Cryptocurrency has existed for a while now. It’s been more than 13 years since Bitcoin first appeared. Even though many people have learned everything there is to know about it; digital cash and payment options based on it are not as widespread as you may think.
Different industries and markets adapt to virtual money at their own pace. Domain and web hosting sector, valuing purchase anonymity, has become one of the leaders in providing crypto transaction options.
Before converting dollars into virtual cash and understanding how to make better financial decisions, especially regarding web hosting, we need to dive deeper into the cryptocurrency specifics.
Cryptocurrency comes in many shapes and forms. You might’ve heard of popular crypto coins like Bitcoin (BTC), Ethereum (ETH), Tether (USDT), and many others.
All variations of cryptocurrency use encryption technologies that allow to make a secure transaction to digital money. As well as all of them have a core function, which is to work as currency in a peer-to-peer electronic cash system.
There are actually a multitude of cryptocurrencies out there, most of which resemble the functional principles of Bitcoin.
Here’s what various types of virtual cash have in common:
- Cryptocurrency is independent of any bank, which makes them decentralized.
- Bitcoin and other currencies utilize distributed ledger technology (DLT) – blockchain.
- All types of e-cash are secured using cryptography.
- To manage cryptocurrency, you need a digital wallet (usually a blockchain wallet).
But is all cryptocurrency the same? It’s not.
Different types of coins and tokens have other purposes. Bitcoin, for example, was created with the deliberate intention of value exchange. But many kinds of crypto aren’t used for financial exchange.
The purpose of blockchain technology alone surpasses the “backbone” function of blockchain for crypto, even though it was popularized through cryptocurrency. In contrast with the conventional financial management system, which poses as a centralized entity, blockchain exists within multiple computers that form a network, making many types of crypto follow a decentralized approach. This aspect allows the implementation of blockchain technology in numerous ways, for instance, securing healthcare records.
Distinguishing Altcoins from Cryptocurrencies
Let’s start with the basics.
So, what is altcoin?
The term “altcoin” basically refers to cryptocurrency alternatives to Bitcoin. Since Bitcoin was the first cryptocurrency ever created, all further ones can fit into the definition of altcoins. The first ones appeared in 2011 and have grown significantly in their variety. Altcoins were made to better the aspects of Bitcoin that needed improvement, in the opinion of their developers.
One of the purposes of creating altcoins was to increase the payment speed. With Bitcoin, financial transactions can take up to a couple of hours.
As with most crypto, altcoins can be used for payment. However, some altcoins have “niche” parameters related to distribution or mining technologies. For example, starting from developing blockchain-based cloud storage to substituting likes on social media.
There are many other altcoins, such as stablecoins, mining and staking-based coins, various kinds of tokens, etc.
Coins Mined through Mining
Let’s figure out what mining technology is all about.
Mining implies the procedure of verifying and approving payments processed through the blockchain network. Crypto mining involves “adding blocks” to the existing ones. The end result of mining is receiving cryptocurrency.
Mining was the primary method of making crypto decentralized.
There are different ways to mine cryptocurrency, including cloud mining (renting the mining machine), CPU and GPU mining, ASIC mining, etc.
Different cryptocurrencies are mined through different methods. Thus,
- Bitcoin is mined through ASIC mining.
- Litecoin is mined through the Srypt algorithm.
- Ethereum is mined through CPU\GPU, and ASIC mining.
- Ravencoin is mined through CPU\GPU.
- Monero is mined through the CPU.
Ultimately, cryptocurrency mining is about investment, and getting a return on it in the form of a passive income.
What are Stablecoins?
Stablecoins, as the name suggests, keep their value independent from different factors. There’s usually a source of stability like that. For example, fiat-backed stablecoins are traditionally tied to the US dollar.
Bitcoin and other cryptocurrencies provide the same decentralized financial independence and flexibility in issuing payments, but at the same time, they are also flexible in terms of value. The cost of different cryptocurrencies can fluctuate significantly, which makes it harder to rely on when it comes to making financial decisions.
It’d be easier to understand the nature of stablecoins through an example; for this purpose, let’s take one of the most popular stablecoins – Tether (USDT).
We’ve established that stablecoins are tied to a specific asset; in the case of USDT, it’s the US dollar with a 1:1 equivalent. However, Tether doesn’t rely on the US dollar; it also comes in variations like Tether Gold (tied to the price of gold), Tether Euro (linked to the euro), and so on.
Tether is famous for maintaining stable value and being one of the safest solutions in the crypto industry for keeping assets in crypto. Tether (USDT) is often used for issuing transactions by blockchain developers.
What are Security Tokens?
Security tokens are digital analogs of ownership certificates that give owners the right to cash out their investment interests (shares, dividends, etc.). These rights are recorded in a smart contract, and the tokens are traded on exchanges.
The turnover of security tokens occurs under the legal regulations of financial regulators in various countries.
Unlike utility tokens, security tokens are tied to actual papers, i.e., they are considered a financial investment, and the companies issuing them are subjects to additional regulatory requirements.
One of the main advantages of security tokens over traditional financial contracts is the lack of need for intermediaries like banks and other organizations.
Applications of Cryptocurrencies
Currently, cryptocurrencies offer a variety of applications in different areas of life, such as:
- Financial transactions like investments, trading, loans secured by crypto, etc.
- Bypassing government restrictions, including storing and transferring money without risks of account blocking.
- Personal payments like purchase of goods and services, donations, salaries, payments abroad, etc.
- Managing smart contracts secured by cryptocurrency.
- Secure storage of money, considering that crypto wallets cannot be ceased by a third party or blocked.
Digital money can gradually become a valuable tool for the financial side of life. Cryptocurrency is not to be feared; it is to be explored.
Exploring the Regulatory Landscape of Cryptocurrencies
Because many types of crypto are decentralized or independent of any authority, you might have an idea that digital money is not recognized on a legal level.
This is not entirely true.
Regulations for cryptocurrency exist on many levels, from legally respecting blockchain users to full-blown cryptocurrency bans in some countries.
However, the regulatory landscape is ever-evolving. The popularity of cryptocurrency forces governments all over the globe to come up with specific policies when it comes to crypto use.
For instance, countries like Canada or the UK regulate the agencies that provide crypto operating services; both countries also tax decentralized and non-decentralized cryptocurrencies. Switzerland has provided tokenization for rights and other official documents.
When it comes to the US, cryptocurrency transactions are legal and are governed by the BSA. Cryptocurrency service providers must keep needed records, submit reports, and follow a specific program.
10 Promising Cryptocurrencies to Monitor in 2023
Without unnecessary pre-word, here are 10 promising cryptocurrencies worth looking into in 2023 listed by the performance criteria, prospect for long-term investment, and innovation.
- Bitcoin BSC – Recently launched an affordable and environmentally conscious version of Bitcoin.
- Ethereum – The most stable cryptocurrency for smart contracts.
- WMS (Wall Street Memes) – A new crypto project that raised more than $20 million on a presale.
- yPredict (YPRED) – A prediction model for passive income that raised more than $3 million.
- Lauchedpad XYZ – A new crypto platform featuring NFTs that raised $1.5 million since its release in April 2023.
- Chimpzee (CHIMPZ) – A new eco-friendly cryptocurrency aimed to protect wildlife that raised $1.3 million.
- Sonik Coin – A new Ethereum-based meme token that raised $1.25 million.
- Scorpion Casino – An online gambling platform that raised almost $1 million.
- Solana – A spedier Ethereum alternative.
- BTC20 – A new Ethereum-based token for just $1.
Monitoring the performance of these coins on the market will help you determine whether they are worth investing your resources in.