The term ‘cryptocurrency’ became an official part of global linguistics back in 2009 when the pseudonymous Satoshi Nakamoto developed and implemented the Bitcoin network. It was developed on what is known a blockchain technology, which operates by way of multiplying select data items, then transmitting them individually to each and every device using the network at the time.
It goes without saying that the concept really blew up, attracting the attention of the market and industries all over. Not so long after its introduction, the network had garnered the global support of millions of traders and stockbrokers. Subsequently, many other developers saw the massive success of the pioneer network and immediately set out to produce crypto networks of their own, resembling the operational principle of Bitcoin; hence the term ‘Altcoin.’
To date, the online world hosts well over 1,000 individual crypto networks, inclusive of a number of large-cap coins. That said, there are hundreds of thousands of users who understand the operational standards of crypto. On the other hand, there are many more who always find themselves hovering above the very same question time after time; what is the difference between different cryptocurrencies?. It is an appropriate response to this that we provide thus a short and precise review on the actual difference between cryptocurrencies.
Different Cryptocurrencies Explained
Before we take it on to dwell on the main topic of the differences between cryptocurrencies, it is appropriate that we take you through a short description of the many cryptos that are available over the internet. Note that this review mainly touches on large-cap currencies, otherwise described as the more prominent cryptocurrencies.
Now, there are three main classifications of crypto, and these are given as:
This is the pioneer cryptocurrency, launched some 12 years ago. We classify this currency on its own simply because it was the first-ever blockchain, from which just about every other crypto network takes operational principles. In other words, BTC is the crypto of all cryptos, providing the crucial guidelines on which other developers built their own networks.
As stated before, the known ‘founder’ of the network is simply an alias. No one actually knows the true mind behind Bitcoin. After its inception, BTC experienced notable growth around 2014, then grew to massive extents in 2017, where its value capped at $20,000. As of today, a single coin is worth more than twice this amount, some $47,000.
Functionality wise, it is a P2P network, one that facilitates fully anonymous transactions. Each transaction is processed in transit over the blockchain, on the shared database, where each coin holder is given a unique private key, sued to decrypt their coins, and none else. That way, running the network becomes quite easy and very secure on both sides of each transaction.
The main comparison of cryptocurrencies is done mostly among these. As of today, the full list of active altcoins comprise thousands of different tokens. Again, most of these are simply substandard attempts at ‘upgrading Bitcoin’, where they even operate a lot like Bitcoin, only lacking in some specific areas.
However, there are some that are quite large, developed with notes taken from Bitcoin, but managing to come out very different from the pioneer. Some of these do not operate like BTC at all but are actually developed independently, using different algorithms altogether.
Good examples of currencies that are classified as altcoins include Ethereum, NEO, Bitcoin Cash, and Litecoin, just to mention a few. Ethereum is one such unique altcoin, meant to be a digital platform host, instead of a currency system like BTC. On the network, developers are given ample space to create new frameworks and even large applications.
These run on no blockchain networks. Instead, they are developed specifically for use in the so-called Decentralised Applications, otherwise known as dApps. They are used as native app currencies, generally favored for the advantages that come with using them, the likes of special rewards, discounts, and so on. They have some value, though relatively low, and can be used for mark-up exchanges.
Instead of running analytics on individuals like the difference between Bitcoin and Ripple, one can simply generalize their comparisons to the above-mentioned classifications. That said, the major differences are seen between dApp tokens and altcoins, where the tokens are not their own blockchains.
Instead, they ride on other networks. Again, altcoins are of a higher value than tokens, where the Ether is a good example, valued at some $3,000. Now, Bitcoin’s main distinctions from all of these are as follows:
- Unmatched security
- Market capitalisation at $47,000 per coin
That said, some altcoins are seen to be faster than BTC, as well as to be more stable than BTC, always fluctuating. Some altcoins, like Ripple, are not decentralized.
Cryptocurrencies are virtually limitless, literally, where more and more networks are developed each day. The main differences in cryptocurrencies are seen to be in service capabilities, security, and market prices. Other than that, the basic principles of crypto trade are more or less the same.