How Many Cryptocurrencies Are There?

How Many Cryptocurrencies Are There?

 How many cryptocurrencies are there? According to CoinMarketCap data, there are presently around 13,506 in circulation. New tokens appear on a regular basis, each with its own use case and narrative.

The market capitalization of the industry swings on a regular basis, and is frequently influenced by the performance of large digital assets such as Bitcoin and Ethereum. BTC currently has a 44 percent market share as of November 2nd, but this could start to decline as altcoins gain traction.

Here's a figure that shows how skewed the market is toward the top. The top five cryptocurrencies (Bitcoin, Ethereum, Cardano, Tether, and Binance Coin) account for more than 70% of the total market capitalization of the crypto sector. Many of these smaller altcoins have a market cap of only a few million dollars, and the price of each coin can drop dramatically in the weeks and months following their birth. A significant amount of cryptocurrencies in circulation are also 'forks.' Bitcoin Cash and Bitcoin SV, for example, are forks of Bitcoin, while Ethereum is a fork of Ethereum Classic, and others claim that Stellar is a hard fork of XRP.

How many cryptocurrencies will survive?

When it comes to determining how many cryptocurrencies will survive, it's important to keep in mind that there is a sizable graveyard of defunct digital assets. Many of these are related to initial coin offers (ICOs) that took place during the 2017 and 2018 cryptocurrency booms. In some situations, projects were never completed, and investors lost a significant amount of money.

Others were eventually exposed as con artists. BitConnect is a good illustration of this. BCC was once one of the top 20 cryptocurrencies in terms of market capitalization. However, it was ultimately found to be a Ponzi scheme, and the coin's value plummeted once the platform's administrators shut it down. Some digital assets faded from view because they were no longer used, while others were subjected to terrible hacks that undermined investor trust, and a few imitation cryptocurrencies were created as a joke.

How many types of cryptocurrencies are there?

As our guide explains here, there are seven main types of crypto assets out there. They include:

  • Payment-focused digital assets such as Bitcoin, Litecoin and Ethereum
  • Stablecoins such as Tether, which have value pegged to an underlying asset such as the US dollar
  • Central bank digital currencies, a digitised version of fiat money that has been embraced by the likes of Sweden
  • Privacy coins, which are designed to deliver anonymity to senders and receivers
  • Governance tokens, which give owners the right to vote in decisions affecting a blockchain’s future development
  • Utility tokens, which unlock access to particular services
  • Non-fungible tokens, where each token has unique characteristics that separates them from all others

Another question is how many cryptocurrencies are there going to be in five years’ time. It's probable that the markets may consolidate, resulting in a reduction in the quantity of high-quality assets available in the future. We've already seen numerous protocols investigate mergers in the DeFi sector, which has witnessed a surge in popularity over the course of 2020, in order to pool development resources and provide more competitive yield farming incentives to users.

However, the number of cryptocurrencies in existence will be determined by whether mainstream acceptance rises in this decade, as predicted. PayPal is now offering its users a crypto service, which will eventually allow individuals to make transactions with digital assets from millions of retailers. If this proves to be a success, small firms may be able to establish their own tokens to reward their most loyal consumers.

If Facebook's Libra coin succeeds in gaining traction and attracting investors, it's feasible that other major corporations would follow suit and develop their own digital assets. If adoption picks up, Visa and Mastercard may start to be concerned about their dominance in the digital payments industry – and they may start to innovate.

How many different cryptocurrencies are there?

One issue that the crypto sector has had to deal with is that many digital assets lack a compelling use case — anything that demonstrates their use.

During the 2017 ICO bubble, many opportunistic businesses opted to slap the word "blockchain" on a white paper to pique investor interest. This worked in many situations, with several start-ups securing multimillion-dollar financing in a matter of seconds.

The market has begun to develop, and new cryptocurrencies are beginning to be scrutinized more closely to see if they can add value. ICOs have also faded into obscurity. Initial exchange offers (where a trading platform undertakes due diligence on a product) and security token offerings have mostly supplanted them.

The emergence of tokenisation is a trend to watch in the next decades, even if it does not fit inside the scope of cryptocurrencies. This is where physical items, such as real estate and university degrees, as well as gold and equities, are represented on the blockchain.

How many crypto coins are there, and why cryptocurrencies matter

The number of cryptocurrencies available can be confusing. If you decide to invest in a smaller cryptocurrency because you enjoy the use cases it provides, keep in mind that low levels of liquidity may make selling it at the targeted price more difficult.

Many cryptocurrency supporters believe that cryptocurrencies will lower transaction fees for both customers and merchants, as payment processing providers frequently erode small businesses' already narrow profit margins. Crypto can also assist in making cross-border payments far less expensive and much faster than what banks can now offer. And last but not least, financial inclusion is a big buzzword in this industry – with many companies determined to reach unbanked populations who struggle to access everyday services at the moment.

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