The term “cryptocurrency” is merely suggestive of some cryptographically written coins that are used in transactions and stored up some measure of values. It does not capture the varying difference in various coins which include technology, incentive alignment, and structure. Each cryptocurrency solves a fixated issue, and they fall into a certain type of category but in some cases, they do more than solving a single problem which places them in more than one category. Here are a few categories that a cryptocurrency could fall into.
Classification of Cryptocurrency
Cryptocurrency can be grouped into four main classes which are; transactional cryptocurrency, utility cryptocurrency, platform cryptocurrency and application cryptocurrency.
- Transactional Cryptocurrencies
This is the category which cryptocurrency is originally intended for. The most popular of them all is without a doubt Bitcoin. The intention of this cryptocurrency is to remove the control of of central authority and cutting out the middleman in our day to day transaction.
- Platform Cryptocurrencies
This category creates a form of bedrock that facilitates the operation of other decentralized application. Examples include Ethereum and NEO. Ethereum & NEO allow the creation of smart contract, with Ethereum being the most widely used smart contracts platform to date. Platform cryptocurrencies provide the foundation as well as buildings blocks that allows the swift development of other dencentralized apps/cryptocurrencies
- Utility Cryptocurrencies:
A utility cryptocurrency is a cryptocurrency designed for a specific purpose. Siacoin is one of the notable examples. Siacoin is designed to facilitate a decentralized storage network which is a fairly unique concept and novel application of blockchain technology.
- Application Cryptocurrencies
Application Cryptocurrencies refers to the class of cryptocurrencies that were based upon the platform cryptocurrencies ( Type II dapps )
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