First of all, it should be noted that there is only one cryptocurrency that has the status of a separate asset outside of the main categories - Bitcoin (BTC). Bitcoin is the first and most popular cryptocurrency that is traded on Binance and other exchanges. This cryptocurrency is considered one of the main objects of investment for users, as well as the leader among all cryptocurrencies in terms of capitalization. The first historical cryptocurrency is often seen as a digital alternative to fiat currencies and gold.
However, there are several different types of cryptocurrencies, depending on their features and applications.
ALTCOINS
Altcoins are all cryptocurrencies that are not Bitcoin. They can have different purposes, but are often created to improve or expand the functionality of BTC. Some of them are similar to Bitcoin, others are focused on introducing and using new tools, as well as expanding capabilities. By changing the open source code of the BTC, altcoin developers can speed up transactions, optimize the mining process, create various automated contracts, create a base for working with crypto applications, etc. Currently, the share of all altcoins is close to 40%.
TOKENS
Cryptocurrency tokens are created on the basis of other blockchains, such as Ethereum or BNB Chain. These assets are created by various companies in order to raise funds for the development of their projects or ensure the functionality of products. Investors, in turn, receive guarantees that the company will fulfill its obligations to them.
STABLECOINS
Cryptocurrencies whose price is linked to real assets, such as fiat money, gold or other cryptocurrencies. The price of Bitcoin and other similar cryptocurrencies changes throughout the day, week and month. The price of stablecoins, on the contrary, is extremely stable. Price fluctuations, of course, may occur, but they are much less than with cryptocurrencies. Stablecoins are suitable for those who intend to transfer their savings into digital assets with minimal risk.
It is worth considering that these terms may have different meanings depending on the context. For example, the word “cryptocurrency” can also mean an altcoin, a token, and a stablecoin. And a stablecoin is, from a technical point of view, a type of token.
NFT — NON-FUNGIBLE TOKEN
A unique digital asset that uses blockchain technology to confirm its authenticity and uniqueness. It is a digital object that can be bought, sold or exchanged between owners, just like a physical object such as a painting. Unlike traditional cryptocurrencies such as Bitcoin (BTC), which are fungible and identical, each NFT is special and has its own unique value and history. This can be absolutely any digital object - from a photograph to a music track or video. NFTs are created on various blockchains, but the most common are those that use the Ethereum blockchain. Ownership of an NFT is proven by a record on the blockchain that indicates the unique identifier and value of the item. NFTs can be purchased on various platforms, such as Binance NFT is a marketplace for trading non-fungible tokens (NFTs) on the Binance Smart Chain (BSC).
NFTs have become very popular lately, especially among collectors and artists who can sell their digital works and make a good profit for them. NFTs can also be used in games, media and various other areas where the uniqueness and authenticity of a digital asset is important.
DEFI
Decentralized finance services are not individual cryptocurrencies, but complex platforms that can combine different types of digital assets and their functions. Some experts believe that such projects revive the cryptocurrency segment.
The main feature of such services is that their users can provide and receive various services directly, without involving intermediaries. Moreover, all calculations are carried out in a reliable decentralized network. One example is ETHMakerDAO, a decentralized lending protocol. Its main goal is to become a more convenient and reliable alternative to banking services. Each type of digital money and services can be useful for different purposes.
In conclusion, it must be said that today there are a large number of virtual assets in the crypto-asset market. Each cryptocurrency has its own characteristics, advantages and disadvantages. In order to understand which coins are popular and have greater user value, you need to study the market, monitor ratings and news. By studying different assets, you can choose the best areas for investment and begin to effectively use innovative technologies.