What is the point of cryptocurrencies?

It all started in 2009, when a person or group of people operating under the pseudonym Satoshi Nakamoto launched a new coin — Bitcoin. And since then, it holds the top spot in terms of history, popularity and capitalization. All other coins are altcoins, even if the name contains the phrase bitcoin. Bitcoin’s primary task is to be a medium for exchanging the value of funds. Many projects were created precisely in order to play the role of virtual money. These include Litecoin, Dash and Dogecoin.

There are many types of cryptocurrencies and currently their number oscillates around 21,000. For investors, such a large selection is undoubtedly beneficial. However, the assessment of whether the creation of another cryptocurrency inspired by a meme or other pop-culture event is justified remains with the users. On the other hand, collector tokens or coins issued by individual institutions or commercial companies have crowds of recipients and even fans.

Projects called DApps arise. They allow you to create smart contracts and decentralized applications. The coins that belong to this group are Ethereum, Solana and TRON.

Still others give access to financial services outside the banking system (the so-called DeFi) — credit handling, cryptocurrency exchange, saving.

Others would like to replace cash and ensure anonymity (Monero and Zcash).

NFT tokens are said to be collectable tokens. They give you the opportunity to have virtual assets that are unique and give you access to options not available to others.

And you cannot ignore stable coins whose rate is maintained at the level of the currency (assets) to which the token is linked.

But how do you know if a given token is valuable? When does its creation make sense?

Binance Exchange does project research on its own. It tests their suitability and if they do not meet the quality criteria, they are removed from the stock exchange. Generally, exchanges follow very strict rules, allowing new cryptocurrencies to enter the exchange. To protect their clients, they offer cryptocurrencies that are already well-established or that have great potential but are just starting out on the market. Key features are: security, ease of use, stable infrastructure, reliability and competitive fees.

However, there are many coins that die despite very good assumptions due to poor development, network absence, low trading volume or lack of quotation on the stock exchange. However, it is a natural process in the operation of the entire industry. The crypto industry is still under development. Innovative processes are carried out and we discover new ways of using cryptocurrencies. It seems that the market will remain the “strongest” as usual, who will be a valuable addition to the ecosystem.