What is the total number of cryptocurrencies and why are there so many? In this article, we'll look at how many cryptocurrencies there are and why new ones keep appearing.
There are over 4,000 cryptocurrencies in circulation. That is more than all the world's fiat currencies put together. Many people are curious as to why there are so many of them. There was only Bitcoin nine years ago. Almost every area of the economy now has a cryptocurrency. All of these currencies seek to use blockchain technology to better almost every industry including banking, healthcare, art, and more. Here are some of the probable causes for this predicament.
The Causes and Effects of the Boom
There are many distinct types of cryptocurrencies, each with its own set of features. One of the reasons we see so many cryptocurrencies is the underlying blockchain technology. It allows programmers to design a variety of cryptocurrencies with varied functions.
They offer cryptocurrency that can be used as money. They are basically a store of wealth that can be utilized in the same way that regular fiat currency can. This includes Bitcoin and plenty of other digital currencies.
Some tokens also have utility; they are a collection of digital currencies that work together to form an ecosystem. They make it possible to build additional cryptocurrencies on top of their infrastructure. The finest example is Ethereum, which has permitted the development of numerous tokens on its platform thanks to its Ethereum Virtual Machine. Some other primary forms of cryptocurrency are application or platform cryptocurrencies, as they are commonly referred to.
Huge Profit Margins
One major reason for the multiplication of cryptocurrencies is the overwhelming success of Bitcoin and a handful of others. When Bitcoin was founded, few people were aware of it. It had little value, and many people ignored it or didn't bother to look into it, and its worth has risen steadily over time. Until early 2017, even Ethereum was practically valueless, but we all know what happened!
Nonetheless, in 2017, Bitcoin and virtually every other cryptocurrency saw a meteoric rise. As Bitcoin soared to an all-time high, jumping from under $1,000 in January to more than $19,000 per BTC in December of the year, many became instant millionaires. Everyone became aware of what was going on.
Innovation and Curiosity
Due to the current innovation and the drive for continuous development, cryptocurrency prices continue to rise. Even though we already have cryptocurrencies with smart contracts that fundamentally function in the same manner, new ones continue to appear. They tinker with the protocol and boast to have created the very next breakthrough smart contract ecosystem.
The ICO boom
Another probable cause for the spread of coins is the ICO boom. The popularity of these token offerings alone has encouraged greater token sales. The absence of adequate oversight in the ICO space has rendered it even simpler. Whereas some ICOs use Ethereum as a host platform, many are developing their own blockchain platforms. Each has its own indigenous coin, which is used to conduct network transactions.
The development of new cryptocurrencies has also been aided by forking. Although forking may not have been the direct driver of various cryptocurrencies' success, it is nonetheless a key element. There are at least four known Bitcoin forks, the most prevalent are Bitcoin Cash, Litecoin, and Bitcoin Gold. Litecoin’s fork is Litecoin Cash; Ethereum Classic (ETC) is Ethereum‘s(ETH).
The bottom line is, nobody really has power over blockchain technology. Anyone that understands the technology may use it to create their own currency. Following Bitcoin, numerous programmers immediately realized they could build an improved "fork" of the original using the same technology. They were all attempting to construct something comparable or superior to Bitcoin.
The expanding number of cryptocurrencies isn't necessarily a terrible aspect. What is important, however, is how each contributes to the development of society and the enhancement of our lives.
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