Discover what cryptocurrency is, how it works, and its uses—from global transactions to asset trading. Learn about wallets, cryptocurrency market capitalization, and the top cryptocurrencies in this comprehensive guide.
What is cryptocurrency and how to use it?
Cryptocurrency is a digital asset, as well as an independent payment and money transfer system. Its main advantage is the ability to anonymously and quickly transfer funds to anywhere in the world with a minimum commission. In addition, cryptocoins can be used for the following purposes:
- mutual settlements within a separate project;
- payment for transactions on crypto exchanges;
- purchase of services and goods;
- making a profit from the growth in the value of crypto assets;
- trading – making a profit from active trading on stock exchanges;
- preserving capital from inflation.
To carry out transactions, cryptocurrency owners use special wallets. Storing digital currency in them is similar to storing cash in a real wallet. But when choosing them, it is worth considering the features and level of security.
Table: “Types of cryptocurrency wallets”
| Wallet type | Application | Advantages | Flaws | Varieties |
| Hot | Transfer of small amounts, purchase of goods | Easily created on crypto exchanges and other platforms. Quickly restored if you lose your smartphone. Provides constant connection to the blockchain. | Vulnerability to online hacker attacks | . online; . mobile; . desktop programs |
| Cold | Storage and transfers in large quantities | They are more secure because they only connect to the network to perform crypto transactions. | Wallets on external drives can get lost or stole | . physical media; . hardware flash storage; . desktop programs |
The safest are hardware and software wallets. Hardware wallets are portable storage devices that look like flash drives. They generate private keys, seed phrases, and other security passwords to confirm transactions with cryptocurrency.
The most reliable devices are Trezor, Digital Box, Ledger, Cool Wallet and KeepKey. Software (desktop) wallets are special applications for installation on a smartphone, tablet, computer.
They are downloaded from specialized sites. Desktop programs are “thick” – full versions and “thin” – shortened versions. Among the most secure software, it is worth noting Exodus, Coinomi, Jaxx, Bitcoin Core applications and Ethereum Wallet (Mist).
After installing the wallet, you can start buying and other operations with crypto assets. To work with some “coins” you need to download the blockchain to your PC. Users buy “crypto” on crypto exchanges or through special exchangers.
What is cryptocurrency market capitalization?
Before buying a crypto asset, investors evaluate its capitalization — market value. The indicator is calculated based on the current price and the number of assets.
For example, on April 1, 2022, the 19 millionth Bitcoin was mined . The cost of 1 BTC on 04/01/2022 was $46,297. The calculation of the total capitalization on this day looks like this:
19,000,000 × $46,297 = $879.6 billion.
The total capitalization indicator is an estimate and does not always take into account the exact number of coins. The reason is that some BTC do not participate in circulation, for example, coins of users who have lost their wallet passwords. Capitalization changes daily, as the market price of crypto assets changes.
Total cryptocurrency market capitalization
Capitalization is one of the important parameters for assessing the risks and attractiveness of an asset. The higher this indicator, the lower the volatility — price fluctuations. Bitcoin has the largest capitalization.
To move its rate, billions of purchases or sales are required. To change the rate of coins that have recently entered the market, a transaction of several tens of thousands of dollars is enough. In addition to the capitalization of a specific crypto asset, investors track the value of the entire market, that is, all coins.
At the beginning of 2022, the entire crypto market was worth $2 trillion, and in 2021 it exceeded the $3 trillion mark. At the same time, the growth rate of the crypto market sometimes reached 600-1000% per year. As you know, a growing market is the most attractive for investment.
Top 10 cryptocurrencies by capitalization
Bitcoin is the leader among cryptocurrencies in terms of capitalization. Ethereum is currently in second place, and Tether is in third. The TOP-10 cryptocurrencies by capitalization are dynamic and constantly changing. Let’s consider the rating by indicators as of April 1, 2022.
- Bitcoin (BTC) — $879.6 billion. Created in 2009, safe, protected from fraudsters, works on the blockchain. In May 2016, Bitcoin cost about $500. As of 04/01/2022, its price exceeded $46,300. The increase over 6 years was 9000%.
- Ethereum (ETH) — $415 billion. Known as a cryptocurrency and blockchain platform. It is actively used in the development of smart contracts, applications, NFT tokens. From 04/01/2016 to 04/01/2022, the Ethereum rate increased from $11 to $3450, an increase of 31000%.
- Teaser (USDT) – $79 billion. Tether is a hybrid coin or stablecoin backed by the US dollar. Its rate is more stable, as it is closer to the dollar’s face value.
- Binance Coin (BNB) — $68 billion. Binance Coin was created for trading and paying fees on the Binance crypto exchange , but is now freely circulating. In 2017, it cost $0.10. In early April 2022, it was trading at $445. The rate increase over 5 years was 445,000%.
- US Dollar Coin (USDC) — $53 billion. Like Tether, USD Coin is backed by dollars. The rate of 1 coin is equal to the rate of 1 US dollar. USDC operates on the Ethereum blockchain and is suitable for global transactions.
- Solana (SOL) — $44.5 billion. The coin is designed to work with decentralized finance (DeFi), applications (DApps), and smart contracts. In 2020, after the launch, Solana cost $0.77. As of 04/01/2022, its value was $136, which means an increase of more than 17,500%.
- XRP — $40 billion. The Ripple coin can be used to facilitate the exchanges on various types of currencies. At the beginning of 2017, XRP cost $0.006. As of 04/01/2022 — $0.83. The price growth was more than 13700%.
- Cardano (ADA) — $39 billion. Cardano functions in the same way as Ethereum, is used for smart contracts and applications. It is known for implementing a method to speed up Proof-of-Stake operations. In 2017, it cost $0.02, and on 04/01/2022 — $1.17. Growth — 5750%.
- Terra (LUNA) — $37.5 billion. Terra is a blockchain payment platform. The Luna coin powers the Terra platform and is used to obtain stablecoins. At the beginning of 2021, Luna was trading at $0.64. By April 2022, it had grown by 16,400% to $106.
- Avalanche (AVAX) — $26 billion. Avalanche is a blockchain platform that supports smart contracts based on the AVAX token. From 12.07.2020 to 01.04.2022, the coin grew by 2000%, from $4.63 to $97.58.
Conclusion:
Cryptocurrency is revolutionizing finance by offering secure, decentralized, and global payment solutions. From buying goods to trading for profit, its versatility makes it an attractive option for users and investors alike. Understanding wallet types, market capitalization, and the top cryptocurrencies can help navigate this dynamic market confidently. As the crypto space evolves, staying informed ensures you make the most of its opportunities.
