cryptocurrency types

Cryptocurrencies come in many types, each serving different purposes beyond just being “digital money.” Here’s a breakdown of the main categories:

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1. Payment Cryptocurrencies

• Purpose: Designed mainly as digital cash for transactions.
• Examples:
  • Bitcoin (BTC) – the first and most widely used cryptocurrency.
  • Litecoin (LTC) – faster transactions, lower fees.
  • Bitcoin Cash (BCH) – built for quicker, cheaper payments.

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2. Stablecoins

• Purpose: Pegged to stable assets (like USD or gold) to reduce volatility.
• Examples:
  • USDT (Tether)
  • USDC (USD Coin)
  • DAI (algorithmic stablecoin)

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3. Utility Tokens

• Purpose: Used within a blockchain ecosystem for services (like gas fees, governance, or access to apps).
• Examples:
  • Ethereum (ETH) – used for smart contracts and gas fees.
  • BNB (Binance Coin) – for trading fee discounts and DeFi apps.
  • Chainlink (LINK) – powers decentralized oracle networks.

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4. Governance Tokens

• Purpose: Give holders voting rights in decentralized protocols.
• Examples:
  • Uniswap (UNI) – governs the Uniswap exchange.
  • Aave (AAVE) – governance in the lending platform.
  • Maker (MKR) – governs the DAI stablecoin system.

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5. Security Tokens

• Purpose: Represent ownership in real-world assets (like stocks, real estate). Regulated like securities.
• Examples:
  • tZERO – tokenized stocks.
  • Securitize tokens – real estate-backed tokens.

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6. Privacy Coins

• Purpose: Focus on private and untraceable transactions.
• Examples:
  • Monero (XMR)
  • Zcash (ZEC)
  • Dash (DASH)

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7. Meme Coins

• Purpose: Community-driven, often created as jokes but sometimes gain huge popularity.
• Examples:
  • Dogecoin (DOGE)
  • Shiba Inu (SHIB)
  • Pepe (PEPE)

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8. NFTs (Non-Fungible Tokens)

• Purpose: Unique digital assets representing art, music, collectibles, or in-game items.
• Examples:
  • Bored Ape Yacht Club (BAYC)
  • CryptoPunks
  • Decentraland (MANA) land parcels

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9. DeFi Tokens

• Purpose: Power decentralized finance apps like lending, borrowing, or yield farming.
• Examples:
  • Compound (COMP)
  • SushiSwap (SUSHI)
  • Curve DAO (CRV)

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👉 Do you want me to make a visual chart/table comparing these types (with uses, risks, and examples), so it’s easier to digest?