Many people buy crypto as an investment, but most navigate here crypto can now be used to purchase goods and services. For merchants, this poses a great benefit to accepting more transactions.
“As customers change the ways they shop and pay, merchants will have to offer a wider range of alternative payment methods that not only offer consumers options at checkout but also reduce their cost of acceptance. For SMBs, the largest line-item cost can often be acceptance of payments. With that in mind, they want to offer consumers more peer-to-peer payment options…”
Are Cryptocurrencies Regulated?
In the US, regulation is underway to find a middle ground where cryptocurrency and its positive implications can flourish. Without crumbling the systems that are essential for societies to function. In March 2022, President Biden signed an Executive Order on Ensuring Responsible Development of Digital Assets.
Essentially, the Executive Order acknowledges the potential of the industry and the need for cross-department research to address risk.
Watch out for new developments to best understand what that means for you when investing in or transacting with cryptocurrencies.
Looking at both those that are currently in favor and those that look to be on the rise, we have listed the most widespread crypto assets, how they’re used and why they’re so popular.
- Bitcoin (BTC)
Bitcoin is the original cryptocurrency and is still the most well-known. It was created in 2009 and is currently the largest cryptocurrency by market capitalization.
Often seen as a way to store value, Bitcoin is seen by many as “digital gold.” It’s considered a good investment with a long history of steady growth. Although this is not guaranteed, it is the cryptocurrency that most people place the most value in. Therefore, its value continues to go up.
Bitcoin is the most common cryptocurrency for use, similar to traditional currencies. Many shops accept Bitcoin. Many online purchases can be made with Bitcoin. So far, it is the cryptocurrency of choice for buying both real-world and digital goods and services.
- Ethereum (ETH)
Ethereum was created in 2015 and quickly rose to become the second-largest cryptocurrency. It is quite different from Bitcoin, designed to serve a different purpose, and is now used for a variety of interesting decentralized applications (DApps).
Ethereum is a decentralized platform that runs smart contracts. These are applications that can be built on top of Ethereum’s blockchain. These contracts are programs that run exactly as programmed without any possibility of fraud or third-party interference.
Smart contracts allow for a wide range of possibilities, from games to financial applications. Ethereum was the blockchain birthplace of NFTs. Through smart contracts, NFTs could be created, sold, and programmed in a variety of interesting ways to enable artists to get royalties or NFTs to have unique utilities. These utilities are what make it possible for gamers to buy outfits and tools with Ether and use them in the game.
- Tether (USDT)
Tether is a stablecoin that is pegged to the US dollar. Currently, it is the third-largest cryptocurrency and one of the most popular stablecoins.
The main use for Tether is to “tether” or stabilize other cryptocurrencies. When the crypto market fluctuates a lot, investors often move their money into USDT so they don’t lose as much money. This helps to stabilize the market and provides a way to buy cryptos when prices are low and sell when they are high.
- USD Coin (USDC)
USD Coin is a stablecoin created by Circle and Coinbase. It is backed 1:1 with the US dollar and is available on Coinbase.
Like Tether, USD Coin is used to stabilize other cryptocurrencies. Because it is available on Coinbase, it is one of the more accessible stablecoins. Coinbase is one of the most popular crypto exchanges and allows for buying, selling, and transferring crypto easily.
- BNB (BNB)
BNB is the native token of Binance, one of the most used platforms for buying, selling, and transferring crypto.
BNB can be used to pay fees on the Binance platform. These fees are often lower than if you were to pay them in another currency. It can also be used to buy other cryptos on the Binance platform.
- Binance Coin USD (BUSD)
Binance USD is another stablecoin. It was created by Binance and is backed 1:1 with the US dollar.
Like other stablecoins, it is used to stabilize cryptocurrencies. Because it is from Binance, it can be used to pay fees on the Binance platform and to buy other cryptos.
- XRP (XRP)
XRP is the native token of Ripple, a payments network for banks and financial institutions. Created on its own blockchain platform, called XRP Ledger, Ripple is used by banks and financial institutions as a way to settle transactions quickly and cheaply.
Because of its useful application for financial institutions, XRP has been adopted by some of the largest banks in the world.
- Cardano (ADA)
Cardano is a smart contract platform created in 2015 by Charles Hoskinson, one of the co-founders of Ethereum.
What makes it unique is that it uses a proof-of-stake consensus algorithm instead of proof-of-work. This makes it more energy efficient than other blockchain protocols. For context, Processing Bitcoin transactions consumes around 110 Terawatt Hours per year—which is equivalent to the annual energy draw of small countries such as Sweden. Cardano, on the other hand, is said to be 1.6 million times more energy-efficient compared to Bitcoin, as cited by Forbes.
Currently, they are working on integrating a new programming language called Plutus, which will make it easier to develop smart contracts.
- Solana (SOL)
Solana is a high-speed blockchain protocol that can process thousands of transactions per second. It was created in 2017 by Anatoly Yakovenko, the former Chief Technical Officer at Qualcomm.
Solana’s main selling point is its speed. It can process transactions much faster than other protocols like Ethereum. This makes it ideal for applications that need to process a lot of transactions quickly, such as video streaming or gaming.
- Dogecoin (DOGE)
Dogecoin started as a joke in 2013. It is based on the Doge meme, which features a Shiba Inu dog.
While it may have begun as a joke, it has since grown to become one of the more popular cryptocurrencies. This is largely due to its low price, which makes it accessible to everyone.
It’s a coin for the people and has been used for charitable causes, such as sending money to Kenya to build water wells.
- Polkadot (DOT)
Polkadot was created in 2016 and is a “next-generation” blockchain protocol. It is designed to be scalable, flexible, and interoperable.
What makes Polkadot unique is that it uses “parachains.” These are chains that can be used for specific applications. This allows for a more customizable and efficient use of resources.
Polkadot is also working on something called “Polkaswap,” which is a decentralized exchange. This will allow users to trade DOT, ETH, and other assets in a trustless manner.
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