Cryptocurrency ranking – list of the best cryptocurrencies
The purpose of this text is not only to present a ranking of the most popular cryptocurrencies. We want to give you much more. Therefore, we will try to explain to you the issues related to rankings. After reading this article, you can distinguish tokens from coins. You will also be able to calculate market capitalization correctly correctly. We will present the most popular categories in which blockchain technology is developing. And finally, we will introduce you to some popular projects worth following. Enjoy reading!
Cryptocurrency rankings are created relatively often. This is because recipients like this type of combination very much. It is a transparent form that allows you to obtain information quickly. If the ranking is prepared appropriately, according to specific assumptions, you can gain much from it. The problem arises if the purpose of such a list is solely to attract readers using frequently searched phrases. Therefore, if you often read the rankings, it is worth building the foundations that will allow you to understand this topic better It’s time for another lesson.
- How many cryptocurrencies are there?
- What are the types of cryptocurrencies?
- How are cryptocurrencies different?
- What influences the popularity of cryptocurrency?
- Most popular assets – list of the best cryptocurrencies
If you are interested in cryptocurrencies, you have probably encountered various rankings. They are created by websites dealing with blockchain issues. Their goal is to present several or even several dozen projects that stand out in a specific way. However, each ranking must be prepared according to some criterion. It is based on particular features that projects are ranked. One cryptocurrency list may look completely different from another; it all depends on what the author took into account.
The most frequently adopted criterion is market capitalization. This is the total value of a given project. How is it calculated? It’s pretty simple. To calculate market capitalization, we need to have two variables. The first is the total amount of cryptocurrency units in circulation. Both those funds that are on the market and those outside the market are taken into account. The second variable is the exchange rate. Then, multiply these two values.
Market capitalization = Number of coins issued x Current rate
The MobilneKantoryCoin (MKCN) cryptocurrency invented for this example was issued in 1,000 units. Its current price is $0.10.
Let’s plug the values into the formula: Calculations: 1,000 x $0.10 = $100
In this specific case, the market capitalization of the project created for the MobilneKantoryCoin (MKCN) example is $100.
Please note that the Number of units issued and the price are variable. This means that cryptocurrency rankingsbased on market capitalization are correct at the time of creation. Due to the dynamics of the cryptocurrency market, this may change quickly.
Remember that some cryptocurrencies have a limited supply. The prime example is Bitcoin. Only 21,000,000 BTC will be in circulation. Conversely, there are inflation cryptocurrencies, i.e., those whose supply is not limited.
The second significant factor that is considered in various types of rankings is volume. This is the amount of turnover generated in a given time. The daily volume is often assumed, i.e., the volume of turnover that occurred in the last 24 hours.
However, not every cryptocurrency ranking is based on capitalization and volume. Some go a step further and try to compare cryptocurrencies to other characteristics. There are also often lists of cryptocurrencies from a specific industry segment, e.g., DeFi (this concept will be explained later in the guide, so we encourage you to continue reading). After all, there are so many cryptocurrencies that collecting them into one list may be impossible. But are you sure?
How many cryptocurrencies are there?
In the past, the situation was much more straightforward. You said cryptocurrencies; you thought Bitcoin. Nowadays, it is a bit more complicated. Of course, BTC still holds the title of the most popular cryptocurrency. Bitcoin also ranks first in the rankings based on market capitalization.
However, the situation is changing dynamically. New projects that try to attract users and build a position in the market appear. For the most part, they don’t try to compete with Bitcoin. They use the paths he paved but deliver utterly different values. They are a response to problems that have arisen with the development of blockchain technology.
There are already thousands of cryptocurrencies, and their number will continue to grow. It seems evident that with so many different projects, only some will be successful. Some will be abandoned, and others will be just an attempt to extort money from users. The Number of starting projects will increase as the industry develops.
If you are a beginner learning about the possibilities of blockchain technology, you should focus on understanding cryptocurrencies and the most popular projects. Investing is inherently associated with some risk. Of course, it is entirely up to you which project, in your opinion, has enough potential to invest in it. The top 100 projects in terms of market capitalization provide enough space for learning. However, it is worth getting to know the characteristics of specific projects a little better.
What are the types of cryptocurrencies?
Words such as tokens, coins, and cryptocurrencies are often used interchangeably. Unfortunately, this is misleading and incorrect. First, let’s introduce some order here. The term “cryptocurrency” itself is used in a comprehensive sense. We use this word to describe projects based on blockchain technology but also virtual forms of payment. This general form applies to practically all projects in the web3 industry.
A bigger problem occurs when “tokens” and “coins” interchangeably. Of these two options, the former is probably the more popular term. Tokens are projects that do not have their blockchain network. They use existing solutions. Coins (or, using the Polish nomenclature, coins) are native cryptocurrencies of specific networks.
Tokens can play various roles. It is on this basis that they are then divided. Therefore, we distinguish tokens:
Governance tokens allow holders to express their opinions on the future direction of a given project. When there is a need to resolve an issue, the authors ask token holders to take part in the vote. Through democratic elections, the community expresses its preferences.
As their name suggests, utility tokens have a purpose; they were designed for a specific purpose. Most often, of course, they take the form of payment. However, this does not mean that they always serve only this purpose. It all depends on the assumptions of a given project. With their help, users can increase data transfer speeds or obtain exclusive items.
Security tokens are specific investment assets. They are issued on the blockchain but may represent actual companies or companies. In short, they work the same way as stocks and bonds. This is a transfer of an already popular solution to the web3 sphere. Tokens issued as security are treated similarly to legal securities. This means that their goal is to protect investors from fraud.
NFT, or Non-Fungible Tokens, has been a very loud topic lately. Comparing them to digital certificates of authenticity has already become popular. Their essential feature is that they are immutable (or otherwise non-interchangeable). You cannot interfere with their content. They can be assigned to virtual as well as physical goods. Currently, this technology is most often used in conjunction with digital images. However, this is only the initial phase of development. Perhaps it will be possible to manage, for example, real estate using NFT in a later stage.
Rewards tokens are a form of motivating users. They can be awarded in the same way as ratings and opinions in mobile applications. They are a form of expression of appreciation and can be awarded to community members who actively participate in the platform’s development.
You already know what tokens are and what they are used for. In the case of coins, the matter is a bit easier. They primarily function as payments. They are used to pay transaction fees and cover other costs associated with using the platform.
How are cryptocurrencies different?
Cryptocurrency rankings can be created in various categories. In general, blockchain-based projects differ significantly from each other. However, some of them respond to the exact needs and may work similarly or solve the same problem. It is on this basis that various project categories are created.
Cryptocurrencies can differ in many elements. In this article, we will focus on the primary difference that is very important from the perspective of creating cryptocurrency rankings. It’s about their purpose. Explore some of the different categories in which cryptocurrencies are developing.
DeFi is an abbreviation for Decentralized Finance. Projects of this type focus on servicing operations that have so far been carried out with the help of banks. We are talking about payments, loans, trading in financial instruments, deposits, and earning interest. Typically, users can leverage the capabilities of DeFi using dApps, i.e., decentralized applications.
GameFi is a concept that focuses on the development of blockchain-based games. This is a transfer of gaming to a new platform. GameFi allows you to introduce Play-to-Earn options to your games. Players can earn money through their activity. Projects of this type are gradually becoming more and more popular. This is an exciting segment of this industry. Additionally, by transferring games to the blockchain, it is possible to create an internal market based, for example, on NFTs.
IoT, or the Internet of Thoughts, is a digital network. IoT projects try to connect the virtual sphere with the physical world. This means that we can use the network to issue commands to a device located at a considerable distance. Additionally, these types of devices can often communicate with each other. These projects want to make our homes and cities more “smart.”
DEX are decentralized exchanges. They enable quick and convenient transactions. In most cases, trade occurs between two entities that can exchange cryptocurrencies with virtually no interference from third parties. Trading takes place between wallets. Currently, the biggest challenge facing projects of this type is adapting the technology to the needs of less technical users.
Metaverse is a category that has no exact definition. It is a broadly understood virtual space. To some extent, it connects with the real world. Projects of this type try to take advantage of the opportunities opened up by augmented reality (AR) and virtual reality (VR). This technology offers many possibilities, from social media platforms to grocery stores. These solutions have many supporters and opponents, strengthening the interest in such projects.
Stablecoins are, of course, projects that represent assets with a stable price. The most popular projects focus on fiat currencies (mainly USD). However, stablecoins can also represent the value of other assets, such as precious metals. So, there are projects that reflect the gold or silver exchange rate. They allow investors to allocate capital safely during periods of intense market fluctuations.
What influences the popularity of cryptocurrency?
Sometimes, even the cheapest cryptocurrencies become very popular. Where does it come from? It turns out that many factors can lead to an increase in interest. There is no such thing as the best cryptocurrency. The cryptocurrency market is very closely linked to internet culture. Information is transferred between investors using social media, thematic groups, and memes.
The best example of how a good meme can arouse interest is Dogecoin (DOGE). It is a project that does not represent anything specific. It was created in 2013 as a joke. Internet users quickly picked up on this idea.
They are putting a “dog” known from memes as a logo turned out to be a bull’s-eye. Even though there is nothing to support DOGE, it is in the top ten cryptocurrencies regarding market capitalization. This is the power of media hype and appropriate marketing. This does not mean, however, that only such projects are gaining popularity. The primary determinant should be the usefulness of a given problem. If a cryptocurrency can solve a problem, it will likely attract interest. A great example is Ethereum (ETH), a top project due to its high usability.
Price is also a factor that may increase popularity. We subconsciously equate more expensive goods with quality. Premium brands have been basing their activities on this mechanism for years. The same is true for cryptocurrencies. Some investors, seeing the high price of the cryptocurrency, may believe that this is a project worth attention.
Often, they do not conduct any other research. In this way, they contribute to further price increases, attracting more investors. Cheap cryptocurrencies also have their supporters. Why? Because the imagination is captivated by the very high potential profit. If a project costs $0.0003, imagine how much profit you will make when the rate is at least $1. Of course, this type of thinking has many disadvantages.
Most projects with such a low rate will not achieve much success. However, beginners are especially fond of this type of cryp
tocurrency, which is why they are gaining popularity among specific communities.
The most popular assets – a list of the best cryptocurrencies
The list of the best cryptocurrencies will never be objective. It is always an expression of a subjective opinion or an indication of the best project in a given category. Moreover, all cryptocurrency rankings have a reasonably short expiration date. Depending on the criterion they adopt, they may quickly become outdated. We present a list of cryptocurrencies that, in our opinion, are among the most popular.
This position shouldn’t surprise anyone. It is the first and, one might say, the most crucial cryptocurrency today. It was she who managed to penetrate the public consciousness. It appears in series, films, and animations. It is an open-source and decentralized platform enabling transactions between users. The mysterious author is a person/group/organization hiding under Satoshi Nakamoto’s pseudonym. Bitcoin uses the Proof-of-Work algorithm. Detailed information about this popular cryptocurrency can be found in the guide What is Bitcoin and how does it work?
Ethereum (ETH) holds the second place in terms of popularity. Like Bitcoin, it is an open-source and decentralized platform. ETH has a much more comprehensive application. You can use it to create tokens (including NFTs) to build decentralized applications (dApps). The supply of Ethereum is unlimited, but there are voices about its limitations. It is based on the Proof-of-Work algorithm, but work is underway on ETH 2.0, which uses the Proof-of-Stake algorithm.
Binance Coin (BNB)
It is a utility token associated with the largest and most popular cryptocurrency exchange, Binance. The popularity of this project results from its very high utility value. People using BNB on the Binance exchange can enjoy lower rates. Lower commissions and transaction fees mean that the Number of interested parties is constantly increasing. The target maximum supply of Binance Coin is 100 million. BNB is based on the Ethereum network.
The XRP cryptocurrency is often called Ripple. The payment network was created before Bitcoin; Ripple founded it. It developed a real-time settlement system, which was later adapted to the capabilities of blockchain technology. It is a quasi-decentralized platform. It connects financial institutions, enabling them to transfer funds instantly.
Cardano is a decentralized and open-source platform. The authors wanted to create a comprehensive platform that could be all-in-one. With its help, you can make smart contracts. The network was launched in 2017. It is a direct competitor to Ethereum (ETH). The project’s supply is limited and amounts to 45 billion units. Cardano uses a Proof-of-Stake consensus algorithm.
A network that has gained considerable popularity with the development of NFTs. It is a blockchain that allows for fast transactions at high throughput. With SOL, users pay transaction fees. They also can interact with smart contracts. Solana uses Proof-of-History. It is a consensus algorithm that is intended to solve the scalability problem. Transactions are hashed using the SHA256 hash function.
USD Coin (USDC)
USDC is a stablecoin that reflects the exchange rate of the US dollar. It is a haven for investors who are tired of the high volatility of the cryptocurrency market. Theoretically, 1 USDC should always be worth 1 USD. Collateralized assets back the entire cryptocurrency supply. Banks store USD, which represents the value of the digital currency. The Ethereum network supports USD Coin. Therefore, it can be stored on wallets compatible with this network.