The popularity of cryptocurrencies has increased drastically over the past few years and this does not come as a surprise. There has been an increasing awareness as regards what these digital currencies are all about; and with increasing acceptance, the trend is guaranteed to continue.

Cryptocurrency is a virtual or digital currency, and you can exchange it for goods and services, just like any other currency you know such as the dollar and British pounds. However, unlike fiat currencies, there is no central authority for crypto. Instead of a bank, cryptocurrencies are a completely decentralized system of payment that runs on blockchain technology.

Today, there are thousands of cryptocurrencies with many others emerging. The technology behind each coin forms the basis for its classification. Today, there are four major types based on the technology behind its operations as follows:

  • Proof of Work (PoW)
  • Proof of Stake (PoS)
  • Tokens
  • Stablecoins

Certainly, we won’t be going into the details in this article. However, certain select few coins have made it the most popular coins currently traded and accepted. Many businesses have adapted to integrate this new payment option, such as online stores, casinos and crypto bookmakers, grocery stores and even car makers.

Types of cryptocurrencies

Here is a look at some of the most popular types of cryptocurrencies as well as the benefits they offer particularly against the conventional fiat currency.

Bitcoin (BTC)

Without any doubt, Bitcoin is the biggest, most popular and oldest of all the cryptocurrencies in the world. It doesn’t come as a surprise that it gets all the headlines whenever cryptocurrency is being discussed. Debuted in 2009, BTC is a decentralized currency that uses blockchain technology and peer-to-peer network for transactions.  It’s the most valuable cryptocurrency, with exchange rates reaching tens of thousands of dollars.

Ethereum (ETH)

Another popular alternative to BTC is Ethereum, which is currently ranking as the second-biggest cryptocurrency. It facilitates smart contracts using blockchain technology with a decentralized system that allows these contracts to be built and run. It’s also very valuable, with its exchange rate skyrocketing into thousands.

Binance Coin (BNB)

Binance is one of the most used crypto exchange platforms in the world, and their BNB currency is also very popular. Created to serve as a token for discounted trades, BNB can now be used for making payments across different platforms. Other popular coins include Cardano (ADA), Solana (SOL), Ripple (XRP) and many others.

Benefits of cryptocurrencies

Just like fiat currencies, crypto can be used for financial transactions. However, as a digital currency, what advantages do they offer?

The first benefit is its low transaction cost. Depending on your location, you can easily withdraw from your digital wallet to your bank account at any time. No paperwork is required! Also, for international transactions, it is way faster than the usual bank transfer. 

In addition, crypto transactions are secure and anonymous. They are used by whistleblowers and journalists in dangerous parts of the world where the traceability of fiat payments could pose a risk to their freedom of speech and source protection. 

Bottom Line

The crypto world is not for the uninitiated. Of course, the increasing popularity comes from the fact that a lot of people now understand the crypto market and how it works. However, while crypto payments offer many benefits, users are hesitant to use it for daily payments because the rising exchange rate makes it more viable as an investment tool than a regular currency..