The Most Popular Cryptocurrencies
There is a specific trio of cryptocurrency assets that have historically occupied the top 3 positions and continue to do so. All have solid, objective reasons for their supremacy. Of course, they also have their pluses and minuses, but no other projects have managed to challenge their leadership so far.
Bitcoin (BTC)
Bitcoin is the undisputed leader of the cryptocurrency world. It serves as a flagship of the cryptocurrency market, the first and most popular cryptocurrency, the most expensive crypto asset, and the largest one by capitalization. Bitcoin literally leads the market – fluctuations in BTC value invariably affect changes in the value of all other assets. Bitcoin is technically limited, and trying to deviate from its formula causes hard forks. Litecoin (LTC) and Bitcoin Cash (BCH) are the largest ones, ranked in the top 20 by capitalization and trading volume.
Bitcoin’s main limitations concern its scalability and mining process. In addition, the problem of ensuring its value is another weakness of BTC. There is no clear answer to this, and so Bitcoin market growth remains unrestrained, forcing financial analysts to consider the main cryptocurrency as a “bubble.”
Ethereum (ETH)
Ethereum is the second most popular cryptocurrency and differs significantly from Bitcoin. You can see ETH’s improvements in all aspects: a different technical base, the mining model, the system functionality, but most importantly, the issue of ensuring its value. Ethereum is not just a cryptocurrency. It is a software environment for creating and running applications based on distributed registries. ERC-20 tokens are the foundation of many successful cryptocurrency projects, the most popular of which is a stablecoin known as Tether (USDT).
Tether (USDT)
Tether is a stablecoin that serves as a “digital dollar.” It is pegged against the U.S. dollar and maintains a 1-to-1 ratio with the U.S. dollar in terms of value. The main difference between Tether and stablecoins from conventional cryptocurrencies is the absence of high volatility, which is a consequence of ensuring the currency price by pegging it to real assets. This fact allows USDT to take first place by trading volume (more than $60 billion per day). By comparison, the trading volume of BTC is about $36 billion, and ETH’s is $26 billion.
At the same time, the main advantage of USDT is also its main weakness. The ensuring of tokens has been questioned, the currency has centralized management by a private company, is affiliated with Bitfinex, and has been the subject of investigations, lawsuits, and other scandals. Moreover, according to some researchers, Bitcoin’s bubble is inflated by Tether.
Other Popular Cryptocurrencies
In 2021, FOMO, or the “fear of missing out,” is driving cryptocurrency prices upward – demand, prices, and capitalization are increasing across the board. Among the most popular assets, almost all have interesting prospects for investment and practical application, being the coins of large ecosystems rather than individual projects.
Binance Coin (BNB)
Binance is one of the largest cryptocurrency exchanges. The token was originally created to pay commissions within the exchange and was based on the ERC-20 protocol. Over time, the token went through several public offerings, partially moved to the Binance Smart Chain, and was used to conduct IEOs on Binance Launchpad. Its liquidity ensures constant user demand for the services of the Binance ecosystem – the trading volume on the exchange alone exceeded $3 trillion in 2020.
Cardano (ADA)
Cardano is a blockchain platform divided into two separate layers and a competitor to Ethereum. The platform allows the use of cryptocurrency wallets, creation of tokens, execution of smart contracts, operation of decentralized applications. It also implements the ability to create sidechains and perform multiparty computation. ADA is the internal currency of the Cardano ecosystem, which gives a voice in systems management, allows you to pay commissions, and acts as a reward for mining and staking.
Dogecoin (DOGE)
This famous cryptocurrency started as a joke. It was created based on Litecoin back in 2013, and until 2020, it did not have any significant success apart from some rare charity actions. But in 2020, the situation changed thanks to a TikTok trend, the attention of “economic rebels” from Reddit, and supportive tweets from Elon Musk. As a result, the coin’s value growth exceeded 20000% within a year.
Ripple (XRP)
Ripple is one of the largest cryptocurrency exchanges based on distributed ledger technology, characterized by high transaction speed and relative anonymity. It uses XRP coins as a means of internal settlement and an intermediate element in exchanging currencies and other assets. Many large international banks actively use Ripple’s technology for cross-border payments. For several years, the Ripple system has been appearing in the financial tech world as an “alternative to SWIFT.” The total trading volume of XRP as of July 2021 is about $3 billion.
Uniswap (UNI)
Uniswap is the largest decentralized exchange (DEX) and the fourth largest cryptocurrency exchange overall by daily trading volume (as of fall 2020). The leading service is cryptocurrency exchange transactions without intermediaries, based on a distributed registry. The launch of its own token in September 2020 was a forced measure, a response to competition. A week before, the adoption of tokens by a very similar rival DeFi protocol called SushiSwap took place, and the Uniswap exchange lost about 75% of its liquidity. Nevertheless, the UNI token’s launch was successful and improved the situation – the cryptocurrency went into the top 30 and then into the top 10 of the overall ranking by capitalization.
Polkadot (DOT)
Polkadot is an ambitious multiplatform. Its main goal is to unite all existing blockchains into a single global ecosystem in which decentralized data exchange will be implemented. The Polkadot system already allows the creation of new blockchains and the connection of existing ones, exchanging information between them. The system is based on cross-registration and computation technology. DOT tokens are used as rewards. They allow owners to participate in the system management and provide a consensus mechanism. The original system and prospects allowed Polkadot to conduct three successful token sales since 2017, raising more than $200 million for development and establishing itself in the top 10 cryptocurrencies by capitalization.
