Why Are There Different CryptoCurrencies ?

Following the creation and introduction of Bitcoin, numerous scientists began exploring the development of substantial applications for cryptocurrencies. The growing public acceptance and willingness to adopt Bitcoin further fueled the momentum behind this notion. As a result, today there exist over 10,000 official and unofficial cryptocurrency projects, showcasing the widespread interest and innovation in this field. Meanwhile, each project is driven by a specific objective and aims to innovate within a particular aspect of blockchain technology. More than 120 different categories for cryptocurrencies are listed on Coinmarketcap, which is known as a credible website in the field of cryptocurrencies.

A few of these categories are related to platform cryptocurrencies. These digital currencies enable the creation of decentralized applications and facilitate the registration of smart contracts. Hence, many projects are established on their respective platforms, fostering the development of their ecosystems. Among these cryptocurrencies, notable examples include :

• TonCoin ecosystem

• Solana ecosystem

Digital currencies can be distributed through various methods, which we'll briefly explore below :

• Initial Coin Offering (ICO) : In this approach, investors support the digital currency developers by purchasing the digital currency during its initial stages of development.

• Mining Reward : With this method, miners employ their computing power to authenticate network transactions and earn new digital currency as compensation.

• Grant : In this approach, digital currency can be awarded as a grant to specific individuals or organizations.

After the digital currency is issued, its value is determined by various factors, including :

• Supply and Demand : The worth of a digital currency depends on its supply and demand dynamics. When there's increased demand for a digital currency coupled with limited supply, its value tends to rise accordingly.

• Utility : The worth of a digital currency is influenced by its practical applications. The greater the range of functions a digital currency serves, the greater its value.

• External factors : Including news updates and political and economic occurrences, can also impact the value of digital currencies.

Throughout this tutorial, our focus was on delving deeper into cryptocurrencies, a form of digital currency. We explored the distinctions between cryptocurrencies and traditional banking systems to gain a better understanding of their unique characteristics and functionalities. Next, we explored the reasons behind the existence of various cryptocurrencies and delved into a concise overview of how cryptocurrencies are supplied and priced. And we went one step ahead with this wonderful world where anyone can freely operate.