Cryptocurrency All-in-One For Dummies. Peter Kent

selecting cryptocurrencies by category. After you’ve flipped through the categories and selected the finalists that best fit your risk tolerance (see Book 5, Chapter 2), you can then move on to advanced investing techniques throughout the later chapters of Book 5.

      Based on their popularity and total market cap as of 2021, here are some of the most popular cryptocurrency categories and the leading cryptos in each space. The following sections describe just a few examples of many categories in the exciting cryptocurrency world; you may recognize some of the currencies from their coverage earlier in this chapter. Other people may categorize these cryptos differently. Some popular cryptocurrency categories include the following:

       Gaming/gambling

       Supply chain

       Transportation

       Medical

       Internet of Things (IoT)

      

Keep in mind that some categories are hotter as of this writing, but others may have become more popular by the time you get this book in your hands. Also know that some cryptos are hybrids of multiple categories and are hard to fit in only one box. You can find different crypto categories on websites such as www.upfolio.com/collections#Go and www.investitin.com/altcoin-list/.

      Payment cryptos

      Payment cryptos are by far the biggest category in terms of total market cap. In this group, you find cryptocurrencies that mainly aim to be used as a store of value, transaction, and payments, just like fiat currencies such as the U.S. dollar. Examples of cryptocurrencies that fall into this category include the following:

       Bitcoin (BTC)

       Litecoin (LTC)

       Bitcoin Cash (BCH)

       OMG Network (OMG)

       Dash (DASH)

       Ripple (XRP)

       Tether (USDT)

With Bitcoin as the pioneer, it is no wonder that this category started out being so popular. Blockchain technology can be applied to so much more than just payment systems. Check out Book 2, Chapter 1 for more current blockchain uses and potential future applications.

      Privacy cryptos

      Privacy cryptos are heavily focused toward transaction security and anonymity, a lot more than those in the payment category are. In fact, the idea that Bitcoin and other cryptocurrencies in the payment category are fully anonymous and untraceable is a common misconception. Many blockchains only disguise users’ identities while leaving behind a public record of all transactions that have occurred on the blockchain. The data in the ledger often includes how many tokens a user has received or sent in historical transactions, as well as the balance of any cryptocurrency in the user’s wallet.

      Privacy cryptos can be a bit controversial because authorities see them as an illicit tool that makes it possible for criminals to engage in illegal activities, such as money laundering. Nonetheless, some of them have gained popularity. Here are some examples:

       Monero (XMR): Monero is the most famous privacy crypto as of 2018.

       Zcash (ZEC): Zcash is similar to Monero but has a different protocol (set of rules). Check it out at https://z.cash/.

       CloakCoin (CLOAK): A lesser-known privacy crypto, CloakCoin has a number of added layers of security. See www.cloakcoin.com/en.

       Dash (DASH): Also mentioned in the payment category, Dash is a bit of a hybrid. In addition to Bitcoin’s core features, Dash also includes the option for instant and private transactions.

      Platform cryptos

      Platform cryptos are also referred to as decentralized application protocol cryptos, smart contract cryptos, or a hybrid of all three. In this category, you can find cryptocurrencies that are built on a centralized blockchain platform; developers use them to build decentralized applications. In other words, such cryptocurrencies act as platforms where people build upon blockchain applications (and thus other cryptocurrencies).

In fact, some analysts suggest that you may want to forget about payment cryptocurrencies and invest in crypto platforms instead. They’re generally considered good long-term investments because they rise in value as more applications are created on their blockchain. As blockchain technology becomes more mainstream, the number of applications and their usage will increase, along with the price of such coins. The most famous example in this category is Ethereum (ETH). Others include the following:

       NEO (NEO): A smart contracts ecosystem similar to Ethereum, NEO wants to be a platform for a new smart economy. NEO is China’s largest cryptocurrency.

       Lisk (LSK): Lisk is a smart contracts platform similar to Ethereum but based on JavaScript. See https://lisk.io/.

       EOS (EOS): Another smart contracts platform similar to Ethereum, EOS has performance and scalability benefits.

       Icon (ICX): Icon wants to “Hyperconnect the World” by building one of the largest decentralized global networks. See https://m.icon.foundation/?lang=en.

       Qtum (QTUM): Qtum is a Singapore-based Ethereum and Bitcoin hybrid. See https://qtum.org/.

       VeChain (VEN): VeChain is a blockchain-based platform that gives retailers and consumers the ability to determine the quality and authenticity of products they buy.

       Ark (ARK): Ark wants to provide an all-in-one blockchain solution for developers and start-ups. See https://ark.io/.

       Substratum (SUB): Substratum wants to create a new generation of Internet. See https://substratum.net/.

      These are just a few of the hundreds of cryptocurrencies that are emerging in this category.

      Exchange-specific cryptos

Exchange-specific cryptos are mainly introduced and used by the cryptocurrency exchanges. You can think of these cryptos as incentives that bring people to the exchanges’ platforms. For tips on selecting the best exchange-specific cryptocurrency and choosing the best cryptocurrency exchange, see Book 5, Chapter 3. Here are a few examples of these currencies.

       Binance Coin (BNB): Issued by Binance exchange, Binance Coin runs on the Ethereum platform and has a strict maximum limit of 200 million BNB tokens. See www.binance.com/.

       KuCoin Shares (KCS): KuCoin Shares is just like Binance Coin but for the KuCoin