A Cryptocurrency Guide— Types of Currencies, Blockchain Economies, & More

Posted December 20, 2021 by in Lifestyle

Cryptocurrencies are a relatively new phenomenon and the cryptocurrency market is still in development. Blockchain, cryptocurrency, and crypto trade all have great potential to change the world as we know it. This guide will give you an overview of what cryptocurrency is and how each coin type works with examples like Bitcoin cash, Ethereum classic, etc.

What are Blockchain Economies?

Think of blockchain economies as an operating system for digital assets. They offer all the basic features you would find on any other OS: storage, security, and more. Blockchain economies allow you to create your own digital assets (usually referred to as tokens), decentralized applications, and more on their platform.

As such, these powerful tools have become known among many people in recent times due to their potential use cases including financial transactions without middlemen involved – something that could greatly reduce costs when compared against current systems.

Some examples of popular blockchains include:

  • Ethereum (ETH) which supports smart contracts
  • ERC20 token standards for managing virtual goods & crypto-collectibles like CryptoKitties or Cryptolions
  • Non-Fungible Token Protocol NFTs bring gamers closer together by creating unique art in-game items

Payment Currencies

You can use cryptocurrencies like Bitcoin (BTC), Litecoin (LTC), or even a digital currency, such as Namecoins to pay for goods and services.

For example, you could use a payment currency such as Bitcoin (BTC) to pay with your mobile phone bill or cash out from digital currencies into local fiat currencies like dollars. While every cryptocurrency can theoretically be used in this way; goods and service-providing merchants are adopting and accepting payment currencies largely.

Many brick & mortar retailers will only accept certain types of coins – typically those that have gained popularity among buyers.

Privacy Coins

Privacy coins are a type of digital asset created with the intent to provide safety and security through anonymity.

These cryptocurrencies have transaction amounts that cannot be traced, as well as wallet balances only known by their owner; these contrasts starkly with blockchain ledgers where every transaction is visible for all users on the network (e.g., Bitcoin).

The privacy coins provide an excellent way to conduct transactions without revealing your real wallet balance or address.

They do this by using techniques such as hiding the user’s true extent of holdings, mixing multiple transactions together so that they cannot be traced back individually in order for a transaction to occur smoothly on a blockchain with these cryptocurrencies.

Examples of privacy coins would include Zcash (ZEC), Monero (XMR) PIVX, etc.

Utility Tokens

Utility tokens are digital assets that can be used to purchase goods and services from a blockchain-based platform.

They operate on the Ethereum network, but other blockchains such as Tron’s Truetrak token system could also potentially house these types of currencies in their own networks with different uses or specifications for each individual project depending upon what they wish it would do – this means there will likely always exist more than one kind!

A utility token is a type of cryptocurrency that has been created to provide access and value in different forms. This means they can serve as both currency or asset with the added benefit of being usable at any point while also providing something else like discounted services for future use – all thanks to smart contracts!

A popular example of utility tokens is Golem (GNT).

Stablecoins

Stablecoins are a type of cryptocurrency that aims to maintain the same price, regardless of market movements. They work in different ways but all have one thing in common: they’re designed not just as an alternative currency like Bitcoin or Ethereum – which would see their values rise and fall wildly depending on supply and demand- but also with US Dollars (or another base asset).

Stable coins usually follow strict protocols established by developers who want them maintained at fixed rates; if anyone tries trading these currencies off each others’ prices then things can get really messy really quickly!

Key Takeaway

Crypto Currencies are a type of cryptocurrency that can be used as payment for goods and services, or even traded to other cryptocurrencies.

Every cryptocurrency has its own uses on the blockchain system in which it operates. The most popular cryptocurrency types include:

  • Bitcoin  (BTC), Ethereum Classic, Litecoin (LTC), etc.

And there are also privacy coins like:

  • Monero (XMR) and PIVX

Utility tokens such as:

  • Golem (GNT)

Stablecoins such as:

  • TetherUSD and many more!