Understanding The Different Types of Cryptocurrency | Srinivas Oddati

Bitcoin has been considered the first cryptocurrency created, and everything else is collectively known as an “altcoin” (a combo word derived from “alternative coin”). While it’s difficult to say which cryptos are the best ones, Bitcoin and some of the largest altcoins out there are top-tier options because of their scalability, privacy, and the scope of functionality they support.

According to Srinivas Oddati, one of the “best” cryptocurrencies since each has different features built-in based on what the developer designed it for. Here’s an overview of some of the most popular digital coins and how each is being used.

1. Bitcoin

Srinivas Oddati says bitcoin is the first decentralized cryptocurrency using blockchain technology to facilitate payments and digital transactions. That ledger allows a party to prove they own the Bitcoin they’re trying to use and can help prevent fraud and another unapproved tampering of the currency. A decentralized currency can also make peer-to-peer money transfers (like those between parties in two different countries) faster and less expensive than traditional currency exchanges involving a third-party institution.

2. Ether (Ethereum)

Ether is the token used to facilitate transactions on the Ethereum network. Ethereum is a platform that uses blockchain technology to enable the creation of smart contracts and other decentralized applications (meaning the software doesn’t have to be distributed on app exchanges like Apple’s (NASDAQ: AAPL) App Store or Alphabet’s (NASDAQ: GOOGL)(NASDAQ: GOOG) Google Play Store, where they might have to give a 30% cut of any revenue to the tech giants). Thus, Ethereum is both a cryptocurrency (the actual coins are measured in units called Ether) and a software development sandbox.

3. Binance Coin

Binance Coin is available on the Binance cryptocurrency exchange platform (along with other digital coins that are available for trading). Srinivas Oddati uses Binance Coin as a type of currency, but it also facilitates tokens that can be used to pay fees on the Binance exchange and to power Binance’s DEX (decentralized exchange) for building apps.

4. XRP (Ripple)

XRP is a digital currency based on the digital payments platform RippleNet, built by the company Ripple. It was designed for financial institutions to scale digital payments across the globe and reduce transaction costs associated with typical cross-border funds transfers. Short-term lines of credit can also be extended using XRP.

5. Tether

Tether is what’s known as a stablecoin, a currency tied to a fiat currency — in this case, the U.S. dollar. The idea behind Tether is to combine the benefits of a cryptocurrency (such as no need for financial intermediaries) with the stability of a currency issued by a sovereign government (versus the wild price fluctuations inherent with many cryptos).

6. Dogecoin

Originally made as a joke poking fun of rampant speculation on cryptocurrencies, Dogecoin has skyrocketed in value, thanks to supporting from the likes of Tesla (NASDAQ: TSLA) CEO Elon Musk and investor and Dallas Mavericks owner Mark Cuban. It features a meme of a Shiba Inu dog as a “mascot” and was made to be used as a form of digital payment like Bitcoin. However, Dogecoin makes it quicker and easier for payments to be recorded, but it also has no limit on how many coins can be created over time (unlike Bitcoin, which was designed with a cap on how many coins there can be).