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Cryptocurrency can be broadly categorized into several types, each with distinct characteristics:
1. Bitcoin $BTC : The first cryptocurrency, primarily used as a digital store of value and medium of exchange.
2. Altcoins: Any cryptocurrency other than Bitcoin, including:
- Stablecoins: Pegged to a stable asset (e.g., $USDT, $USDC ) to minimize price volatility.
- Utility Tokens: Provide access to a product/service (e.g., Ether for Ethereum's platform).
- Security Tokens: Represent ownership in an asset or enterprise, often subject to regulatory scrutiny.
3. Meme Coins: Cryptocurrencies inspired by memes, often with community-driven initiatives (e.g., Dogecoin, Shiba Inu, $NOT
).
4. Decentralized Finance (DeFi) Tokens: Enable financial services without intermediaries (e.g., Uniswap, Aave).
5. Non-Fungible Tokens (NFTs): Unique digital assets representing ownership of a specific item or artwork.
Understanding these differences can help shape your investment strategy and goals.