What Are the Different Categories of CryptoCurrency?
Exploring the different categories of cryptocurrencies from bitcoin to shitcoin
Bitcoin. Altcoin. Stablecoin. Memecoin. Shitcoin. Cryptocurrency is beginning to look like that one incredibly complicated role-playing game that keeps you coming back.
There's a lot of terminology and acronyms to break down when you dive into the world of cryptocurrency. Once you begin to dive into it, you'll find thousands of different coins, each with unique properties and values.
What distinguishes each of these coins and categories from another? Which should you invest in, and which ones should you avoid?
Bitcoin is the first official cryptocurrency that surfaced way back in 2008. This currency was created by a user online with the pseudonym Satoshi Nakamoto. This past month, Bitcoin has surpassed $50,000, proving itself as the most prominent and highest valued coin.
There can only be a max of 21 million of these coins can exist, which makes it a scarce resource. Unlike other scarce resources like gold, more bitcoin cannot surface in the ecosystem. This rule is what makes cryptocurrency free of any centralized manipulation.
Altcoins originally referred to cryptocurrencies forked from Bitcoin. Now they refer to the native cryptocurrency of any chain. Of these, ETH, the cryptocurrency of the Ethereum chain, is the most popular. Ethereum also enables specialized types of programs called "smart contracts" that can also use ETH.
These smart contracts make Ethereum more versatile, which has resulted in many other altcoins, many of which replicate similar smart-contract concepts. By the way, smart contracts are where "tokens," another type of cryptocurrency, are defined.
Note that the coins in the previous and following infographics were picked randomly of thousands. This is not an endorsement for any of these cryptocurrencies.
Stablecoins are cryptocurrencies where the price is a result of an outside asset. These assets can be gold, fiat, or another type of cryptocurrency. With the value remaining parallel to the real world, it makes it a relatively stable coin.
Stablecoins might be a popular choice among more risk-averse people looking to adopt cryptocurrencies.
Memecoins are a cryptocurrency related to, you guessed it, memes. These coins are often meant as a joke and are not to be taken seriously as a product unless you are original Dogecoin and you caught the attention of Elon Musk.
Even then, they don't have much value and have small communities of support. Be cautious of falling for the hype of memecoins, as many insiders and community leaders use them to pump and dump the market.
Shitcoins is a derogatory term to describe cryptocurrency that has no real value or purpose. These coins often have no goal and were created as a copy of existing currency. These coins are often considered scams and should be avoided at all costs by any serious investor.
Some argue memecoins fall under the shitcoin category. I only disagree because while meme coins have no real value, they have a purpose: being a meme.
From bitcoin to shitcoin, there are so many categories of coins circulating the crypto market. To summarize, bitcoin remains the original and the most popular of cryptocurrencies. Altcoins provide an improved alternative to the popular bitcoin, stablecoins are a start to a stable cryptocurrency market, memecoins are a great way to get your fill of memes in, and shitcoins are worthless. Now off to talking, speculating, investing, and learning more about cryptocurrency.