I’ll admit it. When I first started looking into cryptocurrency, I thought it was just Bitcoin and maybe a handful of other coins I’d heard about in the news. But once I began exploring where to invest, I realized there are thousands of cryptocurrencies out there, each claiming to solve a different problem or reinvent how money works.

If you are also in the same boat, trying to untangle the difference between coins, tokens, altcoins, and stablecoins, or wondering whether Dogecoin is serious business or just an elaborate meme, you’re in the right place.

In this guide, I’ll break down the main types of cryptocurrency, explain their pros and cons, and share real examples, from Bitcoin and Ethereum to NFTs and stablecoins pegged to the dollar.

Whether you’re investing via a cryptocurrency exchange, building dApps, or simply crypto-curious, you’ll leave with a clear picture of what makes each type unique and why it all matters in 2025.

Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency involves significant risk, and you should always do your own research or consult with a qualified professional before making investment decisions.

What are the major types of cryptocurrencies? 

Today, thousands of cryptocurrencies are available, with a recent Forbes Advisor article citing over 22,000.  When most people think about cryptocurrency, they picture Bitcoin or maybe Ethereum. But in reality, the crypto universe is much bigger and a lot more nuanced.

At a high level, you can think of cryptocurrencies as falling into four main categories:

• Coins: Digital currencies that run on their own independent blockchains. Bitcoin is the original coin, but others like Litecoin and Ether, built on Ethereum blockchain also fit here.
• Tokens: Built on existing blockchains and often used to represent assets, enable access to services, or power decentralized apps.
• Stablecoins: Cryptocurrencies designed to maintain a stable value by pegging to fiat currencies like the U.S. dollar.
• Altcoins: A catch-all term for all cryptocurrencies other than Bitcoin, many of which offer unique features or improvements.

If you’ve ever felt confused about how coins, tokens, and altcoins overlap, you’re not alone. The lines can get blurry. But this framework will help you quickly figure out where a cryptocurrency fits and what it’s designed to do.

Below, each category of these cryptocurrencies are explained in detail. 

1. What are coins? 

Coins are digital currencies that can operate on their own independent blockchain. For example, BTC and ETH each have their respective blockchains. Similar to traditional currencies, these coins also store value.

They were the first form of cryptocurrency, designed primarily to act as money you can send, receive, or store without relying on a bank or central authority. They are fungible, portable, and limited in supply, making them comparable to physical forms of medium exchange. 

In other words, if a cryptocurrency operates on its own blockchain and has value primarily as a currency or utility token within that network, it’s considered a coin.

People who participate in cryptocurrency networks use coins as a primary form of digital money to buy goods and services and to transfer value amongst each other. In addition to coins with fluctuating value, stablecoins in cryptocurrency exist to provide a less risky option. 

How coins work

Each coin has its own blockchain, a decentralized ledger where transactions are recorded, verified, and secured through cryptography. Coins typically have these characteristics:

• Native network: They’re integral to the blockchain itself.
• Peer-to-peer transactions: Users can transfer value without intermediaries.
• Incentives and security: Coins often reward miners or validators who help secure the network.

While the original idea was digital cash, many coins have evolved into ecosystems with smart contracts, decentralized apps, and additional functionality.

Pros of coins

• Generally more established and widely adopted
• Often more secure due to larger, decentralized networks
• Greater liquidity on major exchanges
• Well-documented technology and community support

Cons of coins

• Some networks are slower and less scalable
• High transaction fees on congested networks (for example, Ethereum)
• Limited functionality beyond payments for some coins
• Regulatory scrutiny in certain jurisdictions.

Investment considerations

Before investing in coins, consider:

• Purpose: Is the coin designed as a store of value, a utility token, or both?
• Network strength: How large and active is the user base?
• Scalability and fees: Can the blockchain handle growth without slowing down or becoming expensive?
• Regulatory environment: Some coins face legal challenges or bans in certain countries.

Coins are often the first stop for new investors because they’re easier to research and typically have more established track records. However, they still carry risk, and it’s essential to understand how each blockchain operates before you buy in.

Examples of the most popular coins: Top 5 cryptocurrencies by popularity and adoption

Here are some of the most widely recognized cryptocurrencies that operate as coins. Each of these runs on its own blockchain, has a large user base, and plays a major role in shaping the crypto market today.

Note: All the prices and market capitalization data are from Coinmarketcap.com. Cryptocurrency prices are highly volatile. These figures reflect data as of July 14, 2025, and may have changed significantly since. Also, Tether is the fourth-largest cryptocurrency based on market capitalization, but is included under the stablecoins section since it is pegged against US dollars. 

1. Bitcoin (BTC)

Bitcoin is undeniably one of the most well-known names in crypto. An anonymous person or group of people named Satoshi Nakamoto created BTC in 2009, and it was the first cryptocurrency available. BTC operates without governing authorities and instead uses peer-to-peer transfers on a blockchain, a secure, distributed ledger. 

Price: $120,195.80

Market capitalization: $2.3 trillion

2. Ether (ETH)

Programmer Vitalik Buterin created Ethereum in 2013 and launched it in 2015. Ethereum is a blockchain, and Ether is the name of the native cryptocurrency on the Ethereum network. It is used to pay transaction fees, incentivize network validators, and serve as a store of value within the Ethereum ecosystem.

Price: $3,021.2

Market capitalization: $364 billion

3. XRP (XRP)

David Schwartz, Jed McCaleb, and Arthur Britto developed and launched the XRP Ledger in 2011 and 2012. XRP is an open-source cryptocurrency that operates on the XRP Ledger (XRPL). A key distinguishing aspect between XRP and other cryptocurrencies is that XRP is pre-mined with a maximum supply of 100 billion tokens.

Businesses and developers use the XRP Ledger to create solutions and use cases across industries, including infrastructure, developer tooling, gaming, payments, sustainability, and more. 

Price: $2.97

Market capitalization: $176 billion

4. Binance Coin (BNB)

Changpeng Zhao (CZ) launched Binance Coin (BNB) in 2017. It is a cryptocurrency people can trade on Binance, one of the largest crypto exchanges in the world. The Binance blockchain is built on Ethereum and uses BNB as its native token. It was initially created as a token for discounted trading fees but has since expanded into paying transaction fees on Binance.com.

Some people also use it for payments, to book travel accommodations, or to exchange for other forms of cryptocurrency. 

Price: $693.38

Market capitalization: $96.5 billion

5. Solana (SOL)

Solana is a newer cryptocurrency that Solana Labs launched in 2020. Solana is a blockchain that hosts decentralized and scalable applications similar to Ethereum. It differs from Ethereum in using a unique hybrid proof of stake and proof of history consensus model for faster transactions. This model works to process many transactions quickly, similar to a large corporation like Visa, without the same centralization. 

Price: $165

Market capitalization: $88 billion

2. What are tokens?

Tokens are digital assets created on top of existing blockchains rather than operating on their own independent networks. In simpler terms, if a cryptocurrency doesn’t have its own blockchain and instead relies on someone else’s infrastructure (like Ethereum), it’s considered a token.

While coins primarily serve as money, tokens can represent almost anything, access to a service, ownership in a project, voting rights, or even real-world assets. People commonly use crypto tokens to fund projects, representing an investor’s stake. 

How tokens work

Tokens are created through smart contracts, that is, self-executing code that runs on a blockchain. The most common platform for tokens is Ethereum.

Because tokens don’t require a separate blockchain, they’re generally easier and faster to issue. This is why thousands of crypto projects have launched tokens instead of building their own networks from scratch.

Types of tokens

Tokens can represent various things beyond a simple currency:

• Utility tokens: These grant access to specific services or features within a platform or decentralized application (dApp). For instance, Basic Attention Token (BAT) is used in the Brave browser for advertisers to pay for services.
• Security tokens: Represent ownership or a stake in an underlying asset or company. They function similarly to traditional securities like stocks and are subject to regulation.
• Governance tokens: These grant holders voting rights on proposals related to the development and future of a platform or protocol. Uniswap (UNI) is an example of a governance token.
• Non-fungible tokens (NFTs): These are unique and indivisible digital assets that prove ownership of items like digital art, music, or collectibles. Each NFT has a unique identity and cannot be replaced by another.
• DeFi tokens: These are the backbone of Decentralized Finance platforms, enabling users to access services like lending, borrowing, and trading without intermediaries. Examples include Aave (AAVE) and Maker (MKR).

Pros of tokens

• Easier and faster to create compared to launching a coin and blockchain
• Flexible. It can represent almost any kind of asset or utility
• Widely adopted standards (like ERC-20) make them highly interoperable

Cons of tokens

• Depend on the security and stability of the host blockchain
• Regulatory scrutiny, especially for tokens considered securities
• Some tokens have unclear value propositions or limited real-world use

Investment considerations  

Before investing in tokens, consider:

• Purpose: Is the token meant for payments, governance, or something else?
• Backing and value: Is it tied to real assets or purely speculative?
• Regulation: Some tokens may be classified as securities, which can affect trading and compliance.
• Liquidity and adoption: Are there enough exchanges and users to support buying and selling?

Tokens can unlock powerful use cases, from decentralized finance to digital art, but they also carry unique risks. Always research the project team, tokenomics, and long-term vision before committing funds.

Examples of tokens in real-world

Here are a few well-known tokens and what they’re used for:

Chainlink (LINK)

Chainlink is a token that powers a decentralized oracle network. Blockchains can’t access real-world data on their own, so Chainlink connects smart contracts to external information like asset prices or weather reports. LINK tokens pay the network operators who provide and verify this data to keep decentralized apps accurate and reliable.

Price: $15.33

Market capitalization: $10.4 billion

Non-fungible tokens

NFTs are unique tokens used to prove ownership of digital items. Think artwork, music, videos, or collectibles. Unlike Bitcoin or other cryptocurrencies, each NFT is one of a kind. When you buy an NFT, you own a certified record on the blockchain showing it’s authentic and uniquely yours.

“The Merge” by Pak is the most expensive NFT ever sold, which got a mind-blowing $91.8 million in December 2021.

Basic attention token (BAT)

BAT is designed to improve online advertising. It’s built into the Brave browser, which blocks traditional ads but lets you choose to see privacy-friendly ones. When you do, you earn BAT tokens as a reward for your attention. You can use BAT to tip websites and creators or exchange it for rewards.

Price: $0.14

Market capitalization: $220 .1 million 

3. What is a stablecoin? 

Stablecoins are cryptocurrencies designed to keep their value stable, typically by pegging their price to a reserve asset like the U.S. dollar, euro, or even gold. Unlike most coins and tokens that can swing wildly in value, stablecoins aim to offer predictability and less volatility.

They combine the benefits of crypto like fast transactions, 24/7 availability, and transparency, with the familiarity and relative steadiness of traditional currencies.

How stablecoins work

Stablecoins achieve their price stability in a few ways:

• Fiat-collateralized: Backed 1:1 by reserves of fiat currency held by a company or organization. For every stablecoin issued, an equivalent dollar (or euro) is supposedly kept in reserve.
• Commodity-backed: Pegged to the value of commodities like gold, with corresponding reserves held in vaults.
• Crypto-collateralized: Backed by other cryptocurrencies held in smart contracts. To account for volatility, they are often over-collateralized.
• Algorithmic: Use software algorithms to expand or contract supply automatically to maintain their target price. These are generally more experimental and carry higher risk.

Most popular stablecoins today are fiat-collateralized and maintain their peg by ensuring each token represents a claim on a real-world reserve.

Pros of stablecoins

• Less price volatility compared to other cryptocurrencies
• Useful for trading and storing value between transactions
• Enable payments in crypto without worrying about big swings in value
• Often faster and cheaper to transfer than traditional bank payments

Cons of stablecoins

• Centralized stablecoins depend on trust in the issuing company’s reserves
• Regulatory scrutiny is increasing as stablecoins grow in popularity
• Algorithmic stablecoins can fail to maintain their peg under stress

Investment considerations

While stablecoins are designed to maintain a stable price rather than appreciate like other cryptocurrencies, they have become one of the fastest-growing segments of the crypto market. Many investors use stablecoins as part of their overall strategy:

• Liquidity: Traders use stablecoins to enter and exit positions quickly.
• Payments: Businesses can accept stablecoins for faster settlements.
• Yield: Some platforms offer interest on stablecoin deposits.

Before using stablecoins, it’s smart to look into how they’re backed and whether their reserves are audited and transparent.

Examples of stablecoins

Here are some of the most widely used stablecoins you’ll come across in the crypto market.

Tether (USDT) 

Reeve Collins, Craig Sellars, and Brock Pierce founded Tether, a project initially called realcoin, in 2014. Tether is a stablecoin or cryptocurrency that pegs its value to an external fiat currency. For example, Tether is pegged to the value of the U.S. dollar at a 1:1 ratio. Tether also supports the euro (EUR), Mexican Peso (MXN), and offshore Chinese yuan (YNH).

Like other digital currencies, Tether can move across blockchain networks, but it theoretically offers more pricing stability given its 1:1 peg to a government-issued currency. To reduce volatility, Tether couples the innovative nature of blockchain with the stability of fiat currencies. 

Market capitalization: $159.5 billion

U.S. Dollar Coin (USDC)

A consortium co-founded by Circle called Centre launched USDC in 2018 as a joint venture between Circle and Coinbase. Like Tether, the USDC is a fully regulated stablecoin in a 1:1 ratio with the U.S. dollar. It offers the speed and security of blockchain technology while maintaining a price for stability. 

Market capitalization: $63.3 billion

4. What are altcoins?

The term altcoin simply means “alternative coin.” In other words, every cryptocurrency that isn’t Bitcoin falls into this category. While that sounds broad (and it is), altcoins exist because developers wanted to improve on Bitcoin’s technology or explore entirely new ideas.

Some altcoins try to be better digital money, while others power smart contracts, decentralized apps, or unique use cases like privacy and faster transactions.

Many of the token types listed above, like stablecoins and DeFi tokens, fall under the altcoin umbrella.

How altcoins work

Altcoins can:

• Run on their own independent blockchains
• Be forks (modified versions) of existing coins
• Offer specialized features (like improved scalability or privacy)

Many altcoins use similar blockchain principles as Bitcoin, namely, distributed ledgers, peer-to-peer transactions, and cryptographic security, but with their own tweaks and innovations.

Pros of altcoins

• Often offer unique features and improvements over Bitcoin
• Enable a wide range of applications beyond payments
• Can provide early access to new technologies and ecosystems

Cons of altcoins

• Many projects have low adoption or fail over time
• Higher volatility and risk compared to more established coins
• Regulatory uncertainty in some regions

Investment considerations

Before buying altcoins, consider:

• Use case: What problem does the project solve?
• Team and development: Is there an active community and roadmap?
• Liquidity: Is it easy to buy and sell the token?
• Volatility: Many altcoins can swing dramatically in price.

Altcoins can be exciting because they drive innovation, but it’s important to research each project carefully and understand the risks before investing.

While most cryptocurrencies fit neatly into the four categories mentioned above, one more group of altcoins deserves special mention: meme coins. Let’s examine what makes meme coins unique and why they’ve become such a phenomenon.

5. What are memecoins? 

Memecoins are altcoins that started as jokes or were inspired by internet memes but gained popularity thanks to online communities, viral marketing, and celebrity endorsements. While some people buy them for fun or to be part of a movement, others see them as speculative investments.

These coins often have little or no intrinsic utility compared to more established projects, so they can be extremely volatile.

Pros of memecoins

• Many have strong, passionate communities that help build awareness and drive adoption.
• Lower price points often attract first-time crypto buyers who want to experiment without large investments.
• Viral marketing and internet memes can quickly boost visibility and trading volume.
• They bring a sense of fun and culture to crypto, making it more approachable.

Cons of memecoins

• Prices can be extremely volatile, rising and falling sharply on hype or social media trends.
• Most memecoins have limited or no utility beyond speculation
• Smaller markets can be more prone to manipulation and pump-and-dump schemes.
• Regulatory scrutiny may increase as memecoins attract more mainstream attention.

Investment considerations

While memecoins can attract attention and create a sense of community, it’s important to remember:

• Volatility: Prices can swing wildly in a short time, often based on internet trends.
• Risk: They can be fun to follow but are generally considered high risk compared to more established cryptocurrencies.

Examples of popular memecoins

The following are the most popular memecoins. 

Dogecoin (DOGE)

Jackson Palmer & Shibetoshi Nakamoto created Dogecoin in 2014. Dogecoin originally started as a joke and rapidly evolved into a top cryptocurrency. The website states, “Dogecoin is the accidental crypto movement that makes people smile!” It’s an open-source, peer-to-peer crypto that uses blockchain technology.

Price:  $0.19

Market capitalization: $28 .7 billion 

Shiba Inu (SHIB)

Created in 2020 as an “experiment in decentralized community building,” Shiba Inu is an Ethereum-based token inspired by the Doge meme. It grew rapidly through social media buzz and became one of the most traded tokens in the world for a time.

Price: $0.000012

Market capitalization: $7.63 billion

Emerging cryptocurrency trends in 2025

The crypto landscape changes fast. Even if you understand the main types of coins and tokens, it helps to keep an eye on the trends shaping where the market is heading next. Here are some of the most important developments to watch in 2025:

• AI-powered tokens: New projects are combining artificial intelligence and blockchain to automate decision-making, improve smart contracts, and enhance security.
• Eco-friendly cryptocurrencies: Amid growing concerns about energy consumption, more networks are using proof of stake and other green solutions to reduce their environmental impact.
• Decentralized finance (DeFi): DeFi platforms continue to expand, offering decentralized lending, borrowing, and trading without traditional intermediaries. Tokens that power these ecosystems are becoming increasingly important.
• Gaming and metaverse coins: As virtual worlds grow, cryptocurrencies that enable in-game purchases and ownership of digital assets are gaining traction. Expect more gaming-focused tokens and NFTs.
• Regulatory developments: Governments worldwide are working on clearer regulations for stablecoins, security tokens, and exchanges. New policies could impact which projects thrive and how investors participate.
• Cross-chain solutions: Technologies that make it easier for different blockchains to connect and share data are evolving quickly, opening up more seamless ways to use and trade cryptocurrencies across networks.

How should I choose the best type of cryptocurrency for trading and investing?

Choosing the best cryptocurrency for you requires a comprehensive approach and review of your circumstances. Consider the following when determining where you want to put your money:

• Founders and supporting teams: Learn about a cryptocurrency’s history and founders for a holistic background of the team’s track records. A transparent, experienced team with a strong track record can be a positive sign of credibility and long-term vision.
• Use case: Evaluate the cryptocurrency’s practical applications to determine whether there are strong use cases with long-term viability. Does it enable smart contracts, act as a payment system, or provide access to a specific service? A clear, practical use case increases the chances a project will stay relevant over time.
• Security: Review the history of cryptocurrencies to understand previous security breaches or issues. A history of strong security practices and timely fixes can indicate a more trustworthy project.
• Liquidity: Determine how easy it is to trade digital assets into fiat currency. High liquidity means you can quickly convert your holdings back into fiat currency or other assets when you need to.
• Market capitalization: Understanding the market cap, or the total number of mined coins multiplied by the price of a single coin, can help you determine how stable a cryptocurrency might be. Market cap. It can give you a sense of a cryptocurrency’s relative size and stability. Larger market caps often suggest more established projects, while smaller caps may carry higher risk—and potentially higher reward.

Top cryptocurrency exchanges 

Choosing a reliable exchange is one of the most important steps in trading or investing in cryptocurrency. G2 gathers thousands of user reviews to evaluate which exchanges offer the best experience. Here are the top 10 platforms, along with what makes each stand out and who they’re best suited for:

• Binance: One of the largest and most liquid exchanges worldwide, Binance offers an enormous selection of cryptocurrencies, advanced trading tools, and low fees. Best for active traders who want access to a wide variety of coins.
• Gate.io: A popular platform with deep altcoin listings and competitive trading costs. Best for investors interested in exploring lesser-known tokens beyond the big names.
• PrimeXBT: A derivatives-focused exchange known for margin trading and a straightforward interface. Ideal for experienced traders looking to leverage positions on crypto and other assets.
• Zengo Wallet: A secure, non-custodial wallet with built-in exchange features. Great for beginners who want an easy way to store and swap crypto safely.
• Coinbase Exchange: One of the most beginner-friendly exchanges, with a simple interface, regulated operations, and strong educational resources. Perfect for newcomers who want a safe, familiar on-ramp to crypto.
• OKX: A global exchange offering spot and futures trading, staking, and DeFi services. Best for traders who want a full-featured platform with lots of ways to grow their holdings.
• ACE – Adenasoft Crypto Exchange Solution: A customizable exchange platform used by smaller trading services. Best suited to businesses and entrepreneurs building their own branded exchanges.
• Kraken: A long-established exchange known for strong security practices and fiat currency support. Ideal for U.S. and European users who value compliance and transparency.
• eToro: A multi-asset platform that blends crypto trading with stocks, ETFs, and social investing features. Best for users who want to trade multiple asset types in one place.
• PayBitoPro: A professional-grade exchange supporting a variety of cryptocurrencies and integrated wallet services. Good for traders who need robust tools and secure storage.

Frequently asked questions (FAQ) about cryptocurrencies

What are the four types of cryptocurrency?

The most common categories are coins (cryptocurrencies with their own blockchain, like Bitcoin), tokens (built on other blockchains), stablecoins (designed to maintain a steady value, such as USDT and USDC), and altcoins (all cryptocurrencies that aren’t Bitcoin, including Ethereum, Cardano, and Solana). Some people also consider memecoins and NFTs as separate categories.

Which crypto is best to invest in?

There’s no one-size-fits-all answer. Popular options like Bitcoin and Ethereum have established track records, while newer altcoins and tokens can carry higher risk and potential reward. The best approach is to research each project carefully, understand the use case, and consider your risk tolerance before investing.

How can I learn crypto trading?

Start by reading guides on how exchanges work, different order types, and risk management strategies. Many platforms offer demo accounts to practice trading without real money. You can also explore educational resources, online courses, and community forums to build your knowledge over time.

Is crypto real money?

Cryptocurrencies can be used to buy goods and services, transfer value, and store wealth. So in that sense, they function like money. However, they are not legal tender in most countries, and their acceptance varies by region and business.

Is stablecoin a good investment?

Stablecoins are designed to maintain a consistent value, so they typically don’t appreciate over time like Bitcoin or Ethereum. Many people use them as a way to hold funds, reduce volatility, or earn interest through lending platforms. They can be a useful tool but aren’t usually considered growth investments.

Is Bitcoin a stablecoin?

No. Bitcoin is not a stablecoin. It is a decentralized cryptocurrency with a price that fluctuates based on market demand. Stablecoins, on the other hand, aim to maintain a fixed value relative to fiat currencies.

Where can I buy stablecoins?

You can purchase stablecoins like USDT, USDC, and DAI on most major cryptocurrency exchanges, including Binance, Coinbase, Kraken, and others. Be sure to verify that your chosen platform is reputable and complies with regulations in your region.

Is a memecoin a good investment?

Memecoins like Dogecoin and Shiba Inu can be fun and have strong communities, but they are typically more volatile and speculative than other cryptocurrencies. If you choose to invest, be aware of the risks and never put in more than you can afford to lose.

HODL up: One last thing

Cryptocurrencies are more than just a new form of money. They’re a groundbreaking technology that’s transforming how we think about value, ownership, and the flow of information. From Bitcoin acting as digital gold to stablecoins making everyday payments more accessible, each type of cryptocurrency brings something different to the table.

But remember, investing in crypto isn’t just about chasing quick profits. It’s about understanding what you’re investing in, evaluating projects carefully, and choosing platforms that align with your goals and risk tolerance.

No matter where you are in your journey, curious beginner, active trader, or long-term believer, the most important step is to keep learning. The more you explore, the more equipped you’ll be to navigate this exciting frontier with clarity and purpose.

Ready to take the next step? Learn how to set up a crypto wallet so you can start trading safely and confidently.

This article was published in 2024 and has been updated with new information.