Cryptocurrency is the digital currency which can be operated only online and it's name denotes that it utilizes encrypted code for verification during transaction. If we transact cryptocurrency it will be registered in a public ledger called blockchain. It's peer to peer system that can give full privileges for anyone from anywhere to transact.
Cryptocurrency is decentralized currency so that means it need not rely on any central regulatory authority to record transactions or to issue new units.The main merit of cryptocurrency is that it cannot be counterfeited since it is fully governed by cryptography.
Cryptocurrencies are categorized into five different types depending on the nature of it's usage. The five different types of cryptocurrencies are payment currencies, blockchain economies, privacy coins, utility tokens and stable coins.
Payment currencies:- The name itself directly represents that the currency are reserved only for payments.
Blockchain economies:- This supports us to create and maintain our digital assets in the form of tokens and also maintains decentralized applications in its platform rather than just making payments.
Privacy coins:- As the name suggests it is used maintain privacy for the wallet address of the owner and also secures the transactions confidential between sender and receiver for the security purpose.
Utility tokens:- It is the digital tokens that are assigned to all the cryptocurriencies within the blockchain platform used only for the blockchain based products.
Stable coins:- stable coins are the coins in trading that will have standarized market value which will not drop down and fluctuate. To prevent the risk factor of losing our invested money it is best for the investor to invest on stable coins such as Coin (USDC), Paxos (PAX), Gemini (GUSD), TrueUSD (TUSD), Tether (USDT), Dai (DAI), etc
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