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Classification of the types of cryptocurrency

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Nobody can tell exactly the number of valid digital coins. They appear every day and just as quickly disappear. However, how many types of cryptocurrency there are, we can speak with great confidence.

The problem of dividing cryptocurrencies into types

Since each digital coin is based on the algorithm of the blockchain, all of them have a great degree of universality. Theoretically, each of them can be used for settlement operations, organizing the initial placement of tokens and financial exchange.

However, initially, the blockchain was created as a means of payment, which combines the final cost of the goods and the purchased technology. But it happened that bitcoin has become a means of investment, that is, the very process of its acquisition has become a financial operation. As it turned out, it is not very suitable for servicing trading operations. When the number of transactions was measured in hundreds and thousands, the technology allowed you to quickly carry out the purchase and sale operations.

When the number of active users began to be measured by millions, new types of cryptocurrency appeared. This result was obtained due to the following improvements:

  • the cryptographic algorithm has changed;
  • the block size has increased;
  • the principle of compensation for miners has changed;
  • more technological algorithms for information processing has appeared.

As a result, bitcoin became the main financial instrument, but in other directions, it lost its lead. As it should have happened, the era of narrow specialization has come. Now conditionally all kinds of digital coins began to develop in two directions. One of them is aimed at accelerating transactions, and the other is for conducting the initial placement of tokens.

Types of cryptocurrency for trading operations

The original idea of the appearance of digital coins consisted in providing the society with a new form of safe transactions. It was planned to replace them with conventional payment terminals VISA and Mastercard. Because bitcoin was not suited to this task, the ripple was developed. It became the ancestor of a new technology, which is still in development.

There exist different types of cryptocurrency, but none of them has yet become a full-fledged replacement for the payment system. The problem is that the processing speed of the blockchain is far from perfect. The world's largest corporations have realized the promise of new technology quite recently, and therefore all projects are still under development.

It is planned that during the exchange operation its duration will not exceed three seconds. The first tests showed that blockchain could process up to 2 million transactions with a full security guarantee. And already in early 2019, it is planned to begin a massive use of blockchain in financial transactions.

Cryptocurrency for capital raising

Another important area for the use of digital money has become the ICO technology, the Initial Coin Offering. It allowed attracting funds from private investors with minimal overhead costs. The leader of this direction was Ethereum.

Some experts are sure that the growth boom in the cryptocurrency in 2017 was connected with this technology. When private investors were able to buy tokens, and businessmen could get cheap financing for their projects.

There is a possibility that in the near future new types of cryptocurrency will appear. Blockchain turned out to be diverse, and this provokes the further development of technology.

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