Crypto Investing A New By now everyone’s heard of Bitcoin. It introduced the world to blockchain or distributed ledger technology and as a crypto asset, it is the center of the universe. Crypto Investing But bitcoin is hardly alone. An entire galaxy of crypto assets has been created to support a wide range of use cases and applications focused on verticals such as identity management, data storage, gaming, banking, lending, social media, and streaming. Because Bitcoin started the industry, virtually every other crypto asset is called an alt-coin. Alt-coins can be categorized in a few different ways.
Protocol Tokens
Protocol tokens also referred to as Level-1 or base layer tokens, are native to a blockchain and are necessary for the operation of a given platform. Another protocol token, Ethereum is by far the most prominent and popular alt-coin. It has the second-largest market capitalization of $513 billion.
Behind only bitcoin ($1.04 trillion). Bitcoin is relatively rigid in its composition, which is by design, as more functionality offered by a blockchain can also create additional security vulnerabilities. Crypto Investing Ethereum operates similarly to Bitcoin, where miners expend substantial amounts of computer power to add transactions to the network. That said, there are many other prominent blockchains with their protocol tokens, with some of the largest beings.
Application Tokens.
Crypto Investing If the base layer of a blockchain is the operating system, then decentralized applications (apps) are the programs that run on top of them. Crypto Investing Dapp tokens first came to prominence in 2017 and 2018 during the initial coin offering (ICO) craze, when many founders raised millions sometimes.
Billions of dollars through token sales to fund product development. It is worth noting that the vast majority of these ICO projects failed and the value of their assets went to zero, which was a reflection of the novelty, hyperbole, and excitement of the space. Nonetheless, today there are still dozens of app tokens in existence with market capitalizations.
In the hundreds of millions or even billions of dollars that underpin applications with real utility and actual business operations that make money, headlined by decentralized finance (Defi) tokens. Crypto Investing Some of the most prominent include Compound, AAVE, Uniswap, SushiSwap, Curve, PancakeSwap, and Maker.
Think of smart contracts as if/then statements built into blockchains. For instance, you could place an order on a decentralized exchange to buy bitcoin if the price hits a certain point. Today. There is more than $270 billion locked up in blockchain applications and Defi tokens.
Finally, it is important to highlight the latest development in crypto, non-fungible tokens (NFTs). They must be fungible. NFTs are the exact opposite of this. While they operate on top of blockchains just like any protocol or app token, they have a set of unique properties or characteristics that make them unique. If bitcoin is the first iteration of scarce digital value, then NFTs are the natural successors.
