There are currently more than 6,000 different coins and tokens in the global cryptocurrency industry, but when it comes to cryptocurrency, we have to mention one currency [Bitcoin]. Why is there Bitcoin? If you remember 2008, you may remember that the year was dominated by the co

There are currently more than 6,000 different coins and tokens in global cryptocurrency, but when it comes to cryptocurrency, we have to mention one currency [Bitcoin]. Why is there Bitcoin?

If you have memories of 2008, you may remember that the protagonist of that year was the collapse of the financial system. The crisis has driven global trust in banks, reserve banks and governments to an all-time low, while the world wonders how to improve it?

There are two major limitations when using currency:

The first is the issue of trust: in a world where we conduct transactions every day with people we will never meet again, who can ensure that a transaction between two strangers will be carried out?

The second is a logistics issue: what infrastructure can we use to actually transfer value?

These two issues determine that we have to rely on banks. As trusted middlemen, they oversee the process and ensure both sides of every transaction perform their actions, and keep track of the global ledger as funds move, ensuring the value of our funds remains intact!

In the turmoil after the financial crisis, Bitcoin emerged

and demonstrated its core vision: to allow individuals to transfer value between each other without resorting to centralized entities. It's a first step, a revolution, a first step on a much bigger journey, but here's the point: At its simplest, cryptocurrency is a way to transfer value

The technology has since made major breakthroughs

Although Bitcoin is the OG of cryptocurrency The big one, but by no means the only cryptocurrency. In fact, the cryptocurrency market currently has more than 6,000 digital currencies , and this number is constantly increasing.

Cryptocurrencies are generally divided into 3 categories:

• Bitcoin
• Altcoins
• Crypto tokens

Bitcoin

There is also a self-explanatory category. If you haven't figured it out yet, please note that this video is dedicated to Bitcoin. Simply put, the purpose of Bitcoin is to purchase goods and services and store value. Its block chain rules are built on the workload proof protocol.

alternative currency

means very straightforwardly, it refers to " the alternative currency ", which is all cryptocurrencies except Bitcoin. There are currently over a thousand altcoins in existence. Specifically, it can be subdivided into two subsets.

• Bitcoin derivatives: They are alternative versions of Bitcoin, with only minor changes compared to the original. Their goal is usually to solve any limitations that Bitcoin faces. One of the most successful cases is Litecoin which aims to increase transaction speed.
• Native coins: These coins are significantly different from Bitcoin in terms of rules, protocols, and goals. The rules of different blockchains are ever-changing, and they all face the choice between the two verification protocols of Proof of Work (PoW) and Proof of Stake (PoS). Well-known native altcoins that use the PoS protocol include Tron or TEZOS (WTZ).

Crypto Tokens

This category of coins is very unique compared to the other two groups in that they do not have their own blockchain. Instead, they only exist on other blockchains.etc! What's the meaning? Didn’t we just say “one blockchain = one cryptocurrency”? right. But we also warned you: rules and exceptions. There are several blockchains that allow tokens to exist on their own networks. The most famous one is Ethereum.