The cryptography market is huge and there are more than 2,000 active digital currencies, each with its own goal, technology and plan to change the world. However, to find true diversity, it is not necessary to verify all of them. In fact, it is sufficient to check the five largest coins by market capitalization to see how different cryptocurrencies may actually be. While there are no stablecoins or private coins between them, these five digital coins can still show us a lot about crypto-diversity.
To understand correctly what it means, let's examine the first 5 coins and see how they compare. According to data provided by CoinMarketCap, five cryptocurrencies with the largest market capitalization include Bitcoin (BTC), XRP (XRP), Ethereum (ETH), Bitcoin Cash (BCH) and Stellar (XLM).
Bitcoin is a currency that needs no introduction. Even if you've never heard the word "cryptocurrency", you've almost certainly heard the word "Bitcoin" at least once in your life. This is the number one coin, originally conceptualized at the end of 2008, and officially launched at the beginning of 2009, by a mysterious figure or group known only as Satoshi Nakamoto, who was determined to be an alias. Nakamoto came back into the shadows shortly after the start of Bitcoin and has since been seen only once.
His reasons for creating Bitcoin include the desire to remove power from banks and financial institutions and return it to people. By creating BTC, Nakamoto presented to the world a first digital currency that could be managed by members of his community, while banks as intermediaries would become obsolete. Cryptos has struggled to achieve this goal ever since.
Bitcoin's short 10-year story is full of ups and downs, hacks, accusations, distrust and the like. However, he managed to survive without any support from a centralized institution, using only the faith of his community in it. It peaked at the end of 2017 and at the start of 2018 when it reached $ 20,000 per unit. Since then, it has undergone two major market incidents, one in January 2018 and the other only two weeks ago, which dragged its price to its current value of $ 3.713.
The same happened with its market capitalization. After the first crash in January, its market capitalization continued to fall to around $ 120 billion. However, in the last two weeks, it has been cut in half and is currently only $ 64 billion. Even so, BTC still holds over half of the total market capitalization.
XRP, formerly known as Ripple, is currently the second largest currency by market capitalization. It was created by the Ripple Labs company and, since its creation, it has had to face the controversies and accusations of being centralized, a false cryptocurrency and in the same way. Much of this stems from the fact that XRP is the digital currency preferred by traditional banks.
The fact that it can not be extracted and that a large number of its coins are controlled by its parent company has made it relatively stable. This, in addition to the numerous financial instruments created by the company, has made XRP very popular among financial institutions. These tools and products are mainly dedicated to becoming an alternative to old cross-border transaction systems. Instead of every transaction that takes days to complete due to lack of trust, XRP products would improve the process by providing a guarantee that the banks that are using it can be reliable. In this way, transactions can be completed instantly.
It immediately becomes clear that XRP is a coin that you imagine can be used in a completely different way than Bitcoin. While BTC was meant to be a means of payment, a currency that has the sole purpose of being digital money, XRP is only one of the elements of the financial and technological evolution brought by its real products. This is the best example of crypto-diversity mentioned before.
For a long time, XRP ranked third, close to Ethereum, which was the second largest coin. However, in the second half of 2018, XRP managed to overcome Ethereum twice, with ETH eventually recovering its place. However, after the second market crash of the year, two weeks ago, XRP took over and remained the second since, with a current price of $ 0.34 and a market capitalization of $ 13.98 billion.
Ethereum became the third largest currency by market capitalization two weeks ago, after being beaten by XRP, as previously stated. However, it is a currency that has a lot to do. It is an official representative of the second generation of cryptocurrencies. Bitcoin, as the first currency, is the representative of the first generation. Until the age of Ethereum, cryptos were used only as a means of payment.
After Ethereum was launched, he turned everyone's attention to the functionality of the blockchain, rather than the potential of the cryptocurrency itself. This is what started the second generation and what allowed the ETH to remain a dominant currency for all these years.
With Ethereum, developers have begun to realize that blockchain can be used for more than just transaction logging. Soon, smart contracts and decentralized applications were developed. Similarly to the XRP, Ethereum has moved away from the purpose of Bitcoin and did not want to become a currency used to make transactions. Of course, it can be used as such, but this is not its point. Its purpose is to serve as fuel for smart contracts and dApps, to allow them to run and function as imagined.
He kept Bitcoin's ideas on transparency, decentralization and empowering people. However, his contribution has led to shifting focus to blockchain technology, which eventually led to its further development.
Bitcoin Cash (BCH)
Bitcoin Cash emerged in 2017 as a new fork of Bitcoin. This means that it was not invented in the traditional way, but rather has many similarities with BTC, only that it took off at some point and that it went separate.
At this time, BCH is the fourth largest currency by market capitalization, with a price of $ 173 per currency and a market capitalization of $ 3.03 billion. Furthermore, it is believed that BCH is one of the main reasons for the new market crash.
Similarly to the situation that led to the creation of BCH, his community also had different opinions on where the currency should go from here. Twice a year, it has a bifurcation to implement new updates, and each time, its blockchain takes a new turn, while the old "original" blockchain is left in peace. The last fork happened two weeks ago, on November 15th. It was planned to take place on this date for months and two parts of the BCH community wanted different things.
Over time, and they failed to reach an agreement, the fork led to a division of the BCH community, and none of the two emerging blocks was abandoned. Instead, changes were made to one of them, while the other remained the same as before. The problem came out of the fact that both wanted to be called the true BCH. This is why they entered a struggle for domination that became known as a hash war. To win, each side ruthlessly extracted the new blocks, gathering as much hash power as possible, causing serious damage to the Bitcoin ecosystem and a market crash that affected the entire cryptographic space.
As for the same BCH, it still aims to be used as a payment method and a world currency, just like its parents, Bitcoin.
Finally, there is Stellar, the fifth largest currency by market capitalization. It has a market capitalization of $ 2.67 billion and a price of $ 0.139 per currency. This is a currency that has a relatively similar objective to XRP – to revolutionize cross-border transactions and make them snapshots.
However, while XRP aims to provide its services to banks and other financial institutions, Stellar wants to do the same for individual regular users. This meant that many people supported Stellar on XRP, but the coin still remains the fifth largest crypt, while XRP managed to rise to second place.
Stellar is also known for its low prices and its extreme transaction speed, which actually broke all known records just a few months ago. This officially made the currency faster, with cross-border transactions completed in a few seconds. The project is decentralized and open-source, and does not seem to care much about the rivalry with XRP that discussions on the Internet often mention.
Rather, it aims to provide the best service for its users, to solve important problems and to become the main currency to carry out this type of transaction.
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Disclaimer: this article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and its affiliated companies, employees, writers and subcontractors are cryptocurrency investors and may from time to time have holdings in some of the coins or tokens they cover. Please conduct your own in-depth research before investing in any cryptocurrency and read our full disclaimer.
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