HODL. DApp. Ethereum.

No, these are not words from a newly-discovered alien language. They’re among the many new and key terms in the language of cryptocurrency.

Cryptocurrency isn’t just a novel investment option, and in many ways represents a different world altogether compared to traditional stocks and bonds. Between unfamiliar acronyms, emerging technologies, and keeping up with memes and tweets, just learning the basics takes time, even for seasoned traditional investors.

As with any investment, it’s important to understand exactly what you’re investing in before you start. That’s especially true when it comes to a speculative — and still evolving — asset like crypto. 

There are a few prerequisites we recommend before you buy into crypto, like stocking your emergency fund, paying down high-interest debts, and securing a traditional retirement plan. And, like we’ve said before, you should only ever put into crypto what you’re willing to lose, and experts recommend dedicating no more than 5% of your portfolio to these digital assets. 

But another item you should add to your checklist is at least a beginner’s understanding of what you’re getting into, including how crypto differs from other investment strategies, and the different factors that can affect a cryptocurrency’s market value.

Here are some of the terms and phrases that will help beginners better understand the world of crypto investing. 

Crypto Terms You Should KnowAltcoin

Any coin that’s not Bitcoin. Altcoins can be anything from the second-most popular coin, Ethereum, to any of the thousands of coins with very minimal market value. Experts say you should largely stick to the bigger, more mainstream cryptocurrencies as an investment.

[RELATED]: Follow These Personal Finance Experts if You’re Curious About Crypto

Bitcoin

The first and most valuable cryptocurrency, launched on Jan. 3, 2009. While its value has climbed steadily since then, it has seen wild fluctuations. In the past months alone, the price of Bitcoin has fluctuated from a record high of $60,000 to below $30,000.

Bitcoin Cash

A peer-to-peer electronic cash system that formed from a fork of the original Bitcoin. Where Bitcoin is widely accepted as too volatile to be useful as a currency, Bitcoin Cash is designed to be better optimized for transactions.   

[RELATED]: Bitcoin — The First Cryptocurrency

Block

Groups of data within a blockchain. On cryptocurrency blockchains, blocks are made up of transaction records as users buy or sell coins. Each block can hold only a certain amount of information. Once it reaches that limit, a new block is formed to continue the chain.

Blockchain

A digital form of record keeping, and the underlying technology behind cryptocurrencies. A blockchain is the result of sequential blocks that build upon one another, creating a permanent and unchangeable ledger of transactions (or other data).

Coin

A representative store of digital value that lives on a given blockchain or cryptocurrency network. Some blockchains have the same name for both the network and the coin, like Bitcoin. Others can have different names for each, like the Stellar blockchain, which has a native coin called Lumen. 

Coinbase

A popular centralized cryptocurrency exchange. Coinbase made history recently as the first cryptocurrency exchange to go public on the Nasdaq.

Cold Wallet/Cold Storage

A secure method of storing your cryptocurrency completely offline. Many cold wallets (also called hardware wallets) are physical devices that look similar to a USB drive. This kind of wallet can help protect your crypto from hacking and theft, though it also comes with its own risks – like losing it, along with your crypto.

[RELATED] A Crypto Wallet Can Help Keep Your Coins Safe. Here’s How to Decide if You Need One 

Cryptocurrency

A type of currency that’s digital and decentralized. Cryptocurrency can be used to buy and sell things, or as a long-term store of value.

Decentralization

The principle of distributing power away from a central point. Blockchains are traditionally decentralized because they require majority approval from all users to operate and make changes, rather than a central authority.

Decentralized Finance (DeFi)

Financial activities conducted without the involvement of an intermediary, like a bank, government, or other financial institution. 

Decentralized Applications (DApps)

Applications designed by developers and deployed on a blockchain to carry out actions without intermediaries. Decentralized finance activities are often completed using decentralized apps. Ethereum is the main network supporting activities in decentralized finance.

Digital Gold

Experts sometimes compare specific cryptocurrencies to real gold based on the way it can store and increase in value. Bitcoin is commonly referred to as digital gold.

The second largest cryptocurrency by trade volume, Ethereum is a crypto network and software platform that developers can use to create new applications, and has an associated currency called ether.

Exchange

A digital marketplace where you can buy and sell cryptocurrency.

Fork

When a blockchain’s users make changes to its rules. These changes to the protocol of a blockchain often result in two new paths — one that follows the old rules, and a new blockchain that splits off from the previous one. (Example: a fork of Bitcoin resulted in Bitcoin Cash).

Gas

A fee that developers have to pay to the Ethereum network in order to use the system. Gas is paid in ether, the native cryptocurrency of Ethereum. 

Genesis Block

The first block of a cryptocurrency ever mined. 

HODL

Stands for “Hold On for Dear Life” though the term originated from a user typo on a Bitcoin forum in 2013. It refers to a passive investment strategy in which people buy and hold onto cryptocurrency — instead of trading it — in the hopes that it increases in value. 

[RELATED]: The Price of Bitcoin Continues to Fall. Here’s How Worried Investors Should Be, According to Experts

Halving

A feature written into Bitcoin’s code in which after a certain number of blocks are mined (typically every four years) the amount of new Bitcoin entering circulation gets halved. The halving can have an impact on Bitcoin’s price.

Hash

A unique string of numbers and letters that identify blocks and are tied to crypto buyers and sellers.

Hot Wallet

A software-based cryptocurrency wallet connected to the Internet. While more convenient for quickly accessing your crypto, these wallets are a bit more susceptible to hacking and cybersecurity attacks than offline wallets — just as files you store in the cloud may be more easily hacked than those locked in a safe in your home.

Initial Coin Offering (ICO)

A way that funds are raised for a new cryptocurrency project. ICOs are similar to Initial Public Offerings (IPOs) of stocks.

Market Capitalization

For cryptocurrency, market cap refers to the total value of all the coins that have been mined. You can calculate a crypto’s market cap by multiplying the current number of coins by the current value of the coins. 

Mining

The process whereby new cryptocurrency coins are made available and the log of transactions between users is maintained. 

Node

A computer that connects to a blockchain network.

Non-fungible Tokens (NFTs)

Non-fungible tokens are units of value used to represent the ownership of unique digital items like art or collectibles. NFTs are most often held on the Ethereum blockchain.

[RELATED] Ethereum: What You Should Know Before You Invest

Peer-to-peer

Two users interacting directly without a third party or intermediary. 

Public Key 

Your wallet’s address, which is similar to your bank account number. You can share your public wallet key with people or institutions so they can send you money or take money from your account when you authorize it.

Private Key

The encrypted code that allows direct access to your cryptocurrency. Like your bank account password, you should never share your private key. 

Satoshi Nakomoto

The pseudonymous creator of Bitcoin. No one knows the true identity of Nakomoto — or if it’s more than one person.

Smart Contract

An algorithmic program that enacts the terms of a contract automatically based on its code. One of the main value propositions of the Ethereum network is its ability to execute smart contracts. 

Stablecoin or Digital Fiat

A stablecoin pegs its value to some other non-digital currency or commodity. A digital fiat represents a fiat, or government-backed currency on the blockchain. (Example: Tether, which is pegged to the U.S. dollar)

[RELATED]: The 10 Most Popular Cryptocurrencies, and What You Should Know About Each Before You Invest

A unit of value on a blockchain that usually has some other value proposition besides just a transfer of value (like a coin). 

Vitalik Buterin

Programmer who invented Ethereum in 2015.

Wallet

A place to store your cryptocurrency holdings. Many exchanges offer digital wallets. Wallets may be hot (online, software-based) or cold (offline, usually on a device).

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A portfolio strategist for American financial services firm Morningstar says that cardano could become a mainstream cryptocurrency alongside bitcoin and ether, forming a “big three” of mainstream cryptocurrencies.

Amy Arnott, a cryptocurrency-focused portfolio strategist at Morningstar, shared her views on crypto regulation, ether, and cardano in an interview with the Insider last week.

Noting that since many cryptocurrencies are not cash-generating, Arnott said it is difficult to determine a suitable price for them. However, she explained that ether has an in-built price to an extent because it is used to power decentralized finance (defi) transactions and support non-fungible tokens (NFTs). The strategist elaborated:

The fact that ether is used as a utility should provide some sort of price floor, but I’m not sure what that should be. A lot of people talk about a network effect where these currencies become more valuable as they are used more and there are more interdependencies and connections.

Arnott also believes that cardano (ADA) is a promising cryptocurrency that could join bitcoin and ether to form a “big three” of mainstream cryptocurrencies. She elaborated:

Cardano is similar to ethereum in that it’s a protocol that has a lot of potential technical applications. There’s a lot of enthusiasm about cardano, and also various stablecoins.

The Morningstar strategist continued to share her view on the institutional adoption of cryptocurrencies. “The interesting thing that’s happened over the past year or so is that institutional investors have been far more willing to adopt cryptocurrencies and look at them as an investment asset. As that trend continues we’ll see other cryptocurrencies become more mainstream,” she opined.

She noted that she would really like to see a diversified cryptocurrency index fund in the form of an exchange-traded fund (ETF). However, the U.S. Securities and Exchange Commission (SEC) still has not approved any crypto ETF, making it “very difficult for mainstream investors to gain exposure to cryptocurrencies.” Arnott opined:

Regulatory risk is a big issue – that’s been the driving factor behind a lot of the volatility over the past few months. If governments around the world clamp down on crypto in general, or bitcoin and ether specifically, that would be a large negative.

What do you think about the comments by the Morningstar strategist? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

In early June, when Brayden LeBlanc saw four influencers from the popular esports team FaZe Clan promote a cryptocurrency project, he thought he was about to make a safe and worthwhile investment. 

The project, a charity cryptocurrency token called Save the Kids, launched on June 5, and its creators promoted it as a way to make the world a better place. The members of FaZe Clan, who each have millions of social media followers, gave it the feeling of something new and exciting. LeBlanc, 21, from Saint John in New Brunswick, Canada, initially invested $94.

But hours after the cryptocurrency token’s launch, its value crashed. LeBlanc’s investment is now worth around $5.

“I feel like I’ve been played,” LeBlanc said. “These FaZe members are people that myself and millions of others look up to. We want to be like them.”

While the FaZe Clan members who promoted the token have since been removed or suspended by the team for their involvement, the episode has become one of the most high-profile examples of what industry watchers and an emerging group of online watchdogs say is a problematic dynamic in which influencers promote cryptocurrencies — with young people particularly susceptible to the hype.

The cryptocurrency boom of 2020 and early 2021 attracted a new wave of mainstream investor interest, particularly from younger people like LeBlanc, as more established cryptocurrencies like bitcoin and ethereum, along with alternative coins like dogecoin, skyrocketed in value.

That helped inspire a wave of new cryptocurrencies to enter the market, some of which turned to celebrities and internet influencers to become ambassadors and help gain traction. Kim Kardashian, Floyd Mayweather and Logan Paul are just a few of the personalities to have promoted altcoins — a catchall term for cryptocurrencies other than bitcoin.

But some have gone wrong. LeBlanc alleged the Save the Kids token was a pump and dump — a well-known scheme to boost the price of an asset. At least one of the FaZe Clan members has said he also lost money and believes a “con man” who abused the influencers’ trust is to blame.

“It just feels like me and the other investors were used as a way to get easy money,” LeBlanc said.

In the past year, the number of cryptocurrencies have doubled to 10,000 according to the tracking website CoinMarketCap. And while it appears the market is booming, more than $80 million has been lost in crypto-related scams since October 2020, according to a report this year by the Federal Trade Commission.

“With bitcoin’s value soaring in recent months, new investors may be eager to get in on the action,” said Emma Fletcher, an analyst with the FTC. “All of this plays right into the hands of scammers.”

The report found that people aged 20 to 49 were five times more likely to lose money in cryptocurrency investment scams than older age groups. The United Kingdom’s Financial Conduct Authority also revealed in a report this year that new and younger audiences were engaging in high-risk investments like crypto and were often driven by emotions and feelings. 

It found that the reasons for investing were often based on competition and novelty, rather than “conventional, more functional reasons” such as saving for retirement.

New cryptocurrency technology has created opportunities for scams to take place, according to Rachel Siegel, who provides crypto-related educational content to more than 150,000 followers on Twitter.

“The Save the Kids scam was very similar to a lot of other scams we see in the crypto space,” Siegel alleged. “I think that there is a lot of good ways this technology can be utilized. It just hasn’t been around long enough to clearly decipher legitimate projects from disingenuous ones.”

The FTC declined to comment on whether it was investigating the Save the Kids matter.

The allure of overnight wealth generated by cryptocurrencies combined with the sway of widely followed social media stars is seen by some in the cryptocurrency industry as a recipe for disaster. Lucas Dimos, 20, is one of a group of social media influencers trying to counter this problem. On his TikTok account, he tries to offer a reality check to his almost 300,000 followers on the exuberance of the crypto market and warn people away from expecting overnight success.

“People just go beyond the pale and gamble way more than they should have,” he said, adding that a number of people have contacted him claiming they had lost half their college tuition investing in crypto.

“These people are not investors, they’re gambling addicts. We need to stop treating it like a casino,” Dimos said. “Do your own research, invest in good, fundamentally sound projects and never invest more than you can afford to lose. … Those three things are everything I keep hammering home in people’s heads because it can get really exciting really quickly.”

He also said there’s little stopping influencers from profiting off their clout with little oversight.

“We’re in the Wild West right now,” he said. “The sheriff is not in town. Nobody’s going to come knocking at your door.”

Other social media personalities have gone further, forming something of an informal watchdog subculture to try to identify scams and warn people about them. One YouTube creator who goes by Coffeezilla (his real name is Stephen but he withholds his last name online due to the video content he creates) made a video on June 24 highlighting alleged issues with the Save the Kids cryptocurrency. He alleged the token’s developers had secretly changed its code at the last minute to allow early investors to dump their tokens and run off with the money.

“That to me solidified it as an ultimate scam,” he claimed. “It is a premeditated scam. That to me makes it even more egregious, and then you combine the fact that it’s about kids, and you have the holy grail of shady influencers crypto scams.”

A few days after Stephen posted his first video about Save the Kids, Frazier “Kay” Khattri, one of the FaZe Clan influencers who promoted the projected, issued an apology to his fans saying it was “irresponsible” for him to promote cryptocurrencies “without knowing more, & knowing now that they can do more harm than good.” 

Khattri also announced on YouTube that he had uncovered “significant evidence that a dishonest person abused his trust with me to scam everybody,” and that he and his lawyers were building a case to hold the “con man” accountable. 

According to Stephen, Khattri’s lawyers have issued him a cease and desist letter for “false and defamatory public statements.”

The other FaZe Clan influencers involved have not issued public statements, and they did not respond to an NBC News request for comment. However, on Sunday another FaZe Clan member, Teeqo, posted on Twitter that “life’s been an absolute nightmare the past month,” and that he’s “not sure when or if I’ll be back”

Stephen said he sees his videos as a chance to put pressure on people who may be trying to take advantage of young and impressionable people.

“If nobody’s holding anyone accountable, there is no fear,” he said. “It’s just sort of like you’re operating underground.”

But he also said he sees the need for authorities to step in.

The three coins I'm reviewing in this blog post are Ethereum, Tezos and NEO. Their symbols are ETH, XTZ and NEO.

I'm putting this one first simply because it is the best known, and with good reason. Ethereum's smart contract system allows for custom tokens to be built on the blockchain, making DeFi (Decentralized Finance) a real possibility. The smart contracts can do anything from NFTs and tokens to DAOs (decentralized autonomous organizations). A major downside, however, is gas fees. When the gas fees are high, it makes using ETH very hard for a blockchain beginner.

I give Ethereum an 8/10 for smart contracts.

Tezos is an interesting coin, since unlike Ethereum it started as a PoS (proof of stake, not to be confused with a certain other acronym) coin. It also functions similarly to a DAO in that stakeholders vote on how the blockchain will function. This means that there are no controversial hard forks in the chain and the system is constantly improving in the vision of the public. It has extensive documentation on the creation of tokens and contracts. A downside is that Tezos is less popular, so tokens created on the platform have less traction.

Tezos gets a 7/10 from me.

Neo is my personal favorite here. Low gas fees, easy token creation, tons of wallet choices, the sky is the limit. On the front page of the developer portal, it makes this clear. The page shows that tons of possibilities are available to developers, including tokens, DeFi contracts and games. It supports tons of programming languages for its contracts, compared to the less-used ones of ETH. Neo honestly seems like a great implementation of the smart contract system, and I recommend any devs reading this take a look at the possibilities.

Neo scores an amazing 9/10.

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Mark Cuban, a believer of cryptocurrency, has been endorsing cryptos for a long time. He had earlier talked about Defi Decentralized Finance in Ask Me Anything (AMA) on the Reddit WallStreetBets forum. 

He also talked about bitcoin on his Twitter handle with Tyler Winklevoss. He had also talked to Changpeng Zhao, Binance CEO, and he also shared his love for NFTs (non-fungible tokens) on platforms like Rarible and Top Shots. 

Once again, Mark Cuban has expressed his views about ethereum in an interview, where he highlighted the Ethereum smart contracts. The billionaire Shark Tank, the Dallas Maverick owner, expressed that Ethereum smart contracts will create big troubles for the big Saas (Software as a service) companies. 

According to him, the simplification of smart contracts on the Ethereum blockchain will be an issue for the companies. Their work will be disrupted due to Ethereum. Citing an example, he explains in an accounting firm where the accountants are trained and are paid as accountants, and there are thirty, forty validators around the world that are validating. Then they are paid in tokens, once instructed. Now they look for the general ledger entry, and they all have the consensus on the general ledger entry, and they don’t know each other. There would be no Enrons. You wouldn’t have the level of frauds that you have now. 

Cuban became a millionaire after selling his company MicroSolutions in 1990 to CompuServe. He then sold Broadcast.com to Yahoo in 1999 and became a billionaire. He has been in the cryptocurrency business for a very long time now and has become an expert in the field. 

He had informed that he bought some bitcoin through Coinbase years ago, but he preferred to keep mum about it publicly and has now made it clear to everyone that he sees more potential in Ethereum than bitcoin. 

He said that bitcoin has become stagnant with a store of value, even though there is a blockchain. Cuban believes that bitcoin buying and selling might have been a risk, but with Ethereum, he is a little bullish with smart contracts. There is a simplicity of creating smart contracts stored in full on the blockchain, which are then immutable, right, and now one can witness what other things can happen with this. 

Hence, Cuban is not a believer in bitcoin as an investment. He believes that bitcoin is better than gold and said that whether bitcoin or ethereum or any other cryptocurrency, when somebody owns that, they become their own personal banker. 

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The decentralized finance movement was a ticking time bomb waiting to detonate when it finally exploded in 2020. From automated market makers to the industry’s current obsession with liquidity mining, DeFi has grown leaps and bounds over the last year.

Most decentralized finance applications are deployed on the Ethereum blockchain, bringing billions of dollars onto the network and pushing it to its maximum operational threshold. While the capabilities of the underlying network may seem like the only thing holding DeFi back, Ethereum isn’t slacking either.

While some vocal community members believe this pump is the result of a bubble similar to the initial coin offering boom of 2017, there are many reasons to think this isn’t the case.

DeFi has brought a breath of fresh air to the cryptocurrency space, spawning countless new tokens that have revolutionized decentralized lending and borrowing services. The short-lived Yam Finance, which attempted to simplify the yield farming experience and transform blockchain governance into a practical model, quickly became one of the fastest-growing platforms in the DeFi space.

Projects like Uniswap even resurrected the concept of decentralized exchanges using an automated market maker model. This allows the system to price trades without relying on liquidity from a counterparty. Instead of using order books, the AMM prices assets using the ratio of tokens in a liquidity pool to determine supply and demand.

Uniswap’s surge in use has been fueling the DeFi engine for quite some time, with daily trading volume rising from around $1 million to $1 billion between July 2020 and September 2020. Without being tied down by order books, Uniswap can execute orders on-chain, meaning transactions are made and settled on the network directly, and this has become one of Ethereum’s most prominent features.

This has driven the number of smart contract calls on Ethereum to skyrocket, reaching new all-time highs and creating a token economy that is increasingly being managed by code. However, while DeFi’s trustless ecosystem has brought greater efficiency levels and more automation opportunities, it’s still far more complicated than traditional offerings have become.

This is a major problem that DeFi needs to address before it can attain more mainstream adoption. The act of buying and selling cryptocurrencies already needs work from a consumer’s perspective, but in its current state, DeFi is still very much “function over form.” Outfits like Yearn.finance have brought algorithmically managed portfolios to DeFi, but there’s still a lot of work to be done.

“Yield farming is not sustainable, but it is helping to bootstrap the industry in the short term and attract developers,” said Rune Christensen, founder of veteran DeFi platform MakerDAO, in a conversation with Cointelegraph, adding:

He also mentioned that DeFi is currently fully reliant on the Ethereum platform, especially because it’s dependable on composability between current DeFi applications and ETH as a primary source of collateral and stability. However, there may be other issues in the way of DeFi’s growth.

This is a sentiment shared by many members of the community. According to Illia Polosukhin, CEO of Near Protocol — a blockchain that allows for the creation of decentralized applications and is interoperable with Ethereum — DeFi might just keep growing on Ethereum.

“Most of the applications are built to work with and around current limitations and they would be only moderately successful on other chains,” he said. “It’s not just the apps themselves, but the whole ecosystem of users, assets, other applications, and integrations.” However, there may be other issues in the way of DeFi’s growth.

Those issues include the launch of Eth2 and its potential effects on decentralized finance. The MakerDAO founder claimed that it will likely have a smaller impact than expected, with fewer new DeFi apps. “Layer 2 scalability solutions with high-security bridges will probably enable more retail-focused DeFi,” he said.

Introducing more complexity is taxing for the end-user, especially with the rough user interface/user experience systems that seem prevalent throughout the space. Still, this would allow DeFi smart contracts to interact and transact automatically without any human help across multiple platforms.

At the moment, Ethereum benefits from application composability and greater liquidity than any other smart-contract-enabled blockchain, but dismantling either of these can open the floodgates for DeFi apps to shift platforms.

The potential effects of Ethereum 2.0 on DeFi are still unclear. Ideally, the platforms should bring scalability, composability and liquidity, but this is no mean feat, especially while many decentralized applications are migrating to layer-two solutions and application-specific chains. According to Kevin Davis, chief technology officer of the Kava DeFi platform:

Wrapped assets are also a considerable part of the DeFi space, with Wrapped Bitcoin (WBTC) bringing the original cryptocurrency, Bitcoin (BTC), to smart contract platforms. Wrapped Bitcoin is an ERC-20 token backed by actual Bitcoin, and it has around $6 billion worth in circulation on Ethereum at the time of writing.

While most DeFi tokens are built on the ERC-20 standard — a framework for designing tokens on Ethereum — ETH is not. Because this framework was only created after ETH, the token isn’t technically compliant with the ERC-20 standard. But with Wrapped Ether (WETH), it can now also effectively be used as a regular token on DeFi platforms.

With wrapped assets, Ethereum can bring liquidity to any tokenized asset on a variety of platforms, bringing hundreds of millions of dollars to the network. The surge in smart contract calls and the overall number of transactions has pushed ETH gas fees to a new level, with high gas prices becoming quite typical. Polosukhin told Cointelegraph:

During a token launch, this can be catastrophic, as hordes of users flood the network to get their hands on it as soon as possible. This leads to miners prioritizing transactions with higher fees, which then inflates transaction costs as the people in the queue try to cut to the front of the line.

While high transaction fees could hurt the space, more incentivized miners ultimately secure the network better. From this perspective, the increase in miner fees could also be seen as a sign that Ethereum is becoming more secure. However, this makes the barrier for entry higher than some would be comfortable with. Small investments make small profits, and with similar fees for both $100 and $100,000 transactions, users transferring large amounts have an undisputed advantage.

That being said, Ethereum is shifting away from the proof-of-work model that incentivizes miners through block rewards and miner fees, instead opting for a proof-of-stake model on the upgraded Eth2 network. Further, the median Ethereum average weekly transfer value has been steadily growing, which is a strong signal that the network is shifting toward fewer novice investors.

Beyond the promise of Ethereum 2.0, scaling the “world computer” has been an ongoing effort for the last few years. The recently launched Optimistic Ethereum testnet is a layer-two scaling solution project that offers instant transactions at a much lower cost. Further, this can be implemented using the current Ethereum infrastructure, and popular DeFi projects like Synthetix, Uniswap and Chainlink have signed on as early adopters.

DeFi and Ethereum are a codependent couple, and while their progress and development run in parallel, they are both growing steadily yet independently. With solutions like the Optimistic testnet and the upcoming shift to proof-of-stake, the Ethereum platform seems primed for even more DeFi action in 2021.

According to MakerDAO’s Christensen, the biggest bottleneck for developing new DeFi applications is “the lack of clarity around how to interact safely with legal and real-world political and financial systems in order to gain real economic relevance.”

As both ETH’s and the DeFi industry’s market capitalization grows, new projects are setting up shop faster than ever before. DeFi has grown into a burgeoning arena for innovation and development in the blockchain space, and with how it grew against insurmountable odds last year, there will be far more windows for growth in the times ahead.

(Photo : Screenshot From Pexels Official Website) Cryptocurrency 'Scheme' Revealed | Are All Cryptocurrencies Legit?

Cryptocurrency in itself is a legitimate form of digital currency but it is important to dissect it further to know the difference between coins and tokens.

While there are thousands of different tokens and coins out there, there could be just a number of them that can be considered as legitimate. 

According to the tweet by @mathieu_ouioui, there could be a way for people to make their own tokens with little to no value but still profit from them.

The account noted that people can create a coin and simply add 50k of their own money for some liquidity and easily make a video in order to advertise "it," which was earlier referred to as a "coin."

After advertising, the creator can then wait for people to buy it, then the creator can remove their 50k liquidity as well as maybe a 330k bonus while keeping 10% up to 15% of supply. After this, the creator can then let the project become "community driven" while also maintaining full control of the total liquidity.

The sketchy move was then discussed showing how some people can easily create a token, promote it, pull their money out, and create a hype to increase the token's growth.

When asked by another Twitter user to specify which token is referred to in the Tweet, @mathieu_ouioui then replied "$MM".

Another commenter to the post, @drewblockchainz, corrected the statement saying they aren't really coins unless they have their very own chain. The commenter then stated that they are called tokens, and that these are only copied smart contracts being referred to.

For more insights as to the token that was being referred to, $MM is a cryptocurrency that not a lot of people know about.

According to @sleeplessinva, $MM comes from @techleadhd, which was described as the "fiat-alt coin" we all have been looking for."

As per the tweet by @sleeplessinva, $MM actually grew from $1 to $21 in just a couple of days. The tweet then included the hashtags #cryptocurrency and the hashtag #MillionToken.

The conversation on Twitter shows a lot of gray areas that exist within the whole "cryptocurrency" discussion. For those that are thinking of investing in cryptocurrency, it is important to do sufficient research beforehand to make sure the movements or investments made are either less risky or more profitable.

Read Also:  Crypto Miners to Pay Higher Rates for Electricity in Kazakhstan | 'Negative Impact on Investment Attractiveness'

Just like any investment, it is important to maintain safe investing by doing proper research and only taking manageable risks. While the top 10 cryptocurrencies are still recovering, it is still unclear as to whether they will be bullish all the way to the moon. 

As of the moment, although Bitcoin is still quite far from it's all-time-high, the cryptocurrency can be seen recovering at a 3% increase during the past 24 hours.

Ethereum has also grown by 6% during the last 24 hours according to WhaleBots Alert on Telegram.

Disclaimer: TechTimes is impartial as to whether or not $MM is not a legitimate cryptocurrency. The story is focused on how easy it can be to create a coin.

Related Article:  [Breaking] South Korea Crypto Exchanges Could Sue Government for Alleged 'Unconstitutional' Banking Requirements

This article is owned by Tech Times

Written by Urian B.

AT A GLANCE · The recent launch of Micro Bitcoin futures follows the success of the larger contract, which has grown tenfold in less than five years · Despite recent decline, ether continues to grow as a percentage of crypto market share, confirming that there is room for more than one dominant coin

Things have changed. Cryptocurrency has slowly made the jump from being a fringe concept dominated by young tech enthusiasts to a viable alternative asset class held by many blue blood U.S. institutions. This transition started slow but has recently picked up considerable steam. In fact, a recent headline announced an actual sovereign nation (El Salvador) as recognizing bitcoin as a legitimate and legal tender.

This particular milestone is interesting in that the commonly held belief was that governments would be opposed to cryptocurrencies and eventually attempt to regulate them out of existence. The existence of an alternate means of exchange, outside sovereign fiat currencies, seems like it should be cause for alarm, and the fact that this hasn’t happened yet is somewhat confusing. Recently, Senator Elizabeth Warren gave a speech in which she aggressively stressed the need to regulate cryptocurrencies, but it seemed to gain little traction.

Bitcoin and Ethereum Futures

Of the milestones that have marked the growth and transition of cryptocurrencies, none are greater than CME Group’s launch of futures contracts in both bitcoin and ether. Yes, there are plenty of global exchanges that preceded the CME’s involvement, but none have the stringent regulatory history of CME nor do they have the long track record of offering deeply liquid institutional derivative products.

Since the first Bitcoin futures contract launched in 2017, its growth has been tenfold in less than five years and currently trades almost $5 billion in notional value per day. The Bitcoin and Ether futures contracts are geared more toward institutional use and their growth both mirrors and fuels their increases in adoption.

One phenomenon that has sparked curiosity was the fact that notional volume in futures and other derivatives exceeded cryptocurrency spot volume during the massive correction occurring in May. Part of this is a natural desire to avoid capital gains taxes in long held crypto but it also underscores the existence of huge institutional involvement already participating in the space. The recent launch of CME Micro Bitcoin futures contracts, designed for both institutions and sophisticated, active traders, is already showing promise in creating a complementary marketplace where liquidity could thrive.

Ether Gains Market Share

Even as recently as seven months ago it seemed that bitcoin’s lead over ether in the crypto world was insurmountable. Bitcoin accounted for 70% of the total cryptocurrency market, fueled in part by big names like Stanley Druckenmiller and Paul Tudor Jones expressing positive sentiment. Since that time bitcoin’s dominance has dwindled. Bitcoin now accounts for 40% of the total crypto market while Ethereum has moved up to 15%.

Year to date performance in both assets reflects the growing interest in ether. Since January 1, bitcoin is up 41% while ether has rallied a staggering 255% in the same time period.  Of course, there are some key differences in the technology of the two cryptos that may have driven investment into ethereum from bitcoin, or it may just be a desire to diversify. Either way, the new landscape confirms that there is room for more than one dominant coin. 

Although it seems impossible to predict price movements in such highly volatile assets a couple things seem true: The first and most obvious is that new participants mean new buyers, not sellers and this, by definition, drives prices higher. Second, as each month passes without significant opposition, crypto becomes more entrenched.

Finally, I believe it’s folly to assume that because there are two current leaders in the space that the question of what coins will survive is settled. Things move fast in the crypto world.

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As with the feverish debate around Bitcoin and its carbon footprint, there has been no shortage of discussion surrounding cryptocurrencies and the energy they consume.

But this back and forth around crypto’s environmental impact is missing a glaring point. It is important to recognize that crypto is still in its very early stages, not dissimilar to where the internet was in 2002. The entire space is going through its Amazon moment. The first decade of this cryptocurrency experiment has grown far beyond anybody’s wildest expectations. At the same time, it has allowed those of us in the industry to identify what works and what doesn’t.

For example, the proof-of-work consensus algorithms (the mathematical problems that Bitcoin miners must solve) that power the Bitcoin network do indeed require a lot of energy. But what these arguments about Bitcoin’s environmental impact obscure is that the broader crypto ecosystem is in the midst of a shift towards a cleaner, greener, more sustainable future that will result in significantly lower carbon emissions.

This can be seen with the launch of Ethereum 2.0 and the move from a proof of work (PoW) consensus to a proof of stake model (PoS). PoW refers to the decentralized system that powers the Bitcoin network, with the model requiring huge amounts of energy to validate transactions and mint new tokens. But PoS allows miners to mine and validate block transactions based on the amount of coins that they hold.

Because PoS demands significantly lower hardware requirements than PoW, the energy needed to facilitate secure transactions will only continue to fall in the future. Some forecasting models show that Ethereum 2.0’s PoS model will be 99% more energy efficient than PoW models.

We are already seeing the results of what we can expect from PoS, with the Ethereum network consuming almost 100 Twh less than the Bitcoin network. Ethereum is hardly alone in this consensus revolution, with ascendant, next-generation blockchains like Cardano, Polkadot, EOS and Cosmos each implementing their own versions of PoS.

But even if we put aside these developments and focus strictly on the assertion that crypto is a threat to the planet, it is important to distinguish the sources of energy that crypto miners use, with data indicating that most of the electricity used for crypto mining comes from renewable sources.

Research from the University of Cambridge shows that the renewable share of these energy mining pools is as high as 78%. Although there are exceptions depending upon which region of the world you’re focusing on, hydroelectric power, in particular, is rapidly emerging as the de facto power source for crypto-mining operations.

Another factor to consider is that crypto miners are increasingly using excess electricity that would otherwise go to waste. The emergence of crypto mining farms has soaked up extra capacity and prevented the waste of unused renewable energy.

It is also important to note that the traditional international financial system requires significantly more energy than the Bitcoin network. All of the disparate parts that make up the whole of the global banking network – banking data centres, card network data centres, ATMs and bank branches – use a lot of energy. In fact, the traditional financial sector provides financing for some of the most environmentally damaging projects on Earth.

If we’re really looking for an ecologically destructive force, we should focus on gold mining. After all, this is an industrial sector that is heavily dependent upon fossil fuels. Even the industry’s main lobbying arm, the World Gold Council, has acknowledged the metal’s huge carbon footprint, highlighting in a recent report that the industry's emissions need to fall by 80% over the next 30 years in order to meet the Paris Climate Agreement targets.

So if we acknowledge that traditional finance and mining account for a significantly larger share of greenhouse gas emissions than crypto, the question we should be asking ourselves is how crypto and blockchain can actually lead the way and become a positive, transformative force for the energy sector, slashing operating costs and opening up a new window of transparency.

Use cases are not hard to find. Blockchain projects have already been deployed in a range of different fields, from wholesale electricity distribution and peer-to-peer energy trading to electricity data management and commodity trading.

One area that is particularly ripe for disruption is the global supply chain, in particualr the energy sector. Amidst this transition between polluting fossil fuels and a clean, renewable future, we should be looking for ways to mitigate and streamline the processes involved in extracting and transporting energy. Blockchain provides us with a platform that provides real time speed and efficiency, not to mention traceability and transparency.

The World Economic Forum has joined forces with more than 100 organizations and 20 governments to accelerate the deployment of blockchain for supply chains – responsibly, securely and inclusively.

The multistakeholder team, represents large shippers, supply chain providers and governments – including Maersk, Hitachi, Mercy Corps, Korea Customs Service, Llamasoft and Ports of Los Angeles, Oakland, Valencia and Rotterdam.

The group will co-design an open-source toolkit to guide supply chain decision-makers towards utilizing blockchain to maximize the benefits and minimize the risks of the technology.

The World Economic Forum’s project, Redesigning Trust: Blockchain for Supply Chains, is part of our Platform for Shaping the Future of Technology Governance: Blockchain and Digital Assets.

Companies globally can join our efforts to streamline new and complex technologies like blockchain, helping to revolutionize sectors and ecosystems and build trust globally. Click here to find out more.

We’re seeing this unfold in the real world. Major Indian steel conglomerate Tata Steel is partnering with HSBC to experiment with smart contracts on the blockchain, exporting raw materials around the globe while cutting contract settlement times from a matter of weeks to a matter of days. Imagine all of the energy saved in the process.

Meanwhile, the Carbon Utility Token (CUT) is an example of a growing class of green assets designed in large part to help corporations manage their carbon allowances. The sale of each CUT token goes towards investments in carbon capture and carbon offsetting programs, representing a tangible step towards carbon neutrality in the crypto ecosystem. As more and more corporations begin to add Bitcoin and other cryptocurrencies to their balance sheets, it’s good to know that CUT provides an avenue to completely offset the carbon footprint behind each coin.

While there are certainly challenges ahead, crypto and blockchain have the potential to lead us towards a much greener planet, with the discussion surrounding crypto and energy stimulating us to hasten our transition to clean energy sources while providing us with the tools to do so.

With the craze surrounding cryptocurrency, it was only a matter of time before the sports world joined in. With the NBA leading the way with NFTs (non-fungible tokens) in crypto-collectible digital media, other leagues want a cut of the success, too. Now, both the MLB and NHL are finding ways to incorporate crypto into their businesses, and it’s only just the beginning. Many players are ahead of the game, receiving cryptocurrency as a portion of their salary.

First things first. A basic overview of cryptocurrency: High-powered computers digitally mine Bitcoin, Ethereum, and other cryptocurrencies and store them on a blockchain, or a public ledger of all transactions. The appeal, in addition to potentially incurring a large profit based on the volatile market, is the heightened security of the blockchain and the presumption that it’s the currency of the future.

Many sports stars are taking action now to get a piece of the profits. Trevor Lawrence signed a deal with crypto investment platform Blockfolio. His sign-on bonus was all paid in cryptocurrency. Other players are following suit and adding clauses in contracts to receive crypto as part of payments. 

Patrick Mahomes dabbled in the world of NFTs, launching a digital art gallery and selling pieces to benefit his foundation. In an age where the technology exists for players to expand their brand and wealth, many find digital currencies as a way to achieve financial success.

While the MLB didn’t initially accept cryptocurrency as a form of payment, things are starting to change. Players, managers, and owners look for ways to incorporate it into their own lives. New York Yankees manager, Aaron Boone, revealed in an interview via Fox Business that players and managers constantly discuss Bitcoin and other cryptocurrencies in the clubhouse. He says many on his staff have invested, and even he has “dabbled a little bit” in the market. 

He’s also involved in Athlete Direct, a platform where athletes can sell their sports memorabilia directly to fans. The site includes an option to use NFTs, a baby step to get players and fans used to digital currency.

But one of the most surprising moves came from the Oakland A’s. In an unprecedented move, the baseball team became the first MLB team to sell a luxury box for one Bitcoin. Voyager Digital was the buyer. Around the time of the A’s announcement, their bitcoin purchase was reportedly worth about $59,240, according to CoinDesk.  The going price for the suites was $64,800. 

With the NBA, MLB, and NFL players starting to get involved in cryptocurrencies, the NHL decided to test the waters too. The San Jose Sharks will start accepting cryptocurrency payments for larger-scale items next season. This includes things like season tickets and suite leases, according to NBC Sports. The team president, Jonathan Becher, said that other purchases, like single-game tickets and merchandise, will be evaluated and considered in the future. 

Because the organization accepts Paypal payments, and they accept cryptocurrencies, it helped the team make the decision. Becher explained his reasoning. “We’re accepting PayPal, so then by definition, we’re accepting cryptocurrency. Why not embrace it and make it more visible as opposed to just doing it through a third party?” 

With more and more sports teams finding ways to incorporate cryptocurrency into their rotation, look for it to become a normalized process in the future.

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The war between Binance Smart Chain [BSC] and the Ethereum network is intensifying in the wake of tremendous DeFi activity. The competition to become a more efficient and better blockchain is far from over and is taking turns that no one ever expected.

Ethereum maximalist reportedly deployed a contract called “TANKS OF TIENANMEN” to the Binance Smart Chain. This was in response to a series of tweets by Binance CEO, Changpeng Zhao who said that “Ethereum is a network for rich guys, but soon those guys will be poor.“

As CZ criticized Ethereum, singling out its Achilles heel: high fees, the ETH community lashed back by creating a contract with a controversial Chinese subject referring to the infamous Tiananmen Square protests that were student-led demonstrations held in Tiananmen Square, Beijing back in 1989.

For the most part of the year, Binance Smart Chain has witnessed a greater daily transaction volume than Ethereum. As Ethereum’s fees became restrictively high, many people were encouraged to hop onto an alternative despite previously held views regarding centralization and censorship by one of the world’s largest cryptocurrency exchanges.

Decentralization cannot be taught in a day and even as the creation of BSC in itself, as most experts claim, goes against the very ethos of this industry, it still trumps, at least it is currently doing a lot better than Ethereum in terms of activity.

Hence, the Ethereum maximalist went on to create a contract for which Binance could essentially get into trouble if not taken down.

According to few in the community, the consequence of this stunt could potentially draw physical harm on Binance employees. Some claimed that the move was not necessary since it is already known that Binance Smart Chain is centralized in nature and that CZ can always take down the contract.

Commenting on the weekend fiasco, the founding partner of Primitive Crypto, Dovey Wan believes that it would not have any impact on Binance. Her tweet read,

“Literally zero impact LOL. Just reveal how childish they are, not taking a side simply commenting on this behavior. Chinese gov failed in shutting down even Huobi/Okex while having them operating primarily in the mainland and what they can do with BSC again?”

She defended Binance Smart Chain and went on to say that the latest contract has nothing to do with “cypherpunk spirit” and that “cypherpunk can do much better”. The exec also added,

“If Ethereum ppl believe the future of Ethereum is as bright as Vitalik gone silent, they should know such naive “attack” can barely harm BSC”

By now, investors will have a relatively good understanding about the biggest cryptocurrencies in the market, however, the more niche coins such as cardano, litecoin and polkadot to name just a few are now also being wrapped into exchange-traded product (ETP) format.

With bitcoin, ethereum and others setting fresh all-time highs through the first half of 2021, many investors have started looking to the more dimly lit corners of the crypto universe, to the coins whose day in the sun is potentially yet to come.

Happy to service this demand, ETP issuers have taken to launching products targeting increasingly innovative, early-days – and frankly, niche – digital assets, to offer the reassurance of on-exchange trading to those looking to speculate on ‘the next big thing’.

Cardano ADA

The largest of the coins on our list is ADA, from the cardano platform, which has a market cap of $42.5bn.

The cardano infrastructure relies on Ouboros, currently considered the world’s largest proof-of-stake (PoS) protocol. The advantage of this framework is its much lower energy consumption versus the proof-of-work (PoW) protocols currently used by most cryptos. In fact, the Ethereum Foundation has announced it plans to shift its native currency onto PoS.

Cardano allows developers to construct decentralised applications and conduct peer-to-peer transactions via its native token, ADA.

Now the world’s fourth-largest crypto infrastructure, cardano has a settlement layer, similar to bitcoin, and a computation layer, similar to ethereum.

At present, the 21Shares Cardano ADA ETP (AADA) and the Valour Cardano SEK ETP offer investors access to the coin within an exchange-traded wrapper.

Ripple XRP

Starting life as opencoin before transforming into ripple, the platform has its own token, XRP, which is designed to allow financial institutions to transfer money with minimal wait times and fees.  

By 2018, over 100 banks were using ripple’s xcurrent messaging technology but avoided XRP due to concerns around volatility.  

Based on a common shared ledger, the platform relies on a network of independent servers that compare transaction records. Ripple can support a range of tokens representing fiat currencies, cryptocurrencies, commodities and other units of value such as frequent flier miles and mobile minutes.

A sticking point for the platform was the lawsuit brought against it by the Securities and Exchange Commission, with the regulator stating XRP had been illegally marketed to retail investors without making clear the risks involved in trading the asset.

This update saw 21Shares remove XRP from its mixed-basket HODL ETP but investors can still gain exposure via the 21Shares Ripple XRP ETP (AXRP) and the CoinShares Physical XRP (XRPL). At present, Ripple has a market cap of $31.8bn but in 2017, was briefly the world’s second-largest crypto.

Polkadot DOT

Moving down the list in terms of market cap, the $14.9bn polkadot platform was created by ethereum co-founder, Gavin Wood. 

Designed as a sharded heterogenous multi-chain architecture, polkadot allows external networks and customised layer one ‘parachains’ to communicate, creating a connected internet of blockchains.

Wood developed the polkadot protocol while mulling the sharding hurdles that might be faced in the ethereum 2.0 specification. By embedding sharding, the platform breaks the blockchain network down into separate entities to reduce latency – allowing it to scale and process more transactions per second.

Currently, exchange-traded exposure to the protocol is offered by two products from Swiss issuers, the 21Shares Polkadot ETP (ADOT) and the Valour Polkadot SEK ETP.

Litecoin LTC

Beginning as an early bitcoin spin-off in 2011, litecoin is a peer-to-peer digital asset released via an open-source client on GitHub, with a market cap of $9.7bn. 

Though bearing many similarities to bitcoin in its technical makeup, litecoin differentiates from the mega -ap coin in its lower block generation time (two-and-a-half minutes versus ten minutes), a higher maximum number of coins, and different hashing algorithms and user interface. 

The coin also uses scrypt in its PoW algorithm, which is a sequential memory-hard function that requires more memory than non-memory-hard equivalents. As a consequence, the devices used for Litecoin mining are more complex and expensive than those used for bitcoin prospecting.

The CoinShares Physical Litecoin (LITE) and ETC Group Litecoin ETC (ELTC) currently track the performance of the asset.

Solana SOL

With only a marginally smaller market cap of $9.1bn, solana is a third-generation PoS blockchain that creates a trustless system for determining transaction time called Proof of History (PoH).

Versus a PoW protocol, a PoH orders transactions in a series of hashes, allowing validators to process and transmit less information in each block, in turn reducing the time it takes to confirm a new block. 

Solana also uses other capabilities – Tower BFT, Turbine, Gulf Stream, Sealevel, Pipelining, Cloudbreak, Archivers – to create a network with a 400 millisecond block time, versus 10 minutes per block for bitcoin and 15 seconds per block for ethereum.

Earlier this week, the first ETP targeting solana, the Solana (SOL) ETP (ASOL), was launched by 21Shares.

Stellar XLM

Finally, we have stellar, an open-source, decentralised protocol for digital currency to fiat currency transfers with a market cap of $6.3bn.

Founded by ripple co-founder, Jed McCaleb, the platform uses the SCP protocol created by Stanford professor David  Mazières.

Since 2014, stellar and its native token XLM/lumens have been backed by $3m in seed funding from Stripe. The platform was then integrated into South African messaging platform, Vumi, and Nigerian microfinance facilitator, Oradian, in 2015.

A year later, the crypto integrated with Deloitte to create cross-border payments application, Deloitte Digital Bank. And since, stellar has partnered with the ICICI Bank in India, African mobile payments firm Flutterwave, French remittances company Tempo Money Transfer, IBM and the Ministry of Digital Transformation of Ukraine.

At present, investors can gain exposure to the digital asset via the 21Shares Stellar ETP (AXLM).

Just click on any of the ETF links in the article above and you will get access to a whole host of data including:

Please note: The tool is provided by ETF Logic who shall process your personal data in accordance with their privacy policy.

Ethereum 2.0, the network upgrade of ETH, has crossed 3 million ETH under its deposit contract as the Ethereum community extended their support for ETH 2.0. The total value of ETH locked under the network upgrade jumped above $5.4 billion after the recent jump in the price of the world’s second-largest cryptocurrency.

Ethereum 2.0 started its journey in December 2020 with the launch of Beacon Chain. ETH 2.0 deposit contract crossed 1 million ETH within the first week of its launch. The Ethereum network has started its journey to shift from the current proof-of-work network to a more efficient and improved proof-of-stake network.

The ETH price is up nearly 150% since the start of 2021. The world’s second-largest digital asset registered an all-time high of $1,870 on 13 February as the total market cap of Ethereum jumped above $210 billion. As of writing, the cryptocurrency is trading near $1,750 with a total market cap of $200 billion.

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The CME Group launched Ethereum Futures Contracts last week and the Group reported trading of 388 ETH contracts with a total trading volume of $33.6 million on its first day. Additionally, ETH’s on-chain network activity has increased significantly in the last few months as now the network is settling more value than BTC.

Finance Magnates earlier reported a significant jump in Ethereum-related weekly crypto inflows. ETH accounted for nearly 80% of the total $245 million crypto inflows during the first week of February 2021. Institutional demand for the world’s second-largest crypto-asset jumped substantially since the launch of Ethereum 2.0. Now, Grayscale has 3.13 million ETH under management with a total value of $5.67 billion. The CEO of Grayscale Michael Sonneshein reported growing interest in Ethereum-related investment products.

Ethereum 2.0 received strong support from the crypto community as staking participants are hopeful for an improved version of the network in the form of ETH 2.0. The current transaction fee of ETH is a big issue for the users, the network upgrade aims to address the issue of large transaction fees and the number of transactions per second.

What do Vladimir Putin and Burger King have in common? 

For starters, they both have a cryptocurrency named after them. Actually, PutinCoin and Whoppercoin might be the only thing they have in common. But their namesake cryptocurrencies are among the thousands of different virtual currencies making up a growing marketplace grabbing investors’ attention.

Cryptocurrencies like Bitcoin and Ethereum have a growing track record of holding and increasing in value over time, though recent dips have wracked the market, while lesser-known cryptos are considered much more speculative and unpredictable. And while PutinCoin and Whoppercoin belong to a category of cryptocurrencies marked more for their absurdity than their potential as either an investment or cryptocurrency, they show just how unique different types of cryptocurrencies can be.

Here’s Where to Start:The Most Popular CryptocurrenciesDecentralized FinanceDigital GoldDigital Cash or Internet MoneySoftware Platforms Stablecoin or Digital FiatMemecoins, and Other Strange Cryptocurrencies

In general, cryptocurrencies can be grouped by utility: What is the purpose of the cryptocurrency? What is its value proposition? What is it for?

“They all have different utilities, they all have different founders who have different visions for where that cryptocurrency is going,” says Mike Uehlein, founder and financial planner of WealthU advisors. Uehlein regularly talks to clients about investing in cryptocurrency. 

The Most Popular Cryptocurrencies

There are thousands of cryptocurrencies, most with very little value and unclear potential. Many advisors recommend investors stick to Bitcoin and Ethereum — if any — and pass on the smaller cryptos. 

Leading cryptocurrency news outlet CoinDesk maintains a Coindesk 20 list of the most popular cryptocurrencies currently being bought and sold. This list includes cryptocurrency assets and networks by their most common names. Some, like Bitcoin (BTC), have one name for both the blockchain network and the cryptocurrency. Others, like Ethereum, are named for the broader blockchain network, but have a different name for their associated native cryptocurrency (Ether, or ETC, in the case of Ethereum).

Updated quarterly, the list ranks cryptocurrencies based on dollar volume and other data from third-party cryptocurrency exchanges, where people can buy and sell different cryptocurrencies.

BitcoinEthereumXRPCardanoStellarUSD CoinChainlinkUniswapPolkadotBitcoin Cash

Note: This list was last updated – using the Coindesk 20 – on July 1, 2021.

1. Bitcoin

As the first cryptocurrency, Bitcoin (BTC) is also the most popular and highly valued, despite high volatility over the course of its history. Bitcoin was initially created to be used as a digital payment system, but experts say it is still too volatile to be used for that.2. Ethereum

Ether (ETH) is the cryptocurrency of the Ethereum network, an open-source blockchain upon which developers can build apps and other cryptocurrencies. It’s also the second largest cryptocurrency by market cap, behind Bitcoin. Ether’s value has risen sharply since its creation in 2013, to nearly $3,000 for one token as of late May, but still lags well behind Bitcoin’s value of nearly $40,000 per coin. 

3. XRP

XRP is the cryptocurrency of the Ripple digital payment network. Built for digital payments, XRP touts itself as a faster and more efficient way to power global payments. Ripple and XRP also allow for third-party development on other uses for XRP.

4. Cardano

Cardano (ADA) uses a technology called Ouroboros, a peer-reviewed blockchain protocol. It describes itself as a more secure and scalable way to maintain decentralization.

5. Stellar

Stellar’s native cryptocurrency is the Lumen (XLM). Stellar is designed as an “open network for storing and moving money” that allows people to create, send, and trade digital money. It’s designed to sell and trade all digital monies, not just Stellar’s own associated cryptocurrency, the Lumen — although you’ll need to own some Lumen to make transactions.

6. USD Coin

USD Coin (USDC) describes itself as “the world’s digital dollar.” Created by a global financial firm called Circle, USDC is the result of work that has been invested in by Goldman Sachs, Baidu, and IDG Capital, among others. USD Coin is tied to the U.S. Dollar, which makes its price much more stable than other cryptocurrencies. That stability lends itself more toward digital payments, while other cryptocurrencies have more potential to increase in value as investments (along with more risk of losing value, of course).

7. Chainlink

Chainlink (LINK) uses “real-world data and off-chain computation while maintaining security and reliability,” according to its website.

8. Uniswap

Uniswap (UNI) is a decentralized crypto exchange that operates on Ethereum’s blockchain. Its developers promise to get rid of unnecessary intermediaries, which it says gives users more control.

9. Polkadot

Polkadot (DOT) says its mission includes allowing different blockchains to exchange information and transactions with one another. Its website plays up data and identity security and users being in control.

10. Bitcoin Cash

Bitcoin Cash is a peer-to-peer electronic cash system, which was the original intention of Bitcoin. The currency allows you to send money anywhere for very low fees.

While each of these top cryptocurrencies is unique in its own way, they all tie into an underlying principle called  decentralized finance (DeFi).

Decentralized Finance 

In its simplest terms, decentralized finance refers to financial activities conducted without the involvement of a traditional bank. 

Think about all of the activities in which you’d normally use a bank or some other financial institution — getting a loan, insurance, investing, even using a credit card. “All of these [activities] are traditional-finance based and have intermediary companies,” says Ollie Leech, learn editor at CoinDesk. “Now people are creating these products in a completely autonomous way with [cryptocurrencies].”

It can seem counterintuitive — where else would you go for a loan, if not an established lender? But that’s one of the appeals to DeFi, says Leech. 

In the same way people have increasingly brought “smart” technology into their homes, proponents say cryptocurrency has potential to automate and digitize more and more aspects of the financial system. The appeal of this happening outside the conventional — or centralized — finance system depends on who you ask. 

Many Americans may not understand the appeal of a finance system that operates beyond government control. But things can be very different in countries with less financial stability, says Roger Aliaga-Díaz, principal and senior economist with Vanguard Investment Strategy Group. If cryptocurrencies offer as much or more stability as a given national currency, it’s an entirely different equation than if your national currency is the safe and stable U.S. dollar.

Just like there are different types of accounts and tools in conventional finance — from savings accounts to investment accounts to credit cards — that are used for different purposes, different cryptocurrencies can have similarly unique uses in this emerging decentralized finance system.

Instead of going to a bank to draw out a loan, you might “go to a decentralized application that’s not owned or operated by anyone in particular,” says Leech. 

Where conventional loans involve humans at a bank who take part in processing, reviewing, and approving loans, a DeFi loan — with funding in the form of cryptocurrency — could run via app on a network like Ethereum with an algorithm processing it. The borrower would put up some cryptocurrency as collateral, which they’d get back minus interest when they repay the loan.

“The code runs autonomously using smart contracts,” Leech says. “So once the developers release the data they’re pretty much hands-off, and everything runs automatically so there’s no intermediary.” 

Ethereum’s website offers a comparison chart contrasting decentralized from traditional finance. Along with these technical differences, a big consideration to keep in mind is that the conventional financial system is regulated to serve the interests of everyday customers, while cryptocurrency and decentralized financial systems are largely unregulated, and subject to governance and oversight only by their creators/users.

Unlike the money kept in a bank account, money you have in crypto may not be FDIC insured. Some exchanges offer this insurance while others don’t — something you’ll want to look into before buying crypto from one or another. For exchanges that don’t offer this insurance, there’s no guarantee you will be repaid if there is a hack or the exchange goes out of business.

You hold your moneyMoney held by financial institutions Transfers happen in minutesPayments can take days to processTransactions are pseudonymous Financial activity is coupled to your identity (social security number, name, address, etc.)Market is always openMarket closes Built on transparency – anyone can inspect the systemFinancial institutions are closed books.comparison-table tr td:nth-child(){border-left: 10px solid #5bffb1;border-right: 10px solid #5bffb1;}.comparison-table tr:first-child td:nth-child(){border-top: 10px solid #5bffb1}.comparison-table tr:last-child td:nth-child(){border-bottom: 10px solid #5bffb1}

With that in mind, here are some of the broad categories of cryptocurrencies that tend to organize the market.

Digital Gold

Digital gold refers to cryptocurrency comparable to real gold in its ability to store and increase in value. There’s a limited amount of gold on earth, in the same way that digital gold cryptocurrencies have a limited supply. 

“People buy gold not because they expect to be able to go to the store and spend it, but because they expect it to hold its value and maybe, probably, increase in value over time,” says Galen Moore, director of data and indexes at CoinDesk. 

The primary example of a digital gold cryptocurrency is Bitcoin, though that was not its original intention. Bitcoin was originally put forth as an electronic peer-to-peer cash system, but its volatility, among other things, limited its potential for that purpose. 

In use, such digital gold cryptocurrencies are bought and held, “for the same reason people would have diamonds, or some $100 bills, or some gold coins in a safe,” says Moore. Litecoin is another example — it’s been described as silver to Bitcoin’s gold.

Digital Cash or Internet Money

Internet money is exactly what it sounds like — you use it to buy things over the internet. 

Bitcoin was originally intended to be digital cash, but speculation led to the creation of another cryptocurrency, Bitcoin Cash (a variation of Bitcoin). Bitcoin’s price was too volatile for it to be a suitable currency, which proponents for Bitcoin Cash argued was the entire point of the currency to begin with. 

“There was a big debate about what the future of Bitcoin was going to be. Was it gold or was it cash? The people who wanted it to be more like gold won out,” says Moore. The decision was a “turning point for Bitcoin where it really went down to be digital gold.” 

But the group that wanted Bitcoin to remain internet money split off — or forked, in crypto parlance — the currency and created Bitcoin Cash. The network is devoted to digital payments (with faster processing and lower fees). In these ways, Bitcoin Cash is “meant to be cash. That’s the value proposition,” says Moore.

Though Bitcoin Cash is designed and intended for transactions, its price is still volatile and probably not your best option for making or receiving payments. 

Software Platforms  

Ethereum represents another type of cryptocurrency: It operates as a cryptocurrency network and along with its native cryptocurrency, Ether, offers a programmable crypto environment for developers. Similar to how smartphones allow third-party apps to be downloaded and used, Ethereum allows developers to create “dapps” — Ethereum-based apps that tap into the network. 

Investors can buy Ether just like they can buy Bitcoin, hoping it increases in value. Ethereum’s programmable network allows for other, more customizable uses. One example is the creation of NFTs — nonfungible tokens — that caught the attention of people far beyond the cryptocurrency community this year. NFTs are Ethereum-based digital assets, which hold value based on demand and supply on the Ethereum network.  

Stablecoin or Digital Fiat

A stablecoin pegs its value to some other currency or commodity. A digital fiat represents a fiat, or government-backed, currency on the blockchain, says Moore. One of the most popular examples of a digital fiat is Tether, a cryptocurrency whose value is pegged to the U.S. dollar. 

Tether is a system that enables you to have a cash-like currency that is always worth $1 — but only on cryptocurrency exchanges. A digital fiat like Tether comes in handy when you want to quickly move your assets within a cryptocurrency exchange. For example, if you think the market for smaller, more unpredictable coins is going to crash, you might put your money in a stablecoin like Tether, and then buy back at a lower price after the crash, says Moore. 

Stablecoins enable the exchange to flow better, says Moore. Taking the previous example, you could theoretically cash out your smaller coins for actual dollars, and then reinvest those dollars after the crash, but it could take days to convert your coins into dollars and back again, says Moore. 

Memecoins, and Other Strange Cryptocurrencies

There are thousands of cryptocurrencies available. Many of them have little to no value, and no discernable value proposition, which lands them in the category of memecoins. Experts recommend avoiding investing in this category of coins and sticking with more well-known options like Bitcoin or Ethereum, if you decide to invest in crypto at all. 

Whoppercoin and PutinCoin fall into this category of cryptocurrencies, as does another famous memecoin of recent fame: Dogecoin. While Dogecoin has seen a rise in demand — and thus value — in recent weeks, it still is highly volatile, as evidenced by its drop in value when Tesla CEO Elon Musk made it the subject of a joke on a recent episode of “Saturday Night Live.”

Any cryptocurrency that’s not Bitcoin is referred to as an “altcoin.”

Bitcoin, Litecoin

Bitcoin Cash, XRP

Ethereum, Cardano, Polkadot

Tether, USD Coin

Dogecoin, PutinCoin, Whoppercoin

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LONDON , July 2, 2021 /PRNewswire/ -- UK-based cryptocurrency exchange coinpass has launched its new flagship crypto trading platform.

The new platform, coinpass Trade, lets users trade crypto with a cryptocurrency exchange listed on the FCA temporary crypto-asset business register.

Users will benefit from top-tier security, deep liquidity, a large choice of tradable tokens and excellent service and support.

Voted Best Cryptocurrency Exchange Platform 2020 at CityAM's CryptoAM Awards, coinpass is preparing for exponential growth to service its growing UK and European user base.

Investors can sign up and register as an individual user or a corporate entity in minutes.

Jeff Hancock , co-founder and CEO, said: "Our goal was to design a crypto trading experience for our users that was easy to use, beautiful to interact with and provided access to the most important data when investing in crypto.

"Typically, exchanges leave you looking at charts and order books instead of the important data to monitor and grow your crypto portfolio. Our new innovative trading platform will enable our users to actively monitor their trading positions, crypto market trends and overall portfolio performance, which are essential to investors to continue to grow their portfolio."

At launch, coinpass Trade will support the following trading pairs and markets:

British Pound (GBP), European Euro (EUR), Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), Polkadot (DOT), Chainlink (LINK) and Stellar (XLM).

Post-launch, the following markets are scheduled to be added:

Crypto-crypto markets for BTC and ETH

Additional alt-tokens vs fiat currencies markets

Additional alt-tokens vs cryptocurrencies markets

The platform is aiming to offer over 100 tradable crypto markets to its client base.

Launched in 2018, coinpass has become a leader in the UK cryptocurrency space since the launch of its GBP-crypto fiat on-ramp gateway.

The new platform opens publicly on July 1st 2021.

Logo: dia contact Marketing Team marketing@coinpass.com +44 (0)203-475-9316