Cryptocurrency, or digital currency, is an invention of the Internet. Basically, someone out there thought, "hey, what if we can create a system where money is not bound by geography, like the internet" and lo and behold, now we have over 3000 cryptocurrencies going around.
Not all cryptocurrencies are created equal. Some feature amazing underlying blockchain technology behind its creation. Some were created ‘just because’, or as a joke. Some were part of an elaborate pyramid scheme. Some are pretty useless to keep as they are perceived as worthless – any cryptocurrency is only as valuable as the value assigned to it by a mass audience.
Like any other assets (think of stocks, or property), its price can rise and fall quickly, making them highly volatile and risky investments. Here are the top 10 cryptocurrencies and what they are known for.
Note: The ranking was taken from CoinGecko, a website that ranks cryptocurrencies by developer activity, community and liquidity. All figures are accurate as of mid-July 2016.
The original cryptocurrency and the one that started it all, Bitcoin was created and released in 2009 by Satoshi Nakamoto, an anonymous figure. Bitcoin has the biggest market cap to date around $10billion, overshadowing all other cryptocurrencies in this list, combined.
For most people, an introduction into cryptocurrencies is an introduction to Bitcoin. Because Bitcoin has such a big reputation, all other cryptocurrencies are referred to as ‘altcoins’ – alternative coins because they are alternatives to Bitcoin.
Created by Vitalik Buterin and launched in mid-2015 after a successful crowdsale, this platform was marketed as the "next generation cryptocurrency and decentralised application platform" and has a market cap of $1.1 billion.
Peer-to-peer smart contracts are what Ethereum is known for, aside from the cryptocurrency. It enables people to code and enact contracts without third parties. For example, this guide explains how you can set up a smart contract for a conference, where organisers can sell tickets, set a maximum number of attendees, and provide refunds automatically.
3!. Litecoin
Litecoin was released in October 2011 by former Google employee Charles Lee as an alternative to Bitcoin. Overall, Litecoin is similar (and familiar) – it can be mined, used as currency and transacted for goods and services.
It has a market cap of roughly $180 million, a far cry from its highest peak of $1.2 billion back in 2013.
At fourth place with $138 million in market cap, Monero is mostly used by individuals wishing to remain incognito on the web.
Known for: being a privacy-centric cryptocurrency
Known for: strong focus on banking market, real-time settlement
