The top 10 cryptocurrencies explained
With the overall cryptocurrency market steadily growing, Bitcoin has lost market share to newcomers like Ethereum and Ripple.
These “altcoins” are also cryptocurrencies, but can be very different to Bitcoin – with many coins based on their own blockchain technology.
To provide an overview of these altcoins, we have listed the top 10 cryptocurrencies in the world and detailed their workings.
The cryptocurrencies are listed below, ranked by market cap, along with their consensus mechanisms and network centralisation status.
Bitcoin
- Proof of Work
- Decentralised
Bitcoin was the first cryptocurrency created and aims to create a decentralised digital currency which can remove the need for third parties to facilitate transactions.
It is the biggest in the world and is the most widely-adopted by exchanges.
Ethereum
- Proof of Work
- Decentralised
Ethereum is a decentralised virtual computer which allows developers to build applications on its blockchain. These applications are open source and run autonomously.
Development is lead by the Ethereum Foundation, which has outlined a roadmap to implement Proof of Stake and new scaling solutions.
Ripple
- Validator consensus
- Semi-centralised
Ripple is a payment protocol which runs on a permissioned blockchain and aims to support instant, cheap transactions.
The protocol has been adopted by financial institutions and it plans to increase its focus on decentralisation by increasing its number of validator nodes to 55.
Bitcoin Cash
- Proof of Work
- Decentralised
Bitcoin Cash is the product of a Bitcoin hard fork, with the new currency featuring bigger block sizes. This resulted in lower transaction fees and increased usability as a transactional currency.
Many Bitcoin Cash developers view the currency as the “true Bitcoin”.
Cardano
- Proof of Stake
- Decentralised
Cardano aims to create a decentralised smart contract platform similar to Ethereum, but it plans to support a number of advanced features.
The cryptocurrency is a work-in-progress, and its “Ouroboros” proof-of-stake consensus mechanism has not been finished.
Litecoin
- Proof of Work
- Decentralised
Litecoin is a decentralised cryptocurrency which is similar to Bitcoin in technical framework.
It aims to serve as a transactional cryptocurrency, boasting lower block times and lower fees than Bitcoin.
NEM
- Proof of Importance
- Decentralised
NEM is a decentralised blockchain with support for multisignature accounts, encrypted messaging, and a reputation system.
The architecture supports private and public blockchains and uses a unique proof-of-importance consensus mechanism, which weights validation voting power depending on account balance and activity.
Stellar
- Stellar Consensus Protocol
- Decentralised
Stellar is a fork of Ripple which has implemented its own consensus mechanism called the Stellar Consensus Protocol.
Stellar aims to provide a global transaction protocol running on a decentralised network of validator servers, although users are required to trust its “anchors” to comply with verified transactions.
IOTA
- Tangle validation
- Centralised
IOTA is a cryptocurrency which is built on a directed acyclic graph instead of a traditional blockchain, and aims to deliver unlimited, fee-less transactions for the Internet of Things.
The cryptocurrency’s vision is to implement a trustless consensus protocol built on user validation, but it currently relies on a single administrator node called the Coordinator to periodically verify the network.
Dash
- Proof of Work
- Decentralised
Dash began as a fork of Litecoin and aims to provide a decentralised transaction system with enhanced features.
The cryptocurrency allows for standard transactions in addition to instant and private transfers via Masternodes.
Now read: What happens to a company’s share price when it gets into crypto
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