What is a cryptocurrency?

The term “cryptocurrency” is used to describe a wide range of digital assets that use cryptographic technologies to verify the legitimacy of transactions between participants and adhere to the rules set by the protocol of a particular cryptocurrency. For example, Bitcoin is designed in such a way that users cannot spend the same coins multiple times and cannot arbitrarily create new BTC coins.

How does cryptocurrency work?

Today, there are many designs of cryptocurrencies. The most popular cryptocurrency is bitcoin, which uses an energy-intensive process called “mining” to secure transactions and verify all activity on the bitcoin chain. Other cryptocurrencies do not use mining, but instead use staking or other methods to achieve consensus on the state of the ledger of transactions. Different cryptocurrency designs offer different trade-offs between decentralization, scalability, and security. Most cryptocurrencies can be divided into Proof-of-Work (mining) and Proof-of-Stake (staking). An example of a Proof-of-Work cryptocurrency is Bitcoin, and an example of a Proof-of-Stake cryptocurrency is Polkadot.

How are cryptocurrency prices calculated?

Cryptocurrency prices are usually calculated through the average of prices on different cryptocurrency exchanges. Most cryptocurrency exchanges operate 24/7 and allow users to exchange between different cryptocurrencies or between cryptocurrencies and fiat currencies such as the US dollar and the euro. Crypto data aggregators such as PTPRates collect data from many different exchanges to make sure they display the most accurate cryptocurrency prices. Top cryptocurrencies like Bitcoin and Ethereum tend to have similar prices across exchanges, while less popular cryptocurrencies known as altcoins with low liquidity can have big discrepancies.

What is the best cryptocurrency?

There are countless potential use cases for cryptocurrencies – they can be used as an alternative to fiat currency for everyday transactions, speculative trading, use in decentralized applications, etc. The best cryptocurrency for you will depend on what you want to do with it.

What is the market capitalization of the cryptocurrency?

Market capitalization or market capitalization is one of the metrics we use to compare different cryptocurrencies with each other. At PTPRates, we use market capitalization as our primary metric for ranking cryptocurrencies. We also calculate the total cryptocurrency market capitalization to estimate the size of the entire cryptocurrency market.

How can a cryptocurrency increase its market capitalization?

Cryptocurrency market capitalization increases in two different scenarios. The first and simplest scenario is a price increase: if the unit price of a cryptocurrency increases, so does its market capitalization. The second scenario is an increase in circulating supply. If new coins enter circulation, the market capitalization of the cryptocurrency will increase, although there is a significant caveat here. In an efficient market, an increase in supply is likely to have a negative impact on the unit price.

What are the top 10 cryptocurrencies?

The top 10 cryptocurrencies are the top 10 cryptocurrencies by market cap. Due to the price volatility of cryptocurrencies, the top 10 changes quite often. However, it is worth noting that Bitcoin and Ethereum have been in first and second place for a long time, respectively.

What is the difference between a token and a coin?

A coin is a cryptocurrency that has its own blockchain, where the coin is needed to pay transaction fees and perform basic operations. BTC (Bitcoin) and ETH (Ethereum) are examples of coins. Tokens are crypto assets built on top of other blockchains. An example of a token is USDC, which exists on the Ethereum blockchain. Some tokens, such as USDT, have been issued on multiple blockchains.