For those new to cryptocurrency, the sheer number of coins on the market can seem baffling. Without getting into the booming world of ICOs, let’s take a look at the top four currencies by market capitalization.
1. Bitcoin (BTC)
The granddaddy of them all, Bitcoin continues to rule supreme with a market capitalization of $140 billion according to CoinMarketCap.
Befitting an entity of this magnitude, Bitcoin has its very own creation myth — coming into existence in 2009 thanks to a mysterious individual, or group of individuals, working under the pseudonym Satoshi Nakamoto. Bitcoin also introduced the world to the blockchain, the distributed ledger underpinning all subsequent cryptocurrencies.
Bitcoin is a Proof of Work (PoW) currency, meaning that so-called miners create new coins through solving complex puzzles that verify and add transactions to the blockchain. While it’s getting progressively harder to solve the puzzles and mine new coins, this hasn’t stopped countries like Georgia from drinking up 28 million kilowatt-hours of electricity per month running a fleet of mining rigs.
2. Ethereum (ETH)
Ethereum’s market cap of $68 billion pales in comparison to Bitcoin’s, but the time may come when it sits alone at the top of the mountain. While the Bitcoin blockchain exists only to facilitate cryptocurrency transactions, Ethereum’s blockchain lets developers create applications similar to how one might create a program that runs on iOS or Android. These DApps (decentralized apps) rely on smart contracts and the Ethereum currency in order to work.
There are already nearly 1,500 DApps in varying states of completion, with the number sure to grow as people become more comfortable with crypto and blockchain tech.
3. Ripple (XRP)
Like Ethereum, Ripple is a platform that uses its own cryptocurrency (XRP) for transactions and fees, the purpose of which is instant, cheap, and reliable money transfers anywhere in the world. After a period of stratospheric growth, it’s come back down to earth, settling into a still impressive market cap of $26 billion.
Unlike other cryptos where the community prides itself on decentralization and freedom from government, corporate, or individual control, Ripple is backed by a single entity, Ripple Labs, as well as several major financial institutions. While this centralization has advantages when it comes to organization and preventing impropriety, many feel such authority runs counter to the founding principles of cryptocurrency.
4. Bitcoin Cash (BCH)
On August 1, 2017, something incredible occurred. Bitcoin, then as now the grand poobah of crypto, ‘reproduced’, creating an offspring which has gone on to make its parent proud with a market cap of $21 billion.
This crypto-genesis was due to something called a ‘hard fork’. A dispute over scalability resulted in the community splitting the Bitcoin blockchain into two separate branches. The original branch remained Bitcoin, while the second, newer branch became Bitcoin Cash. While it occupies the bottom of our list, there’s a lot of daylight between it and number five, EOS, which has a market cap of around $11 billion.
There you have it — the reigning quartet of cryptocurrencies. But note well, as with everything in crypto, the situation is volatile, and depending on a multitude of factors including government regulation and the embrace of Wall Street, the rankings may look very different by the time you read this.