Bitcoin emerged in 2008 when a person or group known by the pseudonym “Satoshi Nakamoto” published a whitepaper entitled Bitcoin: A peer-to-peer electronic cash system.
Bitcoin is the first notable application of blockchain technology – an immutable and time-stamped ledger of transactions, distributed across all members of a network – which has now been applied across a whole range of use cases.
The blockchain underpinning Bitcoin allows holders to send and receive funds without the intervention of any third party intermediary, such as a bank or payment provider.
Ether (ETH) is the cryptocurrency that underpins Ethereum network, known colloquially as the “world computer”.
Launched in 2015, Ethereum took Bitcoin’s public blockchain model and added the ability to code automated agreements (called smart contracts) that execute automatically when a set of parameters are met.
This new blockchain network also introduced the concept of decentralized applications (Dapps), which make use of the distributed nature of the network, and it’s also the foundation on which the blossoming DeFi and NFT markets are built.
Ether is the fuel on which this whole operation runs, which means it has a deep pool of potential use cases. If you want to participate in the Ethereum ecosystem, purchasing ether could be a good place to start.
When it launched in 2017, Binance Coin (BNB) used the Ethereum network as a foundation, but has since become the native currency of the Binance Chain.
The coin is used to pay fees and make trades on Binance, the world’s largest cryptocurrency exchange. Users are incentivized to do so by the opportunity to secure discounts.
One quality that sets Binance Coin apart from is that Binance has committed to using 20% of its profits to buy back and destroy BNB tokens. This process is designed to restrict supply and boost value, and will continue until 100 million tokens (half the total supply) have been burned.
In September last year, Binance launched the Binance Smart Chain (BSC), which boasts many of the same smart contract and DeFi functionalities as Ethereum and is based around BNB. It’s also much faster than the Ethereum network.
However, while some have referred to BSC as an “Ethereum killer“, others have registered concerns about the centralized nature of the project, which is managed and overseen by a single entity: Binance.
Tether (USDT) differs from the other cryptocurrencies on this list in that it is not subject to the same levels of volatility.
As a fiat collateralized stablecoin, Tether is pegged against a stable asset. In this case, for every unit of Tether in circulation there is one US Dollar sitting in reserve, which means the price of the cryptocurrency maps the exact price of the fiat currency.
This consistency in value allows users to transact using Tether, content in the knowledge that purchases will have the equivalent dollar value the next day, or the next month.