Cryptocurrency: you’ve probably heard about it if you’re not living under a rock.

Though it’s pretty new, over 14% of Americans have already invested in cryptocurrency.

Even apps like Venmo let you invest in cryptocurrencies. If you’ve looked into investing, you might have been overwhelmed by the number of different types. You’ve probably muttered to yourself, “Why so many cryptocurrencies?”

In this article, we will learn basics like, “What is cryptocurrency?”, go over popular forms of crypto, and answer “Why are there so many cryptocurrencies?”

If this sounds like you, keep reading.

What Is Cryptocurrency?

Before we can even get into WHY there are so many cryptocurrencies out there, we must first know what cryptocurrency even is.

Cryptocurrency is a decentralized, digital payment method. It is decentralized in the fact that no one entity controls the value of the digital currency. Instead, the currency’s value is determined by how much, or how little, the community uses it (think supply vs. demand).

If you’ve heard of crypto, then you’ve also probably heard the word “Blockchain” thrown around with it. Cryptocurrency is powered by blockchain technology. In short, this means that a blockchain, basically a digital ledger, records each transaction so that there is an accurate record.

You might be thinking: If cryptocurrency is all digital, why do people talk about cryptocurrency mining? Cryptocurrency mining is the complex process of creating new crypto coins and entering them into the system. In order to do this, you have to have a powerful computer and the ability to solve extreme math problems.

The reward for crypto miners is that they receive crypto for the hard work they put in.

If you don’t want to mine for your own cryptocurrency, you can buy crypto online, through an app, or even at your local Bitcoin ATM, such as ByteFederal.

Types of Cryptocurrencies

There are over 10,000 cryptocurrencies on the market. Here’s a list of some of the most popular digital currencies.

• Bitcoin Cryptocurrency
• Dash Cryptocurrency
• Ether Cryptocurrency
• LiteCoin Cryptocurrency
• Binance Coin Cryptocurrency
• Dogecoin Cryptocurrency

These are just 6 popular forms of digital currencies out of thousands. So, why are there so many forms of cryptocurrency?

Why So Many Cryptocurrencies?

Alright, the question you’ve been asking: Why are there so many cryptocurrencies? There are a few reasons as to why there are multiple (thousands) of cryptocurrencies.

1. Blockchain technology allows anyone to create a form of cryptocurrency if they want to code it.
2. People have different ideas for how cryptocurrency should work, therefore, they create their own form of cryptocurrency.
3. Some cryptocurrencies exist solely to be built on top of. A form of crypto can be used to create an updated version.
4. Not all cryptocurrencies are alive.
5. There are different types of cryptocurrency, such as Tokens, Stablecoins, Proof of Work, and Proof of Stake.

The takeaway? Not all cryptos are the same, and it’s best to do your research before investing in one.

Cryptocurrency and You

Now you at least understand what cryptocurrency is, the popular forms, and why so many cryptocurrencies are on the market. Whether you want to invest in some crypto is completely up to you, but at least you’ve done some research!

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