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Did you know that there are different types of cryptocurrencies?

Bitcoin and Ethereum are the most well-known cryptos, but there are actually thousands of cryptocurrencies. In this post, we’ll go over some of the key cryptos you should know about - from less volatile "stable coins" to tokens and altcoins like Zcash, Litecoin, Chainlink, and BAT.


Bitcoin: “Digital Gold” 

Bitcoin is a virtual asset secured by cryptography, originally described in a 2008 whitepaper by a person, or group of people, using the alias Satoshi Nakamoto. The true identity behind the alias remains unknown. 


Recently, some investors have been using Bitcoin as a hedge against currency depreciation and political instability because it is attractive as a potential store of value: 


  1. All units of Bitcoin have been and will be created according to a mathematically metered and predictable schedule. This makes it strictly scarce.


  1. Bitcoin is not issued by any central authority, which makes it somewhat protected from government manipulation or intervention. A sensible allocation to cryptocurrencies could serve as protection against asset seizure or rising inflation, for example.


  1. Unlike gold, Bitcoin can be transferred electronically and isn't subject to the same rehypothecation as gold, since Bitcoin supply is publicly auditable.

Moreover, despite Bitcoin’s volatility, it has been increasing in value year-over-year for over 5 years. As explained by Ark Invest: 

"Over long time horizons, bitcoin’s purchasing power has increased significantly. Since 2011, for example, the price of bitcoin has compounded at an annual rate of roughly 200% and, despite significant intra-year moves, it has appreciated on a year-over-year basis every year since 2014 as measured by its lowest value of the year".



Ethereum and Smart Contracts 

Ethereum is a decentralized and open-source Blockchain system with its own cryptocurrency, ETH. The Ethereum project expanded upon the idea of Bitcoin’s blockchain technology to provide an infrastructure for a multitude of cryptos and smart contracts. In short, Ethereum is more than a cryptocurrency - it is a platform for decentralized applications. 


CoinMarketCap explains the concept of smart contracts as follows: 


“Smart contracts are computer programs that automatically execute the actions necessary to fulfill an agreement between several parties on the internet. They were designed to reduce the need for trusted intermediates between contractors, thus reducing transaction costs while also increasing transaction reliability”.



Stablecoins  

Stablecoins are “stable-value cryptocurrencies”, which often mirror the value of a fiat currency or basket of fiat currencies. The value of stablecoins is that they provide advantages of other cryptos, such as global access and almost instant digital transfers, with less volatility. 


Tether (USDT) - Tether is a crypto that has its value based on the US dollar. 1 Tether is supposed to equal US$1.00 and it usually does in the market but it can vary. According to Tether, whenever it issues new USDT tokens, it allocates the same amount of USD to its reserves, thus ensuring that USDT is fully backed by cash and cash equivalents. Find out more about Tether


DAI Stablecoin - DAI is similar to Tether in that it’s target value is equal to US$1.00. However, DAI coins are generated in a different way - anyone can create DAI by backing them with collateral. Find out more about DAI.


PAX Gold - PAX Gold (PAXG) is a digital asset backed by physical gold bars that are kept in Brink’s vaults and held in custody by Paxos Trust Company. Anyone who owns PAXG owns the underlying physical gold. Find out more about PAX Gold


Altcoins  

Altcoins refer to a wide range of cryptocurrency alternatives to Bitcoin, the original cryptocurrency. There are altcoins of all kinds, created to solve different user needs. There are altcoins focused on transaction speed, privacy, supply chains, and much more. Below are a few examples:


Litecoin - Litecoin was created by Charlie Lee, a former Google Employee, in 2011. Litecoin is based on Bitcoin’s code, but provides considerably faster transactions as a “light version of Bitcoin”. Find out more about Litecoin


Basic Attention Token - The Basic Attention Token (BAT) is a cryptocurrency that runs on the Ethereum network and that you can earn whenever you view ads in the Brave Browser. You can also support publishers and content creators by donating BAT on Brave. The idea behind the Basic Attention Token is to better price our attention online and give back value to users. Find out more about BAT.


Orchid Token - Orchid is a cryptocurrency-powered virtual private network (VPN) with its own token, OXT. Its aim is to overcome internet freedom limitations by using cryptocurrency payments to allow anyone to purchase bandwidth from any participating provider in the network. Find out more about Orchid


ZCash - Zcash (ZEC) is a decentralized and open-source privacy-focused cryptocurrency that enables selective transparency of transactions. As explained on the Zcash site: “Like Bitcoin, Zcash transaction data is posted to a public blockchain; but unlike Bitcoin, Zcash ensures your personal and transaction data remain completely confidential”. Find out more about Zcash.




Trade crypto through Passfolio Financial

‍With Passfolio, you can trade the following 9 cryptos at the moment: Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Zcash, Orchid Token (OXT), Basic Attention Token (BAT), Chainlink (LINK), and the Dai Stablecoin (DAI). Many more cryptos are being added as well!

 

Download Passfolio on the App Store or on Google Play and get started today! Find out more at www.passfolio.us 

 

Currency and cryptocurrency exchange services provided by Passfolio Financial LLC (“Passfolio Crypto”), a US Money Services Business registered with FinCEN. Passfolio Financial LLC is not a broker-dealer. Cryptocurrencies are not protected by FDIC or the SIPC.


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