How many cryptocurrencies are there? Guide to the crowded market

Cryptocurrency background with various shiny silver and gold physical cryptocurrencies, coin symbols, Bitcoin, Ethereum, Litecoin, zcash, ripple Photo: eamesBot / Shutterstock.com The number of cryptocurrencies has exploded exponentially over the past few years. Investors have been attracted by the potential for massive returns from trading volatile markets and project developers have expanded applications from digital currencies to decentralised finance ( DeFi ), gaming, non-fungible tokens ( NFTs ) and metaverse environments.

How many crypto coins are there? Why are there so many cryptocurrencies and what are the different types of coins and tokens?

In this guide, we look at how the cryptocurrency market has developed and the potential future of the industry. How many cryptocurrencies are there?

From the launch of bitcoin ( BTC ) in 2009 and ether ( ETH ) in 2015, the cryptocurrency market proliferated to more than 9,000 different coins and tokens in 2021. The total number of cryptocurrencies in the world has soared to more than 20,200 in circulation currently, based on CoinMarketCap data. Horizontal axis: Month, Year; Vertical axis: Number of cryptocurrencies Some projects are unsuccessful and fold, and some launch new versions of their currencies, such as Terra’s LUNA 2.0 token after a crash in May that reverberated throughout the crypto markets. Why are there so many cryptocurrencies?

When the Bitcoin blockchain launched in 2009, it created opportunities for developers to create new applications and services using blockchain technology. Developers have sought to build on the strengths and solve the weaknesses of the Bitcoin protocol by launching alternative cryptocurrencies, known as altcoins .

Ether, which runs on the Ethereum blockchain, is the biggest altcoin. Unlike bitcoin, which aims to function as a digital currency, ether enables transactions on the Ethereum smart-contract platform, enabling developers to build applications on top of its framework.

As blockchain technology has developed, cryptocurrencies have moved beyond a digital store of value to enabling other financial services, health data management, supply chain logistics, social networks and asset ownership.

And as some blockchains have come up against issues of scalability, developers have launched new protocols to help expand their processing capabilities and reduce transaction costs. There are now different layers of blockchains, each with their own cryptocurrency tokens that enable their functionality: Layer 0 – Data transfer architecture that runs protocols and supports Layer 1 blockchains. Polkadot ( DOT ) is a Layer 0 project that uses its Relay Chain to act as a bridge between Layer 1 blockchains

Layer 1 – Public, independent blockchain networks, such as Bitcoin, Ethereum, Solana ( SOL ) and Avalanche ( AVAX )

Layer 2 – Blockchain solutions built on top of Layer 1 blockchains to solve scalability limitations. They often process tasks off chain to help simplify and speed up transactions. Polygon ( MATIC ), Arbitrum and Optimism (OP) are among the well-known Layer 2 projects

Development teams have also launched cryptocurrency tokens purely as a form of speculation, to profit from the growing interest in the market and hype around new projects, as investors look for the next bitcoin.

All of that adds up to a massive crypto circulating supply and a total market capitalisation of $884m at the time of writing, based on CoinMarketCap data. Total cryptocurrency market cap; April 2013 to July 2022 What is the difference between coins and tokens?

Some cryptocurrencies are referred to as coins while others are called tokens. The terms are sometimes used interchangeably, but they are not necessarily the same.

Coins are cryptocurrencies that run on their own independent blockchain, such as bitcoin and ether. Tokens are cryptocurrencies that run on another blockchain and operate on its standards, like the ERC-20 standard on the Ethereum blockchain or the BEP-20 standard on the Binance Smart Chain ( BSC ). Cryptocurrencies like shiba inu ( SHIB ), uniswap ( UNI ) and apecoin ( APE ) are ERC-20 tokens that run on Ethereum, while safemoon (MOON), bugercities (BURGER), PancakeSwap’s CAKE are BEP-20 tokens.

Coins are continuously created by miners as they process and validate transactions on the blockchain. Tokens tend to be pre-mined and released onto the market at launch, or distributed at scheduled intervals over months or years. Types of cryptocurrencies

There are several types of cryptocurrencies depending on the aims of the project and their usage.

How many different cryptocurrencies are there? Let’s take a closer look at some of them and how they work. Utility tokens

Utility tokens are cryptocurrencies that are designed to enable specific functions in an application. They are commonly used in DeFi applications […]

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