If you were to ask someone how many different cryptocurrency coins exist in 2021, they may list off a selection of Bitcoin, Dogecoin, Ethereum, and a few other coins before giving up.
While these are among the most popular currencies, the reality is that this is just a small selection. Only a few coins ever make it into the mainstream discourse.
Here's the extent of the currency cryptocurrency market.
How many cryptocurrencies are there?
When the cryptocurrency boom first began, a huge number of people saw an opportunity to get rich by creating their own cryptocurrency. This led to a proliferation in the number of currencies in circulation, as more 'hashes' were added to the blockchain.
As of May 2021, there are 10,115 different cryptocurrencies listed, with that number rising daily. As CoinMarketCap reports, the total market cap for all cryptocurrencies is a whopping $1,559,079,159,418. However, of this $1.5tn, over 60% comes from Bitcoin and Ethereum alone. Only around 1600 of the different currencies have a total market cap of over $1,000,000.
The names and purposes of these coins vary, such as the existence 'Meme Coins' that include Banano, Loser Coin, Shiba Inu coin.
Of course, it can be easy to scoff at the less well-known cryptocurrencies, but this was previously the case for many of the most popular currencies today, too. Dogecoin has a market cap of over $40bn, but this was just $24m in January 2021 and only $326m at the start of November 2020 (via BitInfoCharts).
What are the different types of cryptocurrency?
There are a variety of different ways to define and separate cryptocurrencies. The simplest is to split these into three categories: Bitcoin, Altcoin, and Tokens.
Bitcoin is a self-explanatory category. As the most popular and best-known cryptocurrency, it is partially responsible for the current nature of the cryptocurrency market.
The digital currency then spawned what are known as 'Altcoins'. These coins are seen as alternatives to Bitcoin (hence the name), with many of them being very similar to Bitcoin in every aspect. Litecoin, Dogecoin, Ripple, and Monero are all examples of Altcoins.
However, some Altcoins are much different from Bitcoin, using different algorithms to confirm transactions on the blockchain, for example. Bitcoin uses a Proof-of-Work (PoW) algorithm, while Cardano uses a Proof-of-Stake (PoS) algorithm - seen as the more environmentally friendly option.
Cryptocurrencies are not bound to one algorithm, however, as seen by Ethereum's switch to PoS from PoW in April 2021.
The final category is Tokens. These are cryptocurrencies that don't have their own blockchain but sit on top of an already-existing blockchain. The ERC-20 token and Shiba Inu coin, for example, are built on the Ethereum platform. Fan Tokens such as the FC Barcelona Fan Token are also built on Ethereum. Alternatively, the Man City Fan Token is on the Chiliz blockchain.
NFTs are also considered cryptocurrency tokens.