The cryptocurrency landscape is hugely diverse. With few barriers to overcome, pretty much anyone that understands blockchain technology can launch their own cryptocurrency if they are so inclined. There are currently more than 1600 cryptocurrencies listed on major, middle-sized and specialist exchanges.
Of those cryptocurrencies and digital tokens, it is fair to say the number that has any genuine significance can be reduced down to double figures. That smaller group can be boiled down again to the cryptocurrencies that are traded enough to have real liquidity or are regularly used to pay for use of a blockchain platform with utility tokens. In this category, we can probably include somewhere between 20 to 30 different digital currencies.
Since the start of the cryptocurrency phenomenon, the two most popular cryptos have been Bitcoin and Ethereum (Ether). In the last few years, Ripple XRP has cemented its position within the top 3. Ripple XRP even briefly exceeded Ethereum’s market capitalisation in September 2018 to become the second most popular cryptocurrency.
Beyond Bitcoin, Ethereum and Ripple XRP, there are several more popular cryptocurrencies but their value and popularity tend to ebb and flow. The uniquely-created Crypto 10 Index, which is made up of the most popular cryptocurrencies at any particular point in time, can also be traded.
One way to ascertain which are the most traded cryptocurrencies is to look at those offered as CFDs on mainstream trading platforms such as Plus500. Below are the cryptocurrencies Plus500’s traders are most interested in1.
A quick online search would suggest that the most popular cryptocurrencies on the market today are:
They are all quite different, so let’s take a quick look at their key qualities.
Bitcoin is considered the original crypto, and its launch in 2009 is what started the whole cryptocurrency movement. Bitcoin - and the blockchain technology on which it operates - was invented by an individual or group of individuals operating under the pseudonym Satoshi Nakamoto. Bitcoin was put forward as an alternative to the fiat monetary system. The true identity of Satoshi Nakamoto has never been revealed.
In the Bitcoin whitepaper, Nakamoto argued that a fiat monetary system controlled by central banks and a small number of financial institutions led to a centralised wealth and power and made social and financial mobility difficult. Ordinary people’s savings were eroded through inflation, largely as a result of central banks’ money printing.
Bitcoin solved that problem by fixing the number of units ever issued, thereby preventing inflation caused by money printing. Bitcoin’s peer-to-peer blockchain technology meant it didn’t need financial institutions to facilitate transactions and verify ownership.
Bitcoin is still by far the most popular cryptocurrency and its price movement has a strong impact on the rest of the crypto market.
Ethereum is historically the second most popular cryptocurrency however it is very different from Bitcoin. Ethereum is actually the name of the blockchain platform and Ether is the name of the cryptocurrency. Ethereum is the blockchain platform for ‘smart contracts’.
They can also be considered as defined ‘rules’ from which many different applications, or Dapps – decentralised applications - can be created from. Ethereum Dapps range from games to Initial Coin Offerings (ICOs), which are the cryptocurrency world’s equivalent to crowdfunding or IPOs.
While other smart contract platforms have been launched since Ethereum, each claiming to offer more sophisticated blockchain technology, the original blockchain has retained its position as the most utilised.
While Bitcoin is intended as an alternative to traditional fiat currencies, the purpose of Ether (besides being traded as an asset) is to pay for use of the Ethereum platform. It’s known as a ‘utility’ cryptocurrency.
Ripple XRP is another ‘utility’ coin. Its blockchain platform is set up to facilitate cross-border transfers of fiat currency more efficiently. Closely connected to and supported by a number of banks from its beginning, Ripple XRP is often regarded as the ‘establishment’ cryptocurrency.
The number of transfer services using Ripple’s platform has gradually grown over the years and there is a genuine possibility that it will become part of the traditional financial system.
Litecoin is another potential fiat alternative and a prominent rival for Bitcoin. Its creators hope Litecoin will eventually be used to pay for everyday goods and services. Litecoin has positioned itself as a more practical and technologically superior alternative to Bitcoin. Litecoin transactions can be confirmed by the P2P network significantly quicker than Bitcoin transactions.
In theory, this could make Litecoin more attractive for merchants, but with ‘real-life’ cryptocurrency transactions still hugely limited, Bitcoin’s more established ‘brand’ keeps it well out in front as the fiat alternative cryptocurrency of choice.
Like Ethereum, NEO is a smart contract and Dapps platform. Released in 2014, NEO’s ambition was to improve upon Ethereum by offering approximately the same utility through a technologically more sophisticated example of blockchain technology.
There are many who argue NEO is the technically superior platform to Ethereum but, as is the case with Litecoin and Bitcoin, the latter’s more established position has helped it maintain a larger market share.
IOTA is a unique cryptocurrency that is based on the Directed Acyclic Graph (DAG) structure, created to work with Internet of Things (IoT) devices. IoT facilitates feeless microtransactions involving connected devices, and it also helps maintain their data integrity. More recently, IOTA jumped to the top of the list of most traded cryptocurrencies and appears to have a big future, with IoT technology becoming the standard.
Anyone interested in getting involved in the dynamic cryptocurrency market by trading CFDs on the most popular cryptocurrencies on the market can do so using Plus500’s CFD trading platform. All leading cryptocurrency-to-dollar pairs are available on the platform, as are crypto cross pairs and the popular Crypto 10 Index.
1A screen capture of the Plus500 platform, as of August 2019. Illustrative prices.