versions of Bitcoin with only minor changes. This is how they got the name "altcoin". It is important to understand that not all altcoins are just alternative versions of Bitcoin. Some are very different from Bitcoin and have different goals or purposes.

KEY TAKEAWAY
  • The term “altcoins” refers to all cryptocurrencies other than Bitcoin.
  • Some of the main types of Altcoins include mining-based cryptocurrencies, Stablecoins, security tokens, and utility tokens.
  • Altcoins might only include mining-based cryptocurrencies other than Bitcoin in the future as usage continues to develop with technology.
  • Altcoins are generally developed to address shortfalls in Bitcoin.
    For example: Litecoin provides faster payment processing and Stablecoins are tied to external assets to reduce volatility.
  • Ethereum and Ripple were the largest Altcoins by market capitalization in February 2020.
 
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The 3. Type of digital currency is "dApps"

Tokens (for dApps)

They are used in dApps (decentralized applications). These are the applications we tell you that can be built on blockchains such as Ethereum and NEO. dApps are built to use smart contracts, which is why they use tokens. Some people buy tokens to sell at a higher price later instead of buying them to use on dApps. They are completely unique. You must have an Ether or NEO (or any kind of altcoin on which the dApp is based) to pay transaction fees.

KEY TAKEAWAY
  • MakerDAO regains a leadership position in total value locked by surpassing $1.5 billion.
  • MakerDAO is responsible for 21% of the total value generated in the DeFi space right now.
  • Aave is right behind MakerDAO with $1.35 billion in TVL with active wallets growing by 25% in September.
  • Aave is the number one lending protocol in DeFi right now.
  • Aave’s LEND token value has increased by 952% in three months.
  • While daily wallets on Curve skyrocketed recently from 102 to 1,235 within 3 months, the dapp lost its share in value. TVL is close to $1 billion now.

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The 4. types of digital currency are "Stable Coins"

Stable Coins

Tether (USDT - ERC20) and other stable coins: Tether is meant to reflect the price of the US dollar. There are some criticisms to consider. But if you want a stable coin for temporary use, Tether tends to be a good choice. It isn’t an investment; it is a place to park your value in crypto when you are in-between coins. With that in mind, one should dismiss TUSD, PAX, USDC, or DAI.

KEY TAKEAWAY
  • All Tether tokens are pegged at 1-to-1 with a matching fiat currency (e.g., 1 USD₮ = 1 USD)
  • Continued rise into the Top-10 cryptocurrency rankings
    demonstrates Tether’s importance, as well as the overall
    market demand for stablecoins
  • More centralized and opaque than other stablecoins, but
    making efforts of late towards greater transparency
  • Despite entrance of new competitors, continues to dominate
    the stablecoin market
  • Most similar to: USDC, TrueUSD, AAA Reserve, and Stably
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The 5. Digital Art Can Be The Future

BONUS - NFT

“Non-fungible” more or less means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible — trade one for another bitcoin, and you’ll have exactly the same thing. A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different.

KEY TAKEAWAY
  • NFT’s are past the peak of inflated expectations and troughs of disillusionment, hiking up the slope of enlightenment in virtual artwork and virtual collectibles
  • NFT’s enable player wishes of possession, series, fandom, and investment, making them an interesting figure to be carried out as a generation to gaming.
  • Existing games using NFTs like Axie Infinity have created interesting NFT economies: what’s left to manifest is integrate an interesting gameplay meta with the collectible/investment components in a decentralized fashion

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