What cryptocurrencies are and how they differ

Cryptocurrency is an electronic currency that has no physical expression. It is protected from counterfeiting and hacking by cryptography. The main difference between cryptocurrency and fiat (conventional money) is anonymity. It is not regulated by banks and other government agencies.

Cryptocurrencies work using a blockchain network — a continuous chain of blocks. Each block stores information about the current and previous transaction, making it difficult to hack and change data within the network. Blockchain is decentralized. This means that transaction data is stored simultaneously by each user on the network without a host computer or server. 

 

Types of cryptocurrencies: stablecoin, altcoin, bitcoin

Bitcoin is the very first and most popular cryptocurrency, to the rise or fall of which the whole market reacts. Any cryptocurrency other than bitcoin is called altcoin, among which are stablecoins.

Bitcoin (BTC)

Since it was with bitcoin that the history of cryptocurrencies began, it is singled out separately. In 2008, Satoshi Nakamoto posted the Bitcoin White Paper. Since then, bitcoin has been at the top of the cryptocurrency rankings. 

 

Bitcoin is mined by mining on ASIC devices or mining farms. Bitcoin mining is based on a proof-of-work algorithm. This means that the one, who has more computing power, gets the reward for the block. 

 

Bitcoin is very volatile and can go up and down very fast. It is not backed by any other assets, and its price is directly dependent on world news and demand. The more people buy bitcoin, the more it rises in value.

 

Bitcoin has a limited issuance, so it cannot be mined indefinitely. The creator of the cryptocurrency Satoshi Nakamoto wanted to avoid inflation and programmed the system so that it is impossible to issue more than 21 million bitcoins. It is estimated that the last bitcoin will be produced in 2140. 

Altcoins

An altcoin is any cryptocurrency other than bitcoin. In English, altcoin means “alternative coin”. They were created in order to solve bitcoin's problems: complicated and expensive mining, long transactions, lack of anonymity, and limited functionality of working with smart contracts. 

 

The number of altcoins is growing all the time, but we'll look at the most popular ones.

Ethereum (ETH)

Ethereum or Ether is the world's first altcoin and the second most popular cryptocurrency with its own blockchain. Ethereum was created by Vitaliy Buterin in 2013, raising $18 million at the ICO (initial public offering of the coin). Ethereum became fully operational in 2015. 

 

Ether differs from bitcoin in its greater ability to work with smart contracts (software code with described conditions whose fulfillment is tracked by an algorithm). In addition, ether has unlimited issuance, and a new block in the network is created every 14 seconds. 

Litecoin (LTC)

Litecoin is the most popular fork (offshoot) of bitcoin, which was released in 2011 by Charles Lee. Litecoin has four times the issuance rate of bitcoin — a total of 84 million coins can be issued, and transactions are also faster. 

Ripple (XRP)

Ripple is considered to be the coin with the fastest transaction speed — 1500 per second. Ripple was launched in 2012 with the goal of sending money quickly around the world. Ripple coin cannot be mined, and its issuance is controlled by the developer company, which causes negative reaction from decentralization supporters. A total of 100 billion XRPs have been created. 

Dash (DASH)

The most anonymous cryptocurrency, which was created as a payment means of the darknet. It was released in 2014 and was originally called DarkCoin. Completely anonymous cryptocurrency is made by anonymizers. They divide transactions into small portions and mix them together. Therefore, it is impossible to trace the transactions, to know the data of the sender and the recipient. 

Stablecoins 

Stable cryptocurrencies whose value is tied to other assets. For example, to fiat currency at a 1:1 ratio, physical assets (gold, oil), an algorithm or other cryptocurrency. Buying stabelcoin is a great solution for those who want to work with cryptocurrency but are scared of high volatility. 

 

The stability of such coins is ensured by smart contracts and algorithms that manage the release of new coins depending on the rate.

Tether USDT

The first and most popular stabelcoin, which is backed by the U.S. dollar at a 1:1 ratio. The coin was released by Tether Limited in 2015. At the same time, the first block of USDT was created. Tether's fluctuations are insignificant, allowing it to be used for profit taking. 

Comparative table of cryptocurrency values in November 2021

Which cryptocurrency is the most profitable

Cryptocurrencies are a topic that has been on trend for months and is actively continuing to evolve. Therefore, it is not surprising that many people want to invest in cryptocurrency in order to multiply their capital. But how to understand which asset is the most profitable? Bitcoin, ether, or maybe ripple? There is no answer to this question. It all depends on the requirements and parameters of the investor, or even his belief in one or another asset.

In the S-Group ecosystem, you can find the right way to invest. At Forex Market, you can make money on the foreign exchange market with the help of a robot with artificial intelligence, while the S-IPO project will help you invest in company stocks and earn passive income. We have everything you need for safe investing — support service, consultations with specialists who will do everything possible to protect the investor from unsuccessful investments.