11 Types of Cryptocurrency and How They Work

Understanding all the different types of cryptocurrencies can be quite the journey. If your goal is to get a good handle on the basics of cryptocurrency without necessarily going down a rabbit hole of information that you don’t need or use, we’re here to help you achieve this.

This guide will explain which are the most popular cryptocurrencies to use at US gambling sites, what you need to know about their history, safety and volatility, as well as the main differences between them.

Hop on, and by the time we reach the end you’ll be dropping terms like ‘algorithmic stablecoins’ like nobody’s business.

How many cryptocurrencies are there?

If you’re after a shortcut, the answer to this is too many to count. There are so many types of cryptocurrencies, in fact, that so far, no-one has created an exhaustive classification of every single one.

The main reason for this is that a new altcoin is created pretty much every week. Thus, no list can ever be truly complete, unless someone’s brave enough to take it upon themselves to keep updating it regularly. Coingecko did compile a list of 50 main categories, but these overlap with one another and change frequently, making it difficult to identify the most popular cryptocurrencies within each category at a glance.

The best we can do is offer an approximation of the number of cryptocurrencies that are in circulation. As of June 2023, Forbes reported just under 26,000 different types of cryptocurrency being publicly traded.

This amount will have increased considerably since then, with new crypto coins and tokens being created almost daily. According to coinmarketcap.com, the global market cap for cryptocurrency at the time of writing stands at around $1.56 trillion, but every day this number increases by about 0.56%. You do the maths on that!

Why are there so many different cryptocurrencies?

Why not? The most obvious reason is that there are so many different types of crypto currencies because there is no limit on who can create their own coin or even blockchain. All you need is the knowledge, which is readily available online, and a bit of patience, and you’re set to go.

One of the biggest strengths of crypto is that it is not subject to the same controlling laws as fiat currencies. You can’t wake up and decide to mint dollars, but you can certainly do that with crypto.

Now, this may be one of the things we love most about the crypto space, but it’s also one of the elements that may lead to things that are great and others that are not so great. Get-rich-quick attempts via token or crypto dumps (aka ‘rug-pull scams’ not unheard of, but this is why we recommend putting new popular cryptocurrencies under the microscope before deciding to invest in something that no one’s ever heard of.

If you need a safety indication of whether you should bother with a new type of cryptocurrency or not, take a look at our recommended crypto casinos. These only tend to accept tried-and-tested digital currencies that have already established a successful track record. If you really want to play it safe, limiting yourself to these is a good strategy.

Is Bitcoin different from other cryptocurrencies?

Well, yes and no. You’ll often find us putting the terms crypto and Bitcoin casinos together, which implies that Bitcoin and crypto are two interchangeable terms. Although for practical purposes, this is not untrue, if we’re going to be technical about things ‘Bitcoin’ and ‘crypto’ do have different meanings.

Bitcoin is the very first cryptocurrency that was ever invented. It dates back to 2009 and is attributed to have been invented by someone (or a group of someones) under the pseudonym Satoshi Nakamoto.

Without Bitcoin, we wouldn’t have cryptocurrency as we know it today. It was invented at a time when no-one knew much about what digital currency could achieve, and early adopters had to fight significant skepticism, not to mention the entire system of traditional currencies.

It took another two years before another significant cryptocurrency was launched to popular acceptance. This was Litecoin, popularly described by its creator Charlie Lee as “silver to Bitcoin’s gold”. Since then we’ve seen the advent of hundreds of other crypto coins.

What we’re trying to get at is that Bitcoin is only one of many other cryptocurrencies. The fact that it was the first one to hit the market means that it’s also the strongest and the most popular, although it’s also one of the most volatile of all types of cryptocurrency. To date it holds the largest market capitalization, almost $850 million and counting, and it’s present without any exception at any crypto casino you sign up to.

10 biggest cryptocurrencies by market cap

Let’s cut to the chase. Chances are that you don’t really want to waste time learning about every single micro crypto that bursts on the market like a shooting star only to extinguish itself with a whimper a few months later. We promised a list of the most popular cryptocurrency and that’s exactly what we will deliver.

Below, you’ll find a list of the 10 biggest cryptocurrencies, sorted by market cap.

Onto the top cryptocurrencies categorized by market cap.

Bitcoin

When a crypto is referred to as ‘digital gold’ you know you’re onto a good thing. We’ve already established that Bitcoin was the OG, with the domain name bitcoin.org registered in August 2008 and the whitepaper titled Bitcoin: A Peer-to-Peer Electronic Cash System published in October of the same year.

On January 3, 2009, the currency came officially into existence with the first Bitcoin software and the mining of the genesis block – dubbed block number 0 – which contained a reward of 50 bitcoins.

In 2010, control of the source code repository and network alert key was passed on to Gavin Andresen, with the first real-world transaction famously taking place on May 22, of the same year when programmer Laszlo Hanyecz paid 10,000 bitcoins for two pizzas. To date, the event is part of global pop culture and is celebrated as Bitcoin Pizza Day.

A year later, it reached parity with the US dollar, marking a significant milestone in its acceptance as a form of currency. Since then, the cryptocurrency has experienced dramatic fluctuations in value, with its price reaching an all-time high of nearly $65,000 in April 2021 before undergoing corrections.

The underlying blockchain technology has inspired the creation of over a thousand other cryptocurrencies and a multitude of blockchain-based innovations. Despite facing increasing regulatory scrutiny and criticisms due to its environmental impact, Bitcoin has grown into a major financial asset.

Ethereum

The crowdfunding for Ethereum was completed in 2014, with the network going live on July 30, 2015. There were 72 million coins pre-mined on a decentralized platform that allows for smart contracts and decentralized applications (dApps) to be built and operated without any downtime and with little to no possibilities of fraud, control, or interference.

The man behind it was programmer Vitalik Buterin, credited with creating the first versatile blockchain that can execute complex contracts and programs. This flexibility – which Bitcoin did not possess – turned it into the foundation for a vast majority of blockchain-based projects.

Since its first iteration, Ethereum has undergone several upgrades, notably the transition from a proof-of-work to a proof-of-stake consensus mechanism with the Ethereum 2.0 update. This was done with the goal of improving scalability and security. Moreover, it pacified eco-warriors by significantly reducing its energy consumption.

Ethereum’s ecosystem continued to grow over the years, cementing its position as one of the most popular cryptocurrencies. It gave rise to scores of decentralized finance (DeFi) applications, non-fungible tokens (NFTs), and other decentralized platforms that are built on its blockchain, contributing to a surge in ETH’s value and a broader adoption of blockchain technology.

Tether

If you’re checking whether a casino accepts Tether, look for the currency symbol USDT. Tether was the first stablecoin to be released, thus dubbed because its value is kept more stable than that of other cryptos due to it being backed by a fiat currency, in this case, the US dollar.

Tether was launched in 2014 with the specific goal of combining the freedom and flexibility of other types of cryptocurrency together with the stable value of traditional currencies. Its creators claim that each USDT in circulation is backed one-to-one by US dollars held in reserves, although this claim has been subject to controversy and scrutiny.

Tether operates on several blockchains, including Bitcoin, Ethereum, EOS, Tron, Algorand, and others, which adds to its flexibility and appeal as it allows users to carry out transactions across different crypto ecosystems.

BNB

BNB is the original Binance Coin, launched in July 2017 via an Initial Coin Offering (ICO) by the Binance exchange. Founded by Changpeng Zhao (CZ), it was initially created as an ERC-20 token on the Ethereum blockchain to offer an integrated utility token for the Binance platform. This would allow users to pay for trading fees at a discounted rate and participate in token sales hosted on Binance’s Launchpad platform.

Since then, the primary use of BNB has expanded beyond the Binance exchange to include a wide array of applications, such as payment for transaction fees on Binance’s decentralized exchange (DEX), participation in token sales, and even as a means of payment for goods and services – crypto casinos being one such example.

In April 2019 BNB transitioned from the Ethereum network to Binance’s own blockchain, Binance Chain, cementing its position as one of the most popular cryptocurrencies while opening the door to a wide range of decentralized financial services.

Solana

Solana Labs launched Solana, a blockchain platform designed for decentralized applications (dApps) and crypto-currencies, in March 2020 with a vision to create a blockchain that could support high throughput and low transaction costs without sacrificing decentralization.

The native currency is called SOL and it’s used to pay for transaction fees and for staking as part of the network’s security mechanism. In past months the Solana ecosystem has expanded considerably, leading to increased takeup and the hosting of a wide variety of applications ranging from DeFi apps to NFTs, gaming, and beyond. This diversity has attracted a significant amount of developer interest and investment, propelling SOL into the ranks of the top cryptocurrencies by market capitalization.

Critics argue that the high performance comes at the cost of centralization, as the hardware requirements for running a Solana validator are significantly higher than those for other networks, potentially limiting the number of users who can participate in network validation. That said, its standing as one of the most popular cryptocurrencies looks said to stay unchanged.

USDC

USD Coin (USDC) is another stablecoin pegged to the US dollar. Launched in September 2018, it was created through a collaboration between Circle, a global financial technology firm, and the cryptocurrency exchange Coinbase.

USDC is designed to combine the open, global nature of cryptocurrencies with the stable value of the US dollar, maintaining a 1:1 value ratio with the USD. Like Tether, each USDC is reportedly backed by a Dollar held in reserve or by other approved investments. The reserves are subject to regular auditing so as to ensure compliance and trustworthiness.

The introduction of USDC was another step in creating types of cryptocurrency that are more stable, thus increasing its attraction for transactions, trading, and hedging against the price movements of other cryptocurrencies. USDC operates primarily on the Ethereum blockchain as an ERC-20 token, but has also expanded to other blockchains, including Algorand, Solana, and Stellar, further broadening its accessibility.

XRP

XRP – which you’ll probably recognize by its ticker symbol – has been around since 2012 but was originally created to facilitate fast and cost-effective international money transfers. It was created by Ripple Labs Inc., a company specializing in the development and integration of payment and exchange networks, with the idea of offering a bridge currency for smooth currency exchange and remittance between different fiat currencies on the Ripple network.

Unlike many other popular cryptocurrencies that use blockchain mining, XRP transactions are powered by a consensus protocol to validate account balances and transactions. This secures the system and prevents double-spending while allowing for faster transaction processing and scalability. XRP transactions typically take four to five seconds.

XRP’s ledger also allows the issue and transfer of other assets, so it’s a very versatile platform for various financial services. One of the unique aspects of XRP is its fixed supply of 100 billion units, which were pre-mined at inception. Ripple Labs holds a significant portion of these, which has led to concerns regarding centralization and control. However, the company regularly releases XRP from an escrow account to manage supply and support market liquidity.

Cardano

Co-founded by one of the co-founders (Charles Hoskinson) of Ethereum, Cardano was launched in September 2017 by the blockchain development firm IOHK. It differs from other types of cryptocurrency because it’s designed with a research-based approach, committing to peer-reviewed scientific research as the basis for its development, ensuring its technology is both secure and scalable.

Cardano introduced a novel PoS consensus mechanism called Ouroboros, which is designed to be more energy-efficient than the proof-of-work (PoW) systems used by Bitcoin and other cryptocurrencies. This mechanism reduces energy consumption and addresses common challenges of security and scalability faced by earlier blockchain systems.

ADA is the native cryptocurrency of the Cardano network and, fun fact, it was named after Ada Lovelace, a 19th-century mathematician often regarded as the first computer programmer. ADA is used for staking, transaction fees, and as a means for users to participate in the governance of the Cardano platform, fulfilling its creators’ commitment to a decentralized and democratic governance model.

Avalanche

Scalability, security and decentralization are often referred to as the Achilles’ heel of many types of cryptocurrencies. Avalanche (AVAX) has been trying to solve them all since September 2020. This decentralized, open-source blockchain platform operates with a consensus mechanism that’s designed to offer high throughput, rapid transactions and low fees, making it a formidable competitor to older blockchain platforms like Ethereum.

The platform comprises three primary blockchains: the Exchange Chain (X-Chain), the Platform Chain (P-Chain), and the Contract Chain (C-Chain). This multi-chain structure allows Avalanche to handle various tasks concurrently in an efficient manner. The platform is a highly customizable platform, catering to a wide array of applications ranging from DeFi projects to enterprise blockchain solutions. The platform’s ability to create custom blockchains (subnets) offers a level of customization and scalability that is particularly appealing for enterprise use cases and specific project needs.

Avalanche’s consensus mechanism allows for transactions to be finalized rapidly, often in under a second. With thousands of transactions per second, it significantly outpaces many other types of cryptocurrencies.

Dogecoin

The Dogecoin is another oldie, having started life in December 2013, albeit as a joke. The crypto coin owes its origins to the Shiba Inu dog from the Doge meme, with software engineers Billy Markus and Jackson Palmer not really expecting it to go anywhere,

Against all odds, it soon attracted a cult following that didn’t take too long to grow into an actual active community. Based on the Litecoin protocol and using A Scrypt algorithm, it was initially introduced as a lighthearted alternative to Bitcoin with the idea of reaching a broader market.

Unlike many other types of cryptocurrencies with a capped supply, Dogecoin has an intentionally abundant supply to encourage spending rather than hoarding. It has been used primarily as a tipping system on Reddit and Twitter to reward the creation or sharing of quality content. It has also featured strongly in various fundraising events in keeping with its community-driven branding.

The cryptocurrency gained a significant increase in value during 2021, partly due to an endorsement from Elon Musk, who described it as the “people’s crypto” in a Tweet. Suddenly, the meme coin stopped being an internet joke and became a widely recognized currency being used in the mainstream.

Tron

Founded by Justin Sun in 2017, Tron uses a delegated proof-of-stake (DPoS) consensus mechanism which allows TRX token holders to vote for a small number of delegates who are empowered to validate transactions and produce blocks. The system is designed to offer a more energy-efficient alternative to PoW systems and ensures faster transaction speeds and scalability. The mechanism is also aimed to encourage community involvement and governance participation by TRX holders.

In 2018 Tron acquired BitTorrent, a popular peer-to-peer file-sharing platform. This introduced blockchain technology directly integrated into BitTorrent, creating new token-based economies around content sharing and storage while incentivizing users to share files and participate in the network.

The Tron Foundation, based in Singapore, oversees the development of the Tron blockchain, which is divided into three layers. These are the core layer, which handles protocol and consensus; the application layer, where developers can create and deploy dApps; and the storage layer, which provides distributed storage for the system.

Most popular cryptocurrencies to gamble with

Cryptocurrency	Symbol	Founded	Find out more
Bitcoin	BTC	2009	Bitcoin Casinos
Bitcoin Cash	BCH	2017	Bitcoin Cash Casinos
Ethereum	ETH	2013	Ethereum Casinos
Tether	USDT	2014	Tether Casinos
BNB	BNB	2017	BNB Casinos
Solana	SOL	2020	Solana Casinos
Litecoin	LTC	2011	Litecoin Casinos
XRP	XRP	2012	XRP Casinos
Cardano	ADA	2017	Cardano Casinos
Monero	XMR	2014	Monero Casinos
Dogecoin	DOGE	2013	Dogecoin Casinos

Explained: all types of cryptocurrency by category

Now that we’ve taken an in-depth look at the most popular cryptocurrencies it’s time to understand how these are classified. Below you’ll find a breakdown of all the different types of crypto, together with examples. In some cases you’ll notice a cross-over, with one crypto fitting in more than one category. For example, Tether is both a Payment Cryptocurrency and a Stablecoin.

Crypto coins vs tokens

Cryptocurrencies can be classified into coins and tokens. Coins like Bitcoin operate on their own blockchain and primarily serve as digital money. Tokens are built on existing blockchains and serve other purposes beyond transactions, such as representing physical items or access rights.

Utility Tokens

Utility tokens are digital assets designed for specific uses within a blockchain ecosystem. They grant holders access to services, features, or benefits in a platform, such as voting rights, discounts, or access to decentralized applications via DeFi tokens.

Payment Cryptocurrencies

These digital currencies work like traditional money, allowing you to buy goods and services or to exchange them for other currencies. Bitcoin is a prime example.

Stablecoins

This type of cryptocurrency is designed to maintain a stable value by pegging to a reserve asset, such as fiat money or gold, although there are also crypto-collateralized stablecoins. Tether is one of the more popular stablecoins, guaranteed by the US Dollar.

Exchange Tokens

These types of cryptocurrencies are issued by digital asset trading platforms and are used within the ecosystem of the issuing exchange. Holders benefit from reduced trading fees, voting rights on platform decisions, and participation in special events or token sales. Binance Coin (BNB) is a strong example.

Meme Coins

These are inspired by internet memes or jokes. Despite their light-hearted origins, some meme coins, like Dogecoin and Shiba Inu, have achieved significant market capitalization. These tokens typically suffer from high volatility and are susceptible to social media influence, rather than utility.

GameFi Crypto

GameFi crypto refers to the blend of gaming and decentralized finance (DeFi) within blockchain-based games. GameFi projects often use non-fungible tokens (NFTs) to create an economy where players can earn, buy, and sell digital assets within the game, embodying the play-to-earn model.

Bank Digital Currencies (CBDC)

These are digital forms of fiat money issued and regulated by a country’s central bank, designed to provide a secure and efficient means of payment. Unlike decentralized cryptocurrencies, CBDCs are centralized, offering a digital alternative to traditional banknotes while maintaining the legal tender status and stability of conventional currencies.

Security Tokens

Security tokens represent ownership of real-world assets, such as stocks, bonds, real estate, or venture capital funds. These are subject to regulatory laws, but they leverage blockchain technology to provide increased transparency and efficiency.

Wrapped Tokens

These popular cryptocurrencies are pegged to the value of another asset, enabling the original asset to be used on blockchain networks other than its own. They provide interoperability between different blockchains, allowing for assets like Bitcoin to be used in decentralized finance (DeFi) applications like Ethereum. Wrapped tokens are secured by smart contracts or through custodial arrangements, facilitating broader asset transactions across the crypto space.

Privacy Tokens

These types of cryptocurrencies are designed to offer enhanced anonymity and privacy for transactions. Unlike traditional cryptocurrencies, which have transparent blockchains, privacy tokens obscure details such as the sender, recipient, and amount transferred, using advanced cryptographic techniques. Zcash and Monero are two examples.

Non-Fungible Tokens

Non-fungible tokens (NFTs) are digital assets that represent ownership or proof of authenticity of unique items or content on a blockchain. These are commonly associated with digital art, collectibles, and virtual real estate, although they’ve also expanded into music, gaming, and other digital content. NFTs enable creators to monetize their work directly and provide collectors with a verifiable way to own digital originals.

 

 

Frequently asked questions