The top 10 coins by market cap are not the most popular digital assets in the world, but they also have a value of $151.756 billion in a market currently worth $180 billion at the time of writing. Out of 2,126 cryptocurrencies listed by CoinMarketCap, the top 10 cryptocurrencies account for more than 84 percent of the market.
Top 10 coins by market cap
From Bitcoin to Cardano, the top 10 coins by market cap represent an assortment of different types of cryptocurrency tokens and asset classes. They range from platform and utility tokens to stablecoins. This article gives you a brief summary of the top 10 assets and the purpose of their existence.
Bitcoin is the grand-daddy of all digital assets. It is the first and most popular cryptocurrency on the planet, somehow, taking on an ambassadorial role of the entire market. Bitcoin was invented by the mysterious Satoshi Nakamoto and introduced to the world via a white paper.
But what is Bitcoin?
Bitcoin is a decentralized form of money not governed by any central authority such as a government of central bank. The digital money can be sent from one entity to another using a peer-to-peer (P2P) network without the need for third parties.
Transactions are recorded on the bitcoin network and secured using cryptography. A process known as mining is used to mint new digital coins. The miners are rewarded with Bitcoins for their work.
Only 21 million Bitcoin will ever be in circulation and they will only be completely mined in 2140. Bitcoin can only support up to 7 transactions per second (TPS).
The digital asset was initially designed to function as a currency but has rather become an investment asset.
Bitcoin began 2017 trading at $963 but by Dec. 17 the same year, the digital asset reached a peak of $19,758.
Unfortunately, the bull run did not last long and the prices were in freefall. Bitcoin has lost more than 70 percent of its peak value, prompting many to believe that that this was a bubble.
Ethereum is an open source operating platform based on blockchain technology used by developers to deploy decentralized applications (Dapps) that include smart contracts. Vitalik Buterin, a Russian-Canadian programmer and researcher proposed Ethereum in 2013. He argued that Bitcoin was limited in functionality and needed a scripting language. It has been described by some as “programmable Bitcoin.”
Bitcoin and Ethereum are almost the same except that the former is only capable of one particular application while the latter has several capabilities.
The Ethereum network is maintained and run by miners who collect their incentives in the form of Ether, the native token of the network. Ether can also be used for the payment of Ethereum Gas which runs the network.
Ethereum supports a limitless number of Dapps. The blockchain protocol has mainly been used as a platform for launching new blockchain projects via initial coin offerings. Entities can use Ethereum to create their own digital tokens.
One of Ethereum’s important uses is the creation of Decentralized Autonomous Organizations (DAOs).
Ripple represents both a blockchain platform and currency. The blockchain network is used to allow cheap and fast transactions. Ripple’s own cryptocurrency is known as XRP and is used to transfer value across the network.
The history of Ripple precedes that of Bitcoin. Ripple’s idea was conceived in 2004 by Ryan Fugger but it became what it is today in 2013 when Jed McCaleb brought investors to Ripple Labs.
Ripple protocol is described by Wikipedia as a ‘real-time gross settlement’ that can be used to send money globally without third-party intermediaries. The network claims to support secure transactions.
Ripple utilizes in-house technology known as RippleNet to connect banks and financial institutions. The company so far has partnerships with nearly 200 financial institutions including Santander, Union Credit, UBS, and more.
Perhaps one of the most surprising things about Ripple is that it does not have a blockchain, yet it is considered to be one of the most valuable blockchain companies in the world.
Ripple has also been criticized for being centralized. The startup plans to release 100 billion XRP tokens in circulation yet it retains half of it for its own benefit.
Bitcoin Cash (BCH) is a peer-to-peer cryptocurrency that came into existence in August 2017 after forking from Bitcoin. BCH, like several altcoins, was designed to address what some sections of the Bitcoin network considered to be flaws in the Bitcoin network and the cryptocurrency.
The idea of BCH came as a result of the escalating fees on the Bitcoin network made others to think that increasing the block size was the solution. Others favored introducing new improvements without increasing the block size because they considered Bitcoin to be more of an investment asset rather than a transactional currency.
However, a faction made up of Chinese miners, entrepreneurs, developers, Bitcoin activists, and investors supported a split that would increase the block size to eight megabytes.
Other than the block size, BCH is similar to Bitcoin as it has a block time of 10 minutes and a total supply of 21 million. Bitcoin Cash underwent a chaotic hard fork which resulted in two rival camps – Bitcoin ABC and Bitcoin SV.
EOS is both a blockchain and cryptocurrency. EOS is a decentralized operating system similar to Ethereum and can be used for building and deploying decentralized applications (Dapps). Others have called it Ethereum On Steroids as it claims to be more scalable than Ethereum.
EOS was created by CEO Brendan Blumer and CTO Dan Larimer, who previously created BitShares and Steem. Larimer is also credited for creating the Delegated Proof of Stake Algorithm (DPOS).
EOS.IO, a subsidiary of Block.one, raised more than $4 billion in a record initial coin offering that lasted nearly a year. Some of the EOS’ important features include scalability, flexibility, usability, governance, self-sufficiency, and parallel processing.
EOS was clouded in controversy in November last year when benchmarking firm Whiteblock published a report claiming the protocol is not a blockchain. EOS rejected the claims on several grounds and even said that Whiteblock is associated with ConsenSys, which in turn has ties to Ethereum – one of EOS’ main rivals.
Litecoin is an early Bitcoin fork created to address Bitcoin flaws. It was created by Charlie Lee, who previously worked for Google and Coinbase.
Unlike Bitcoin that has a block time of 10 minutes, Litecoin has a block time of 2.5 minutes, making it four times faster than Bitcoin. Litecoin has a hard cap of 84 million, four times larger than Bitcoin’s hard cap of 21 million.
Binance Coin (BNB) is a bespoke cryptocurrency issued by Binance exchange. The digital coin is an ERC-20 token running on the Ethereum network with a total supply of 200 million.
The Binance coin was created to fuel the exchange’s operations and other utilities such as paying for trading, listing, and exchange fees. The Binance Coin has been used recently by investors to participate in crypto projects through the Binance Launchpad.
Tether (TUSD) is a controversial stablecoin pegged to the USD and other fiat currencies. The cryptocurrency was issued by Tether Limited as a solution to the volatility associated with digital assets such as Bitcoin and Ethereum.
Tether’s history dates as far back as January 2012 when J.R. Willet published a white paper describing the possibility of developing new currencies using Bitcoin’s protocol. This idea led to the development of Mastercoin cryptocurrency. Mastercoin’s technology was later used as the foundation of the Tether cryptocurrency.
Despite being the leader in the stablecoin market, Tether is highly associated with scandals. The stablecoin is allegedly accused of being used by the cryptocurrency exchange Bitfinex to manipulate Bitcoin’s price, especially during the 2017 bull run.
Tether Limited initially claimed that every digital asset in circulation was backed by USD reserves. However, these claims have not been verified as Tether Limited has failed to prove the existence of fiat reserves.
In 2019, Tether updated its website claiming that Tether’s backing extends beyond fiat currencies and includes “traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”).”
Stellar is an open-source and decentralized payment protocol that supports cross-border payments between any currency pairs. The platform’s native token is known as Stellar Lumen (XLM).
Stellar was created by Jed McCaleb (Ripple’s co-founder and former CTO) and Joyce Kim. Stellar is Ripple’s competitor and some of its selling points include:
- Low transaction fees
- Specializes in remittances in developing economies
Stellar is the first decentralized protocol to receive a Shariah-compliance certificate in the digital payments sector.
Cardano is an open source blockchain platform that runs decentralized applications that can be used by individuals and organizations as large as governments. The Cardano platform’s native token is known as ADA.
The Cardano is different from other projects in that a lot of research was put into developing the protocol. Cardano was founded by a global team of academic researchers and engineers including Charles Hoskinson, one of Ethereum’s co-creators.
The blockchain protocol was designed to address issues such as scalability, interoperability, and sustainability.