Getting started in the world of cryptocurrency can be overwhelming with the thousands of options available, ranging from Bitcoin and Ethereum to Dogecoin and Tether. To help you navigate this complex landscape, here is a list of the top 10 cryptocurrencies based on their market capitalization. This is calculated as the total value of all the coins currently in circulation for each cryptocurrency.
- 1 What Are Cryptocurrencies?
- 2 Top 10 Cryptocurrencies Of 2023
- 3 Crypto FAQs
- 3.1 What are cryptocurrencies?
- 3.2 How does trading cryptocurrencies differ from trading stocks?
- 3.3 Do you have to pay taxes on cryptocurrency?
- 3.4 Are there cryptocurrency exchange-traded funds (ETFs)?
- 3.5 How do you buy crypto?
- 3.6 Why are there so many cryptocurrencies?
- 3.7 What are altcoins?
- 3.8 Why is bitcoin valuable?
- 3.9 Why are cryptocurrencies important?
- 4 Conclusion
What Are Cryptocurrencies?
Cryptocurrencies are digital or virtual currencies that use cryptography to secure and verify transactions, as well as to control the creation of new units of a particular cryptocurrency. Cryptocurrencies are decentralized, meaning they are not controlled by any central authority such as a government or financial institution. Instead, they rely on a distributed ledger technology, such as a blockchain, which is a public database that records every transaction made on the network.
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One of the main features of cryptocurrencies is their high degree of anonymity, which makes them attractive to many people. They are also highly secure, as each transaction is verified and encrypted using advanced cryptographic techniques. This makes it almost impossible for anyone to hack or tamper with the transaction history.
Cryptocurrencies can be used to purchase goods and services, or as a store of value similar to traditional fiat currencies such as the US dollar or the euro. Some popular cryptocurrencies include Bitcoin, Ethereum, Binance Coin, and Tether, but there are thousands of other cryptocurrencies in circulation.
Top 10 Cryptocurrencies Of 2023
1. Bitcoin (BTC)
- Market cap: $452.1 billion
Bitcoin (BTC) is the original cryptocurrency created in 2009 by Satoshi Nakamoto, and currently has a market capitalization of $452.1 billion. It operates on a blockchain, which is a decentralized ledger that records transactions across a network of computers. Bitcoin is kept secure through a process called proof of work, where additions to the ledger must be verified by solving a cryptographic puzzle.
Since its creation, the price of Bitcoin has surged, making it a household name. In May 2016, one Bitcoin was worth about $500, but as of February 28, 2023, its price had risen to around $23,421, representing an impressive growth of 4,584%.
2. Ethereum (ETH)
- Market cap: $200.0 billion
Ethereum (ETH) is a blockchain platform and cryptocurrency with a market capitalization of $200.0 billion. It is favored by program developers due to its potential for creating applications such as smart contracts that execute automatically when conditions are met, and non-fungible tokens (NFTs).
Like Bitcoin, Ethereum has experienced impressive growth. Between April 2016 and the end of February 2023, its price surged from about $11 to around $1,634, representing an astonishing increase of 14,754%.
3. Tether (USDT)
- Market cap: $70.9 billion
Tether (USDT) is a type of cryptocurrency with a market capitalization of $70.9 billion, but unlike other cryptocurrencies, it is a stablecoin. This means that it is backed by fiat currencies like the U.S. dollar and the Euro, and it is designed to maintain a value equal to one of those denominations. The stability of Tether’s value makes it a popular choice among investors who are wary of the extreme volatility of other cryptocurrencies.
4. Binance Coin (BNB)
- Market cap: $47.9 billion
Binance Coin (BNB) is a cryptocurrency primarily used for trading and paying fees on Binance, one of the world’s largest cryptocurrency exchanges. Since its launch in 2017, Binance Coin has evolved beyond just facilitating trades on the Binance exchange platform. It can now be used for trading, payment processing, and even booking travel arrangements. Additionally, Binance Coin can be traded or exchanged for other cryptocurrencies such as Ethereum or Bitcoin.
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In 2017, BNB was worth just $0.10. As of late February 2023, its price had surged to around $303, marking an astonishing gain of 303,157%.
5. U.S. Dollar Coin (USDC)
- Market cap: $42.4 billion
USD Coin (USDC) is a stablecoin with a market capitalization of $42.4 billion, similar to Tether. It is backed by the U.S. dollar and aims to maintain a 1 USD to 1 USDC ratio. USDC is built on the Ethereum blockchain and can be used for global transactions.
6. XRP (XRP)
- Market cap: $19.3 billion
XRP (XRP) is a cryptocurrency with a market capitalization of $19.3 billion, created by some of the same founders as Ripple, a company specializing in digital technology and payment processing. XRP can be used on the Ripple network to facilitate exchanges of various currency types, including fiat currencies and other major cryptocurrencies.
At the start of 2017, XRP was valued at $0.006. As of February 28, 2023, its price had risen to $0.38, marking an increase of 6,204%.
7. Cardano (ADA)
- Market cap: $12.6 billion
Cardano (ADA) is a cryptocurrency with a market capitalization of $12.6 billion, known for its early adoption of proof-of-stake validation. This method accelerates transaction time and reduces energy consumption and environmental impact by eliminating the competitive problem-solving aspect of transaction verification in platforms like Bitcoin. Cardano also allows for smart contracts and decentralized applications, which are powered by ADA, its native coin.
Compared to other major cryptocurrencies, ADA’s growth has been relatively modest. In 2017, ADA was valued at $0.02. As of February 28, 2023, its price had risen to $0.36, an increase of 1,712%.
8. Dogecoin (DOGE)
- Market cap: $10.8 billion
Dogecoin (DOGE) gained popularity as a humorous cryptocurrency created in 2013. Its ascent to prominence is partly due to its passionate community and creative use of memes. Unlike other cryptocurrencies, there is no limit to the number of Dogecoins that can be produced, potentially causing its value to decrease as the supply grows.
In 2017, the price of Dogecoin was $0.0002. As of February 2023, it was trading at around $0.08, reflecting an impressive growth of 40,761%.
9. Polygon (MATIC)
- Market cap: $10.7 billion
Polygon (MATIC) is a blockchain platform that provides an infrastructure for building and connecting decentralized applications, making it a popular choice for developers. Its growth has been impressive, with MATIC’s price at its launch in 2017 being $0.00263, while as of February 28, 2023, its trading price is around $1.23, representing an increase of 46,594%. Polygon has been dubbed as “Ethereum’s internet of blockchains,” and it supports over 7,000 decentralized applications (dApps).
10. Binance USD (BUSD)
- Market cap: $10.6 billion
Binance USD (BUSD) is a stablecoin backed by the U.S. dollar, created through a partnership between Paxos and Binance. The supply of BUSD is backed by an equivalent amount of U.S. dollars held by Paxos, ensuring a 1:1 ratio between the two currencies. BUSD’s stability makes it a useful tool for traders and crypto users looking to minimize their exposure to market volatility. Its market cap currently stands at $10.6 billion
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What are cryptocurrencies?
Cryptocurrency is a digital currency that can be used for online purchases without the involvement of a bank or other intermediary. It can also be used as an investment.
How does trading cryptocurrencies differ from trading stocks?
Investing in cryptocurrencies differs significantly from traditional investments like stocks. When purchasing stocks, investors are buying a share of ownership in a company that may entitle them to vote on the direction of the company and receive compensation if the company goes bankrupt and its assets are liquidated.
However, buying cryptocurrencies only grants ownership of the token itself, which is more akin to exchanging one form of currency for another. In case the cryptocurrency loses its value, there won’t be any compensation.
There are several other critical differences to consider, such as the trading hours, regulation, and volatility. Unlike stocks that can only be traded during stock exchange hours, cryptocurrencies can be traded 24/7.
Stocks are regulated financial products, and their credentials and finances are a matter of public record. Cryptocurrencies, on the other hand, are not regulated investment vehicles, and investors may not be aware of the inner workings of the cryptocurrency or its developers. Cryptocurrency prices are more speculative and uncertain than stocks, and they are more volatile and sensitive to market conditions, such as a celebrity’s tweet.
Do you have to pay taxes on cryptocurrency?
When trading cryptocurrencies, it’s crucial to be aware of the applicable tax regulations. Cryptocurrency is considered a capital asset, just like stocks, rather than cash. As a result, if you sell your cryptocurrency for a profit, you will be liable for capital gains taxes, regardless of whether you use the proceeds to make a purchase. If you receive more for the crypto than you paid for it, you will be required to pay taxes on the profit.
Are there cryptocurrency exchange-traded funds (ETFs)?
Due to the vast number of cryptocurrencies available and their high volatility, many investors prefer a diversified approach to minimize the risk of losing money. One way to achieve this is through investing in a crypto ETF (Exchange-Traded Fund).
Although several companies, such as Fidelity, have proposed crypto ETFs, regulatory obstacles have hindered the launch of any consumer products. As of June 2021, there are no ETFs available to average investors on the market.
How do you buy crypto?
Cryptocurrencies can be purchased through cryptocurrency exchanges like Coinbase, Kraken, or Gemini. Some brokerages like WeBull and Robinhood also offer the option to buy cryptocurrencies.
Why are there so many cryptocurrencies?
The field of cryptocurrency is rapidly evolving, with over 19,000 crypto projects currently in existence and very few entry barriers. The past year in particular has seen a surge in the crypto market, resulting in the addition of thousands of new crypto projects.
While some cryptocurrencies are primarily used as digital currencies, others are utilized for developing infrastructure. For example, Ethereum and Solana serve as platform currencies upon which developers build other cryptocurrencies, opening up new possibilities and leading to the creation of even more cryptocurrencies.
What are altcoins?
Bitcoin is the most well-known cryptocurrency, making up more than 45% of the total cryptocurrency market. Cryptocurrencies other than Bitcoin are referred to as altcoins. The most popular altcoin is Ethereum.
Why is bitcoin valuable?
Bitcoin’s scarcity is one of the factors that contributes to its value. The maximum supply of Bitcoin is limited to 21 million coins, and as of now, around 19 million coins are in circulation.
To add new coins to the supply, Bitcoin uses a process called mining, where miners receive a fixed amount of Bitcoin for successfully mining a block. Currently, a miner receives 6.25 BTC for every block mined. However, the rewards for mining are reduced by half roughly every four years to control the supply of new coins.
Why are cryptocurrencies important?
Cryptocurrencies have become increasingly important and are expected to remain relevant for the foreseeable future. While the original intent behind cryptocurrency was to address the shortcomings of traditional currencies, the creation of the blockchain has resulted in the emergence of various utility cryptocurrencies.
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The article lists the top 10 cryptocurrencies by market cap as of February 28, 2023. Bitcoin (BTC) holds the top position with a market cap of $452.1 billion. Ethereum (ETH) is in the second position with a market cap of $200.0 billion.
Tether (USDT) is a stablecoin and has a market cap of $70.9 billion. Binance Coin (BNB) is a cryptocurrency used to trade and pay fees on Binance, with a market cap of $47.9 billion. U.S. Dollar Coin (USDC) is another stablecoin and has a market cap of $42.4 billion. XRP (XRP) is a cryptocurrency created by Ripple and is used to facilitate exchanges of different currency types, with a market cap of $19.3 billion. Cardano (ADA) is notable for its early embrace of proof-of-stake validation and has a market cap of $12.6 billion.
Dogecoin (DOGE) was famously started as a joke in 2013 but rapidly evolved into a prominent cryptocurrency, with a market cap of $10.8 billion. Polygon (MATIC) is dubbed “Ethereum’s internet of blockchains,” and supports more than 7,000 decentralized applications, with a market cap of $10.7 billion. Binance USD (BUSD) is a stablecoin backed by the U.S. dollar and has a market cap of $10.6 billion.