Market capitalization, commonly known as market cap, refers to the total market value in dollars of any cryptocurrency. To calculate market cap, take the existing dollar value of 1 unit of cryptocurrency, and multiply it by the total number of units there are on the market.
In the traditional finance world, market cap represents the amount of money one would pay to buy up all of the company's shares. In crypto, market cap is used to determine the popularity of the cryptocurrency and acts as one of the rough gauges for riskiness.
Bitcoin is the first known cryptocurrency to exist, and until today is the most popular cryptocurrency with the largest market share in the crypto space.
It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet.
It was created anonymously by a person going by the pseudonym of Satoshi Nakamoto, who first published a whitepaper titled Bitcoin: A Peer-to-Peer Electronic Cash System in 2008.
Bitcoin was created with the intention of solving the problems of modern money, including the problem of double-spending. Satoshi stated that the reason for creating Bitcoin is to remove the need for third-party intermediaries that are required to conduct traditional digital monetary transfers.
There will ever only be a maximum supply of 21,000,000 BTC.
Ethereum is an open-source, blockchain-based distributed computing platform and operating system that has smart contract functionality. Its native cryptocurrency, ether, has the second-largest market cap in the crypto space.
Ether is the cryptocurrency generated by the Ethereum platform, used as a reward to miners for computations performed to support the platform. It is the only currency accepted in the payment of transaction fees on Ethereum.
Ethereum was first described in a whitepaper published in 2013 by Vitalik Buterin, a programmer and co-founder of popular Bitcoin Magazine.
Ethereum was created to allow developers to build on top of the blockchain. It enables smart contracts and decentralized applications (ĐApps) to be built and run without interference from a third party.
As of April 2020, there is a circulating supply of more than 110,493,061 ETH. Ethereum caps its new limit to an additional 18 million ETH per year, regulating its distribution on a yearly basis. It is worthwhile noting that it does not currently have an upper limit for maximum supply.
In April 2020, Ripple’s native cryptocurrency XRP ascended to the position of having the third-largest market capitalization.
Ripple is a real-time gross settlement system, currency exchange, and remittance network. It operates on an open-source peer-to-peer decentralized platform that allows for seamless transfer of money in any form, whether USD, Yen, litecoin, bitcoin, or even air miles. Its digital currency, XRP, acts as the bridge currency to other currencies.
Ripple was created by Ripple Labs, Inc, which is today the only enterprise blockchain company with products in commercial use. The company was founded in 2012 and is based in San Francisco, California.
According to the company, Ripple aims to change the financial system from within:
“We are working with regulators, governments, and central banks, not against them, to improve the way the world moves money.” It is worth noting that Ripple’s global payments network includes over 300 customers across 40+ countries and six continents.
There will only ever be a maximum circulating supply of 99,993,093,880 XRP.
What is Tether? Tether belongs to a new breed of cryptocurrencies called stablecoins, that, as its name suggests, aims to keep cryptocurrency valuations stable. Tether is pegged against the US dollar and maintains a 1-to-1 ratio with the US dollar in terms of dollar value.
Tether was issued by Tether Holdings Limited, and shares the same CEO as popular cryptocurrency exchange Bitfinex.
It is worth noting that Tether is shrouded in controversy: especially the company’s inability to provide a promised audit showing adequate reserves backing tether tokens, their alleged role in manipulating the price of bitcoin, and their hazy financial relationship with Bitfinex.
Tether was created to build the bridge between traditional fiat currencies and cryptocurrencies, thus offering stability, transparency, and minimal transaction charges to users. Being less volatile, it would also be used as a medium of exchange and a store of value.
There is a maximum supply of 6,350,000 USDT.
What is Bitcoin Cash? Bitcoin Cash is a spin-off of Bitcoin that was created in 2017. Bitcoin Cash is mainly used as a payment system. It also allows for faster transaction times and lower transaction fees than its parent, Bitcoin.
Roger Ver is sometimes credited as the co-creator of Bitcoin Cash.
A hard fork of Bitcoin essentially created Bitcoin Cash.
What is a hard fork?
A hard fork is the only existing method to fundamentally update Bitcoin software. During a hard fork, developers split the network and essentially create a new blockchain with altered rules. Both the original and the forked version of the cryptocurrency have identical blockchains, right up to the point where the split occurs. After the point of the split, the two networks and cryptocurrencies exist independently of each other.
The overall goal of Bitcoin Cash is to increase the number of transactions that can be processed, with the aim of competing with the volume of transactions that industry giants like PayPal and Visa can currently process.
What is Litecoin?In technical details, Litecoin is nearly identical to Bitcoin. It is one of the earliest bitcoin alternatives to have been created.
Litecoin was founded by Charlie Lee, who released Litecoin via an open-source client on GitHub on October 7, 2011. He is an ex-Google employee and former Engineering Director at Coinbase.
“I wanted to create something that is kind of silver to Bitcoin’s gold,” said Charlie Lee. Litecoin was created with the aim to improve on bitcoin, such as providing better transaction speed performance and allow for mini-transactions, for instance.
There will ever only be a maximum supply of 84,000,000 LTC.