What are the Different Types of Cryptocurrencies?

When it comes to the variants of hump.io cryptocurrencies, most are forks of Bitcoin, while others were built from scratch. However, there are only 3 broad types of cryptocurrencies currently in existence. These are –

Bitcoin
It is the first cryptocurrency that was ever introduced and is considered the “digital gold”. It currently holds a market capitalization of $172.76 billion, the largest of any other variant of cryptocurrency. A unit of Bitcoin can be broken down into Satoshis, which is equivalent to the relationship of rupees and paise.

Furthermore, the Bitcoin network is so designed that it can only have 21 million units of Bitcoin circulation at any point in time. This limited availability is a primary component that drives its market price.

Altcoins
This category primarily involves forks and alternate versions of Bitcoin, thus, the name. However, some Altcoins are exponentially different from Bitcoin and use varying algorithms. For instance, Ethereum, which is an altcoin, is not a currency but a platform where entities can make their apps based on blockchain.

Currently, there are more than a thousand altcoins. Some of the notable altcoins are Ethereum, Factom, Litecoin, NEO, etc.

Tokens
These are products of altcoins like Ethereum and NEO. These cryptocurrencies do not have a separate blockchain but instead run on the decentralized apps created via such altcoins. However, tokens carry supremely low value compared to the other two types mentioned above, because it can only be used to purchase items from such decentralized apps or dApps.