It is probably clear that there are thousands of different cryptocurrencies available on the market today. Investors are attracted by great potential for returns, brought by the volatile market.
Today, we are looking at the number of existing cryptocurrencies and the potential future of the crypto industry.
How many cryptocurrencies exist in 2022?
Bitcoin was the first cryptocurrency, launched in 2009. Year after year, new cryptocurrencies were launched on the market and in the beginning of 2022, there were more than 9,000 different coins and tokens. Now, there are more than 20,000.
Of course, not all crypto projects were successful, and some of them are a new version of a well known cryptocurrency, such as Terra’s LUNA 2.0
What types of cryptocurrencies are there?
Coins vs. Tokens
First, it is important to describe the difference between coin and token.
Coins are cryptocurrencies, running on their own independent blockchain, for example Bitcoin and Ethereum.
Tokens run on another blockchain. For example, Shiba Inu runs on Ethereum.
While coins are created by miners, by processing and validating transactions, tokens tend to be pre-mind and released at launch.
Different cryptocurrencies, based on their aims
We can see several different types of cryptocurrencies, based on their aims and usage.
Utility tokens - Those cryptocurrencies are designed to enable specific functions in an application. Usually, they are used in DeFi apps, for processing transactions or providing liquidity. They are not created as digital currencies for making online payments.
Exchange tokens - Those are the native cryptocurrencies used by exchanges for processing transactions. An example for an exchange token is Binance Coin, the native token of the Binance exchange.
Payment coins - Bitcoin, Ethereum, Ripple’s XRP, Dogecoin, and many others, are some popular and commonly accepted payment coins. They are created to be accepted as a means of payment for different goods or services.
Stablecoins - Those types of cryptocurrencies, are pegged to a fiat currency, such as the UX dollar or gold. Their aim is to provide a stable store of value for crypto holders.
DeFi tokens - This type of cryptocurrencies is native to protocols that use automated smart contract platforms, for providing DeFi apps and services on the blockchain.
Are cryptocurrencies important?
There is a lot of attention on the cryptocurrency market, from investors from all over the world. Of course, there are both positive, and negative opinions, mainly because of the high volatility of cryptocurrencies.
Unfortunately there are many scam projects, in which investors are attracted and this is one more reason why many people don’t trust digital currencies.
However, the emergence of blockchain and smart-contracts is enabling fast, and digital transactions are bringing changes to the financial world, as well as in health, logistics, art, and many other industries.
Moreover, cryptocurrencies bring many opportunities for people all over the world, to transfer or earn funds, with only a few clicks.
With that said, we believe that cryptocurrencies are very important, and will have a big role in the future.
Well, the volatility of the market is one of the reasons why investors believe that not all cryptocurrencies are going to survive. Of course, the biggest focus is on Bitcoin and few other cryptocurrencies with proven stability.
Bitcoin, and stablecoins have an increasing market share, often seen as a safer investment. Anyway, as we always like to say, cryptocurrencies are a risky investment, and you should always do good research before investing.
And of course, never invest more than you are willing to lose!
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