When Bitcoin first launched, no one could have predicted how the cryptocurrency market would evolve into what it is today. Now, Bitcoin is just one of thousands of cryptocurrencies, with the entire market valued at over a trillion dollars. Every day, billions of dollars are traded, and the advancements driven by blockchain technology and digital currencies are astonishing.

If you’ve managed to stay out of the cryptocurrency hype until now, it’s becoming increasingly difficult to ignore. Crypto has officially entered the mainstream, and it’s a sector worth paying attention to.

“Cryptocurrencies and NFTs will continue to expand, and businesses that partner with the right fintech companies and banks early on will be the ones that succeed in the long run. Many organizations are still searching for practical use cases for crypto as a payment method, but I believe we’ll see more of these opportunities emerge this year,” says Menda Sims, Chief Payments Officer at Stax.

By 2022, there were over 10,000 cryptocurrencies in circulation. However, keeping track of all of them would be a monumental task. In reality, only a small percentage of these coins hold significant potential and have a real impact on the market.

TL;DR

• A cryptocurrency is a virtual or digital currency that uses cryptography to secure its transactions and control the creation of new units.
• The most popular ones include Bitcoin, Ethereum, Tether, Cardano, and more.
• There are different categories of crypto including mining-based coins, stablecoins, memecoins, and security tokens. 

What are Cryptocurrencies?

Cryptocurrency is a form of digital currency that uses cryptography to secure transactions and control the creation of new units. This method safeguards electronic data by converting it into complex code, making it difficult to decipher.

What sets cryptocurrency apart is its decentralized nature and partial anonymity. Every transaction is recorded on a blockchain, which serves as a transparent, public digital ledger. The blockchain tracks every transaction ever made, ensuring complete transparency while eliminating the need for a central authority to manage or regulate the currency. This is why cryptocurrencies are described as “decentralized.”

Blockchain technology plays a pivotal role in the cryptocurrency ecosystem. It is open-source, meaning any developer can access and build upon it, which has led to the creation of numerous crypto-based financial products and services in today’s market.

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• Best Crypto Exchanges and Apps
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Is An Altcoin Different From a Cryptocurrency?

When exploring cryptocurrencies, you’ve likely encountered the term “altcoins.” This might seem confusing, as many different cryptocurrencies fall under this label. Essentially, Bitcoin is considered the original cryptocurrency, while any other coins are referred to as “altcoins,” meaning alternative coins.

In the broader perspective, all altcoins are still cryptocurrencies. As blockchain technology continues to evolve, new types of coins are developed with varying purposes and functions. While all are classified as crypto, the way they are created and used can differ. Examples include:

Mining-based coins

Mining-based coins operate similarly to Bitcoin, relying on computer networks to mine new coins into circulation. This process requires significant computational power, consuming large amounts of energy. As a result, many environmentalists and critics question whether the energy costs associated with mining justify the benefits, raising concerns about its long-term sustainability.

Stablecoins

Stablecoins are linked to other assets to reduce the extreme volatility often seen in the cryptocurrency market. These assets are typically fiat currencies, such as the US dollar. Tether and USD Coin are two of the most prominent stablecoins, offering more stability compared to other cryptocurrencies by being tied to real-world financial assets.

Security tokens

Security tokens act much like digital receipts, representing fractional ownership in various assets. Companies can issue security tokens to validate ownership stakes, and they can also be used to verify ownership of items like art. This blockchain-based, crypto-like token has a wide range of potential applications across different industries.

Memecoins

Many people are familiar with Dogecoin and Shiba Inu, even if they aren’t well-versed in cryptocurrency. These coins, which are built around meme culture, have gained popularity largely due to their humorous branding. While they may seem silly, their value should not be underestimated. A single tweet from influential figures like Elon Musk can significantly boost the value of these seemingly absurd meme coins.

What are Cryptocurrencies Used For?

Many people buy crypto as an investment, but most crypto can now be used to purchase goods and services. For merchants, this poses a great benefit to accepting more transactions.

“As customers change the ways they shop and pay, merchants will have to offer a wider range of alternative payment methods that not only offer consumers options at checkout but also reduce their cost of acceptance. For SMBs, the largest line-item cost can often be acceptance of payments. With that in mind, they want to offer consumers more peer-to-peer payment options…”

– Menda Sims, Chief Payments Officer, Stax.

As crypto holders hold their own crypto (there are no financial institutions in the middle), these transactions are peer-to-peer, making it easier for merchants and friends to transfer easily between one another.

For investors, decentralized financial services (Defi) solutions make it easy to not only collect and hold cryptocurrencies. Holders can stake their crypto, trade, and use their crypto to invest in other blockchain-based projects and decentralized organizations. Anything you can do in the traditional financial markets, there is a crypto equivalent operating on the blockchain.

Below, as we look at the most popular cryptocurrencies, we will uncover each of their specific uses.

Are Cryptocurrencies Regulated?

In the United States, efforts are underway to establish a regulatory framework that allows cryptocurrency to thrive while preserving the systems vital for societal functioning. In March 2022, President Biden signed an Executive Order focused on ensuring the responsible development of digital assets.

This Executive Order recognizes the industry’s potential and emphasizes the necessity of cross-departmental research to address associated risks.

Stay informed about new developments in cryptocurrency regulation, as they may significantly impact your investments and transactions within this evolving landscape.

20 of the Most Popular Cryptocurrencies to Watch This Year

In this section, we’ll examine both well-established and emerging cryptocurrencies, highlighting the most widely used crypto assets, their applications, and the reasons behind their growing popularity.

1. Bitcoin (BTC)

Bitcoin, created in 2009, is the original and most recognized cryptocurrency. It remains the largest cryptocurrency by market capitalization.

Often referred to as “digital gold,” Bitcoin is primarily viewed as a store of value and is considered a solid investment due to its long history of steady growth. While past performance does not guarantee future results, Bitcoin continues to be the cryptocurrency that most people trust and value, contributing to its rising price.

Bitcoin is widely accepted for transactions, similar to traditional currencies. Many retailers accept Bitcoin, and it can be used for various online purchases. To date, it remains the preferred cryptocurrency for buying both physical and digital goods and services.

2. Ethereum (ETH)

Launched in 2015, Ethereum quickly emerged as the second-largest cryptocurrency, distinct from Bitcoin in both purpose and functionality. It serves as a decentralized platform that supports a wide array of decentralized applications (DApps).

At its core, Ethereum enables the use of smart contracts—self-executing programs that run on its blockchain without the risk of fraud or interference from third parties. This innovative technology opens the door to numerous applications, ranging from gaming to financial services.

Ethereum is also the original blockchain for non-fungible tokens (NFTs). Through smart contracts, NFTs can be created, bought, and sold, providing unique features such as artist royalties and specialized utilities. These utilities allow gamers to purchase in-game items, like outfits and tools, using Ether, enhancing the overall gaming experience.

3. Tether (USDT)

Tether is a stablecoin pegged to the US dollar, making it one of the most widely used stablecoins in the cryptocurrency market. Currently, it ranks as the third-largest cryptocurrency.

The primary purpose of Tether is to provide stability to other cryptocurrencies. During periods of significant market volatility, investors frequently convert their holdings into USDT to protect their investments from potential losses. This strategy not only helps stabilize the market but also enables investors to buy cryptocurrencies at lower prices and sell them when prices rise.

4. USD Coin (USDC)

USD Coin (USDC) is a stablecoin developed by Circle and Coinbase, designed to maintain a 1:1 backing with the US dollar. It is readily accessible on the Coinbase platform.

Similar to Tether, USD Coin serves to stabilize other cryptocurrencies. Its availability on Coinbase enhances its accessibility, making it one of the more user-friendly stablecoins in the market. Coinbase is renowned as one of the leading cryptocurrency exchanges, facilitating seamless buying, selling, and transferring of digital assets.

5. BNB (BNB)

BNB is the native token of Binance, one of the most widely used platforms for buying, selling, and transferring cryptocurrencies.

Users can utilize BNB to pay transaction fees on the Binance platform, often benefiting from lower fees compared to paying with other currencies. Additionally, BNB can be used to purchase other cryptocurrencies on the Binance exchange, enhancing its utility within the ecosystem.

6. Binance Coin USD (BUSD)

Binance USD (BUSD) is another stablecoin developed by Binance, maintaining a 1:1 backing with the US dollar.

Similar to other stablecoins, BUSD is primarily used to stabilize the value of cryptocurrencies. Being part of the Binance ecosystem, it can also be utilized to pay transaction fees on the Binance platform and to purchase other cryptocurrencies, making it a versatile option for users.

7. XRP (XRP)

XRP is the native token of Ripple, a payment network designed for banks and financial institutions. Built on its proprietary blockchain platform, known as the XRP Ledger, Ripple facilitates fast and cost-effective transaction settlements.

Due to its practical applications in the financial sector, XRP has gained adoption among some of the largest banks worldwide, enhancing its reputation as a reliable solution for streamlining cross-border payments.

8. Cardano (ADA)

Cardano is a smart contract platform founded in 2015 by Charles Hoskinson, one of Ethereum’s co-founders.

What sets Cardano apart is its use of a proof-of-stake consensus algorithm, which enhances energy efficiency compared to traditional proof-of-work systems. To illustrate, processing Bitcoin transactions consumes approximately 110 terawatt-hours of energy annually, equivalent to the total energy consumption of small countries like Sweden. In contrast, Cardano is reported to be 1.6 million times more energy-efficient than Bitcoin, according to Forbes.

Currently, Cardano is focused on integrating a new programming language called Plutus, which aims to simplify the development of smart contracts, further enhancing its capabilities within the blockchain ecosystem.

9. Solana (SOL)

Solana is a high-speed blockchain protocol developed in 2017 by Anatoly Yakovenko, a former Chief Technical Officer at Qualcomm.

The standout feature of Solana is its remarkable transaction speed, capable of processing thousands of transactions per second. This efficiency makes Solana an ideal choice for applications that require rapid transaction processing, such as video streaming and gaming, outpacing other protocols like Ethereum.

10. Dogecoin (DOGE)

Dogecoin was launched in 2013 as a lighthearted cryptocurrency inspired by the popular Doge meme featuring a Shiba Inu dog.

What started as a joke has evolved into one of the most recognized cryptocurrencies, largely due to its low price, making it accessible to a broad audience.

Often referred to as “a coin for the people,” Dogecoin has also been used for charitable initiatives, including funding projects like building water wells in Kenya.

11. Polkadot (DOT)

Launched in 2016, Polkadot is a “next-generation” blockchain protocol designed to be scalable, flexible, and interoperable.

What sets Polkadot apart is its use of “parachains,” which are specialized chains tailored for specific applications. This design promotes a more efficient and customizable allocation of resources.

Additionally, Polkadot is developing “Polkaswap,” a decentralized exchange that will enable users to trade DOT, ETH, and other assets in a trustless environment, enhancing the trading experience within the ecosystem.

12. Dai (DAI)

Dai is a stablecoin pegged to the US dollar, developed by MakerDAO, a decentralized autonomous organization (DAO) operating on the Ethereum blockchain.

What distinguishes Dai is its use of “collateralized debt positions,” meaning it is backed by various assets, such as ETH or BAT.

This mechanism contributes to Dai’s stability, shielding it from the high volatility typically associated with other cryptocurrencies.

13. Polygon (MATIC)

Polygon is a “scalability solution” designed for Ethereum, functioning as a “layer 2” protocol that enhances Ethereum’s scalability.

A key feature of Polygon is its use of “sidechains,” which are independent chains that process transactions separately. This design alleviates some of the workload on the Ethereum blockchain, thereby improving overall scalability.

Additionally, Polygon is developing a “stake-mining” mechanism that enables users to earn rewards by staking their tokens on the network, further incentivizing participation in the ecosystem.

14. Shiba Inu (SHIB)

Shiba Inu is a cryptocurrency that emerged in 2021 as a “joke coin,” inspired by the popular Dogecoin meme featuring a Shiba Inu dog.

However, unlike Dogecoin, which boasts a market cap of $1 billion, Shiba Inu has achieved a market cap of $5 billion. This significant valuation is partly due to its creation on the Ethereum blockchain, which facilitates “token cloning.”

This feature allows anyone to create their own version of Shiba Inu, resulting in over 100 different iterations of the coin currently available in the market.

15. TRON (TRX)

TRON is a decentralized entertainment protocol established in 2017, aimed at “decentralizing the web” to create a more open internet.

With its own scalable blockchain, TRON is capable of processing transactions rapidly, enhancing user experience across its platform.

TRON is currently involved in various initiatives, including the TRON Arcade, a gaming platform, and “Project Atlas,” an ambitious endeavor focused on further decentralizing the internet.

16. Avalanche (AVAX)

Avalanche is a robust platform designed for launching decentralized finance (DeFi) applications and enterprise blockchains, focusing on scalability, security, and interoperability.

Utilizing a “proof-of-stake” consensus model, Avalanche allows users to earn rewards by staking their tokens on the network.

By leveraging smart contracts, Avalanche aims to enhance the platform’s usability, making it more accessible for developers and users alike.

17. UNUS SED LEO (LEO)

UNUS SED LEO is a token designed to enhance the Bitfinex exchange, allowing users to pay for trading fees with LEO and receive discounts in return. Launched in 2019, this token is pegged to the US dollar.

In addition to fee discounts, UNUS SED LEO enables users to earn rewards by staking their tokens on the exchange. Staking involves locking up tokens to bolster the network’s security, with rewards distributed in the form of additional LEO tokens.

18. Litecoin (LTC)

Litecoin is a cryptocurrency launched in 2011 as a “lighter” alternative to Bitcoin. It boasts several unique features, including faster transaction speeds and enhanced storage efficiency.

Often regarded as a “testnet” for Bitcoin, Litecoin allows developers to experiment with new features before integrating them into Bitcoin. As one of the earliest cryptocurrencies, second only to Bitcoin, Litecoin has cultivated a strong and dedicated community of supporters.

19. Stellar (XLM)

Stellar is a payment network designed for fast, cross-border transactions. Built to be scalable, it seamlessly integrates with existing financial infrastructure. Stellar utilizes a “consensus protocol,” eliminating the need for mining to validate transactions, which enhances its energy efficiency compared to other cryptocurrencies.

In addition to its native cryptocurrency, Stellar is actively developing projects such as “StellarX,” a decentralized exchange, and the “Lightning Network,” aimed at further increasing the speed and scalability of its transactions.

20. Bitcoin Cash (BCH)

Bitcoin Cash is a “fork” of Bitcoin, meaning it originated as a modified version of the original cryptocurrency. The primary distinction is its block size, which is eight times larger than that of Bitcoin, enabling it to process more transactions per second.

Additionally, Bitcoin Cash employs a different mining algorithm compared to Bitcoin, making it more accessible to miners who may not have specialized equipment.

Crypto For Merchants

While Stax does not currently accept cryptocurrencies, we recognize the importance of staying attuned to the evolving payment preferences of customers.

As government investigations deepen and media coverage of cryptocurrency transactions becomes more frequent, consumers are likely to start exploring these payment methods. Staying informed is essential. Keep an eye on the most widely used cryptocurrencies and consider how other crypto-based financial solutions could enhance your business.