Over time, digital currencies have become more mainstream as people started to realize their potential to change how we do things today. In fact, over $300 billion worth has been traded on cryptocurrency exchanges since its inception in 2009.
So what is a cryptocurrency? Generally speaking, it refers to any type of currency that relies heavily on blockchain technology. Popular classic altcoins like Litecoin or Ethereum use different methods, but they still rely on blockchain technology for transaction verifications.
Nowadays, you may even see some examples of stocks being called “digital commodities” because they operate by blockchain also, in the form of tokenized stocks. FTX, for example, is offering these tokenized stocks.
But, whether you call it money, coin, token, or something else, everyone agrees that cryptocurrency functions differently from regular fiat currency.
Because of this difference, many argue that they aren’t real currencies at all despite having values and use cases just like paper bills. However, most economists believe that if enough investors come around to buy into something, then it must be valuable.
Let’s take a look at Bitcoin and some of the few classic cryptocurrencies that used to be quite popular years ago. Hopefully, after reading this article, you’ll have more knowledge about these classic cryptocurrencies so you can decide whether you want to start investing in them or not.
First up, let’s talk about Bitcoin. BTC was created by Satoshi Nakamoto way back as an open-source software project designed to provide peer-to-peer electronic cash transactions without relying on central authorities or governments.
One thing I love about bitcoin is that unlike centralized currencies out there, it doesn’t require you to verify your identity before using it. Since it uses public key cryptography that everybody in the same network can verify, anyone can participate without needing to prove anything. This is a big deal for privacy absolutists.
Another great feature of bitcoin is that once it’s fully mined, no new ones will ever need to be generated again. There are only going to be 21 million bitcoins minted in total, making supply far less scarce compared to gold bars and coppers. This scarcity utility is what gives value to Bitcoin.
And moreover, bitcoin blockchain is decentralized, meaning there is no single authority controlling who owns the coins. As long as mining continues and block rewards still exist, BTC will never go away.
Ethereum (ETH) – Ether is actually the name given to the underlying cryptocurrency that powers the entire decentralized supercomputer known as Ethereum blockchain. What makes Ethereum unique is that it introduced the idea of making smart contracts. These smart contracts run on nodes across the entire system and allow developers to build applications directly onto the main chain itself.
Since each node runs independently from others, it essentially creates a copy of the whole database that keeps track of balances and ownership histories. Ethers are used to pay fees to keep miners/validators running the network.
Created by Charlie Lee in 2011, Litecoin aims to solve issues commonly seen with smaller currencies, including slow transaction confirmations times and high transaction fees. Litecoin tries to fix existing Bitcoin issues using improved algorithms.
For instance, its hashing algorithm takes advantage of Scrypt to make sure blocks don’t get stuck. Not only that, but it also offers faster confirmation times thanks to shorter intervals between blocks.
Litecoin is somewhat similar to Bitcoin, but it’s designed to be cheaper and faster. Unlike most modern cryptocurrencies that innovate via the Proof-of-Stake consensus mechanism, Litecoin is still utilizing Proof-of-Work.
Another classic cryptocurrency that has existed since a long time ago is Cardano. Cardano is developed by Charles Hoskinson, co-founder of Ethereum. Cardano is built specifically to address scalability concerns that have plagued other cryptocurrencies for years.
To achieve better scaling, Hoskinson came up with Ouroboros, a proof-of-stake protocol. Cardano is also claimed to be the first blockchain protocol that is based on the peer-reviewed research.
While Cardano was launched years ago, it wasn’t until recently that it achieved full development status. Cardano is able to compete with other major smart contract platforms. ADA, the native crypto on Cardano blockchain, has consistently maintained its position in the top 10 market cap rankings.
Tron/TRX – Tron is another relatively young platform that debuted back in 2017. In the beginning, Tron focused on being the blockchain for content creation. Its goal was to create a global free file distribution service based solely on blockchain technology. Because of this, the company behind it believes that it could replace traditional media giants such as Google and Facebook.
But things have evolved since then. Nowadays, Tron is trying to compete against other mainstream smart contract platforms like Ethereum, Cardano, Avalanche, and Solana. It is still able to stay in the top 20 market cap rankings and there is still a decent amount of traffic in the Tron blockchain.
Justin Sun, the founder of Tron, bought BitTorrent outright and rebranded it under his newly formed Bittorrent Foundation. He also created an algorithmic stablecoin on Tron and called it USDD.
NEO: Designed to compete with Ethereum, NEO was thinking of bringing China’s internet economy online using blockchain technology. With a focus on building infrastructure, it hopes to improve efficiency and cost savings in areas ranging from logistics, finance, healthcare, retail, entertainment, education, and government services.
However, NEO has become a bit irrelevant recently due to how competitive the crypto space is. It is no longer in the top 30 market cap rankings. It’s sad knowing NEO was among the top 10 crypto back in 2017. Despite it’s not as popular as it used to be, NEO is still trying to attract top dapps to build on its blockchain.
EOS used to be the most popular ICO back in 2017. They were able to raise $ 4 billion in a yearlong ICO (Initial Coin Offering). EOS works like Ethereum, but it’s far more centralized. EOS hopes to revolutionize cloud computing by providing low latency access to scalable networks.
Through continuous improvements to performance, EOS intends to enable users to process large amounts of data without experiencing downtime. EOS used to be a big deal in the crypto space, but it has fallen from the top spot of crypto popularity. Just like NEO, it has been surpassed by other smart contract platforms like Solana, Avalanche, and BSC.
Binance Coin/BNB: Launched in 2017, BNB quickly became one of the top altcoins by market cap. It operates as the core power of Binance exchange platform (a certain percentage of Binance exchange revenues were used to buyback and burn BNB). In the past few years, BNB has evolved to become the native cryptocurrency of Binance Smart Chain (BSC).
It works similarly to how Ether (ETH) works in the Ethereum blockchain. You pay gas fees in BSC by using BNB. There are also other use cases from BNB such as to participate in Binance Launchpad or to obtain LP rewards with various DEX-es.
Stellar Lumens/XLM: Stellar seeks to disrupt the banking industry by offering cheap international transfer fees. It became very popular when it announced a partnership with IBM blockchain. At that time, the narrative was that IBM Blockchain and Stellar technology would be able to replace the SWIFT system for international transfers.
Even though nowadays it’s not as popular as it used to be, Stellar remains in the top 30 crypto market cap rankings at the time of this article’s publication.
There are other popular classic coins out there, like XRP, Dogecoin, or Monero. Many classic altcoins that became popular in 2017’s bull market are still here trying to become relevant again.
However, only a few of them are still able to maintain their relevance in the recent 1-2 years. BNB, Cardano, and Ether (which I mentioned above) are probably the best examples of the classic altcoins that are able to stay on the top of the food chain.