Going through crypto categories is the first step to take when developing your cryptocurrency investment portfolio. Here are some of the most popular top cryptocurrency categories and the leading cryptos in each space. Remember that these are just a few examples of many categories in the exciting cryptocurrency world. Also, other people may categorize these cryptos differently. You can explore more about cryptocurrency categories in my book, Cryptocurrency Investing for Dummies.
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Five Top Cryptocurrency Categories For Your Investment Portfolio
1- Payment Cryptos
This is by far the biggest of the top cryptocurrency categories in terms of total market cap. In this group, we can find cryptocurrencies that mainly aim to be used as a store of value, transaction, and payments. You soon may be able to use them like fiat currencies such as the US dollar. Examples of Cryptocurrencies which fall in this category include:
- Bitcoin (BTC)
- Litecoin (LTC)
- Bitcoin Cash ((BCH)
- OmiseGo (OMG)
- Dash (DASH)
- Ripple (XRP)
- Tether (USDT)
With Bitcoin as the pioneer, there is no wonder this is the most popular of all top cryptocurrency categories. But the blockchain technology can be applied to so much more than just payment system… So be on a watch out for the next big thing within other hot categories!
2- Privacy Cryptos
These are the cryptocurrencies that are heavily focused towards transaction security and anonymity. A LOT more than those in the payment category. In fact, it’s a common misconception that Bitcoin and other cryptocurrencies in the payment category are fully anonymous and untraceable. Many blockchains only disguise users’ identities while leaving behind a public record of all transactions that have occurred on the blockchain. The data in the ledger often includes how many tokens a user has received or sent in historical transactions. It also has the balance of any cryptocurrency that they have within their wallet.
Privacy cryptos can be a bit controversial. Authorities see them as a tool that can be used by criminals to engage in illegal activities. Like for money laundering, for example. Nonetheless, some of them have gained popularity. Here are some examples:
- Monero (XMR) – most famous one as of 2018
- Zcash (ZEC) – similar to Monero but with a different protocol
- CloakCoin (CLOAK) – lesser-known privacy crypto with a number of added layers of security
- Dash (DASH) – Also mentioned in payment category, Dash is a bit of hybrid. In addition to Bitcoin’s core features, Dash also includes the option for instant and private transactions.
3- Platform Cryptos – Top Cryptocurrency Categories
This one in the top cryptocurrency categories is also referred to as Decentralized Application Protocol cryptos or Smart Contract cryptos. It can also be a hybrid of all three. This category includes cryptocurrencies that are on a centralized blockchain platform. Developers mainly use them to build decentralized applications. Using these cryptocurrencies, you can build platforms for blockchain applications (and thus, other cryptocurrencies.) You can generally consider them as good long-term investments. They may rise in value as more applications are created on their Blockchain. That can also help increase price of such coins. The most famous example in this category is Ethereum (ETH.) Others include:
- NEO (NEO) – Smart contracts ecosystem similar to Ethereum. Its goal is to be a platform for a new smart economy. China’s largest cryptocurrency.
- EOS (EOS) – Smart contracts platform similar to Ethereum, but with performance and scalability benefits.
- Icon (ICX) – Wants to “Hyperconnect the World” by building one of the largest decentralized global networks.
- Qtum (QTUM) – Singapore-based Ethereum and Bitcoin hybrid.
- VeChain (VEN) – Blockchain based platform that provides retailers and consumers with the ability to determine the quality and authenticity of products that are bought.
4- Exchange-Specific Platforms
These are the cryptos that are introduced and used mainly by the cryptocurrency exchanges. You can consider them as incentives that bring people to their exchange platform. To select the best exchange-specific cryptocurrency, you can consider taking the steps I introduce in Chapter 4 of my book to choose the best cryptocurrency exchange. Here are a few examples:
- Binance Coin (BNB) – Issued by Binance exchange, it runs on Ethereum platform and has a strict limit of maximum 200 million BNB tokens.
- KuCoin Shares (KCS) – Just like Binance Coin but for the KuCoin exchange.
- BiBox Token (BIX) – One of the smaller exchanges that has successfully launched their own token
- COSS Coin (COSS) – A much smaller exchange than KuCoin, but looking to introduce new features as of 2018
5- Finance- Fintech Cryptos
Here I’m going to group pure financial with financial technology (Fintech) related cryptocurrencies. These can be cryptos that are used to facilitate the creation of a financial system for the blockchain and people around the world.
- Ripple (XRP) – A Blockchain payment system for banks, payment providers, digital asset exchanges, and other companies. Designed to move large amounts of money quickly and reliably.
- Stellar Lumens (XLM) – Aim to develop the world’s new financial system. Building an open system where people of all income levels can access financial services.
- Populous (PPT) – A Global invoice trading platform to help businesses. Smart Contracts automatically perform funding and release payment without a third-party.
These were just a few examples of many categories in the exciting cryptocurrency world. Other people may categorize these cryptos differently. As I talk more about this in my book, other popular cryptocurrency categories include:
- Property/ Legal
- Gaming/ gambling
- Supply chain
- Internet of Things (IoT)
Join our investing group to get the latest investing strategies using these categories, stop-loss, take-profit and other limit order ideas on cryptocurrencies, forex and stocks. Our comprehensive signals will help you create a unique strategy for you, according to your risk tolerance.
Don’t forget to complete your risk management due-diligence before developing your investment strategy.