Web3 – Cute Dogs and Magic Internet Money
First – cryptography + currency = cryptocurrencies.
Or just crypto.
As in, “I gotta buy some crypto”.
BTC or Bitcoin is the OG crypto that started it all back in ‘08.
Crypto is like digital cash. it can be used to buy and sell goods. And each type of crypto is usually accepted on a specific blockchain (network).
It’s kind of like traveling to a foreign country where only the local currency is accepted. It’s common to buy/sell/convert your crypto to use on different blockchains.
For example BTC or Bitcoin (crypto) can only be used on the Bitcoin network (a blockchain).
Or ETH or Etherium (another crypto) can only be used on the Etherium network (another blockchain). So far over 9,000 cryptocurrencies have been created (compared to the ~180 fiat currencies in circulation around the world today).
Crypto though, unlike fiat:
- Works in all geographic areas
- Isn’t owned or backed by a specific government
- Can be created by anyone (with a little technical knowhow)
Feeling nerdy? Check out CoinMarketCap. It lists all the top cryptos and their current value.
Some of the popular ones include: BTC or Bitcoin, ETH or Etherium, SOL or Solana, USDT or Tether, and DOGE or Dogecoin.
Oh and sometimes the name of the cryptocurrency (like ETH) and the blockchain it’s accepted on (like Etherium) are used interchangeably.
Don’t sweat it.
Okay. But why so many cryptocurrencies?
9,000 is a lot. Do we even need that many?
Probably not. But…
Each cryptocurrency and the blockchain it runs on have different use cases or features.
Some are faster (great for instant transactions). Some are more secure. And some offer more utility and support things like NFTs.
Here’s a few ways to mentally group most cryptocurrencies:
We can think about this group like digital cash. The most popular is BTC or Bitcoin. The price of 1 BTC in fiat (government-backed money) fluctuates. Sometimes a lot in a single day. Right now 1 BTC ≈ $36K USD.
These are like other cryptos, but they’re pegged to fiat. The most popular stable coin today is Tether or USDT. The price of 1 USDT = $1 USD. Always. That’s the stable part. The price never fluctuates.
This term is sometimes used to refer to any group of crypto other than Bitcoin. Or more generally newer, less established coins.
Yup, joke coins. The most popular is DOGE or Dogecoin. It’s based on the popular Doge internet meme which features Kabosu, the Shiba Inu below.
Dogecoin was created in 2013 to poke fun at Bitcoin. But it’s market cap is $18B USD today.
You can use a coin backed by a goofy looking dog to buy things on the internet. 🤷♂️
Here’s your takeaway:
Cryptocurrencies or crypto come in over 9,000 flavors, though most people will only need to own and use a few.
Cryptocurrencies aren’t backed by a specific government and their use isn’t restricted to specific geographic locations.
You can buy some crypto today and simply hold it as an investment (like any other asset class).