In December 2021, over 6,000 cryptocurrencies are in use. However, there are still large groups of people who support these cryptocurrencies and invest in them.

There are two basic types of cryptocurrencies available today: tokens and coins. Coins are used primarily as currency, whereas tokens can be programmed to perform a variety of functions. Any cryptocurrency that isn’t bitcoin is considered a “altcoin,” or non-blockchain digital currency.

What it means to call an alternative to Bitcoin is to say “altcoin” in slang. Some of the characteristics of most altcoins are similar to those of Bitcoin. To generate and validate transaction blocks, some cryptocurrencies use a new method. Others, however, may use an old method with new features.

TYPES OF CRYPTOCURRENCIES

With the help of this article, we’ll be able to decode the various types of cryptocurrencies.

Payment currency

• The currency used to pay for goods and services.
• When paying for goods and services, you can use payment currency.
• The value of a project or protocol is determined by how much trust the general public has in it.

 Example of Payment Currency

BITCOIN CASH

BitCoin Cash (BCH) was born from a split from the original currency in August 2017. To accommodate more transactions, the block size of BCH was increased from 1MB to 8MB. A fork is simply a change in the protocol of a blockchain network. The primary goal was to deal with Bitcoin’s scalability problem.

LITECOIN

A P2P internet cryptocurrency based on mathematical principles, Litecoin is open-source and decentralized. At 56 transactions per second, it is faster than bitcoin, but far slower than ripple or Visa. The SHA-256 algorithm is used by Litecoin, whereas the Scrypt algorithm is used by Bitcoin, which is significantly more recent.