In this article, we discuss the 5 biggest digital currencies in the world. If you want to read about some more digital cryptocurrencies, go directly to 10 Biggest Digital Currencies in the World.
5. Binance Coin
Market Capitalization as of August 12: $51 billion
Binance Coin is the native coin used by the Binance cryptocurrency exchange. By virtue of the exchange being one of the largest in the world, both in terms of transactions and value, the coin has become one of the biggest digital currencies in the world. The coin was first used as a utility token for discounted trading fees on the platform. However, it is now also used for a host of other uses, including payments for travel, entertainment, and processing fees. The coin was initially based on the Ethereum network.
Binance Coin was launched in 2017 with 200 million tokens. Angel investors were offered nearly 20 million of these tokens. 80 million went to the founding team of the coin. The rest were given to various others through the initial coin offering. Binance used the funds gathered from the initial coin offering for branding and marketing purposes. It also used the funds for development work related to the exchange itself. The exchange, after every three months, uses one-fifth of profits to burn and destroy Binance coins held in the treasury.
4. USD Coin
Market Capitalization as of August 12: $54 billion
USD Coin is a stable-coin whose value is tied to the US dollar. Besides Tether, it is one of the most popular stable-coins on the market. USD Coin is managed by a consortium named Centre, which includes members from popular crypto exchange Coinbase. The management team of the coin claims that each individual USD Coin is backed by a reserve dollar or other approved, but otherwise unspecified, investments. The management also uses the term “fully reserved assets” to describe these investments.
USD Coin was launched in 2018. Payment giants like Visa allow the use of the coin for crypto transactions on their network. USD Coin uses the same network as Ethereum. USD Coins are tokenized when a user sends US dollars to the bank account of a coin issuer. The issuer then makes a smart contract and issues the same number of USD Coins as the dollars. These coins are then sent to the user. The dollars are held in reserve against these coins. For converting these coins back into dollars, this process is reversed.
3. Tether
Market Capitalization as of August 12: $66 billion
Tether is the most popular stable-coin on the market. It is also one of the largest digital currencies in the world, behind only Bitcoin and Ethereum. Stable-coins are digital coins whose value is tied to some real-world asset in order to protect them from the price volatility associated with other coins. The value of Tether is tied to the US dollar. Only about a third of the market cap of the coin is backed by cash, fiduciary deposits, reverse repo notes, and government bonds. The rest is backed by a short-term money market instrument called a commercial paper.
Tether is mostly used by crypto traders to leverage trades without the use of fiat currencies. This is generally one of the most popular uses of stablecoins in the cryptoverse. This usage makes the coin the most liquid currency on the market, ahead of even popular coins like Bitcoin. Tether coins are usually issued by Tether Limited, an entity controlled by a Hong Kong-based cryptocurrency exchange named Bitfinex. The price of Tether is also used as a health indicator of the overall crypto marketplace.
2. Ethereum
Market Capitalization as of August 12: $204 billion
Ethereum is the second most popular coin. It was launched in 2015 by programmer Vitalik Buterin, a Canadian national with Russian origins. The Ethereum network is faster than the Bitcoin network and also focuses more on privacy and security concerns. The Ethereum network can host decentralized finance applications for usages such as brokerage, banking, and lending. The Ethereum network has also become popular as a way to create and sell non-fungible tokens, a unique digital creation representing ownership of an asset.
Ethereum has been transitioning to a proof-of-stake consensus mechanism in the past few months as it seeks to become more environmentally friendly. It also aims to become even faster, increasing transaction throughput by a method called sharding. The development work on the new Ethereum network is expected to be complete by 2023. The Ethereum network hosts user accounts and smart contracts, both of which can transact in the native Ether coin and are identified in the blockchain through the account address.
1. Bitcoin
Market Capitalization as of August 12: $437 billion
Bitcoin is the most popular and biggest cryptocurrency on the market. It was launched in 2008 by Satoshi Nakamoto and started trading in 2009. The coin can be traded through the Bitcoin network where transactions are verified through network nodes that are protected by layers of cryptography. Bitcoin has become synonymous with digital currencies in general, although it is only one of many types of digital coins. The Bitcoin network has no central authority and no central data storage system.
Bitcoin has also been adopted as legal tender in El Salvador and the Central African Republic. Ukraine is using the coin to source donations from around the world as it fights off a Russian invasion. Bitcoin is widely hailed as one of the best-performing assets of the decade, although this position has weakened in the wake of recession fears in the US that have resulted in a massive crash of the crypto market in general. The usage of the coin as a wealth storage device akin to gold has been increasing.
You can also take a peek at 10 Stocks Reddit’s WallStreetBets is Buying in July 2021 and Top Robinhood Stocks Popular on Reddit.
