There are over 1500 cryptocurrencies across the world at this point. While some might wonder, that is more than all the legal tenders combined, a few others question, “why are there so many cryptocurrencies across the world?” There was only Bitcoin nine years ago, but now new bitcoins are coming into the market each day.
So, why are there so many? What are the reasons? Well, one reason is to leverage blockchain technology. Not all cryptocurrencies have the same functionality. Hence, blockchain technology enables a multitude of opportunities for different cryptocurrencies with different functionalities. There are also other reasons why there are so many cryptocurrencies. To know more, keep reading:
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One possible reason for the birth of numerous other cryptocurrencies is the massive success of Bitcoin. Bitcoin was the first cryptocurrency, and there was a lot of talk surrounding it. Although initially, no one considered it or even bothered about it, its value shot up over the years.
Even Ethereum, another cryptocurrency, was worthless until 2017. But it is considered the second most successful cryptocurrency after bitcoin. And the journey of Ethereum from worthless to massive success took only 3 years. 2017 has been a boom year for those who invested in cryptocurrencies for various reasons. But the one thing that attracted the world is the handsome return of cryptocurrencies when people who invested in them turned millionaires overnight. Bitcoin shot up to $20,000 overnight, hitting an all-time high.
When this happened, everyone realized that something revolutionary in the field of financing and trading is happening. And these unexpected changes altered the mindset of people and prompted them to buy bitcoins in the expectation of reaping decent profits. The accelerated demand led to the creation of more and more bitcoins.
Forking can be considered another factor for the emergence of numerous new cryptocurrencies. Although it may not be the sole reason, it still is a factor. For instance, four new cryptocurrencies stemmed out of Bitcoin, including Litecoin, Bitcoin Gold, Bitcoin Cash, and Litecoin cash. Even these new currencies are susceptible to forking. Hence, the probability of cryptocurrency creation is almost infinite. Zcash is the best example of this category. While Zclassic resulted out of Zcash, Bitcoin Private is a twin fork stemmed out of both Bitcoin and Zclassic.
Innovation knows no bounds. As long as there is necessity and desire for improvement, innovation keeps on bringing something new. The same is the case for cryptocurrencies. Cryptocurrencies keep on increasing due to innovation, booming technology, and the desire for enhancement.
Bridging the gap between different currencies:
Right from the beginning, there have been attempts to bridge the gap between currencies, and various platforms out there are doing the same so that only a single address is present. This is one reason why new cryptocurrencies are being created each day.
No doubt the competition in crypto trading is raging, which can be seen evidently in recent times with the fall and rise of the prices and an increasing number of people participating in crypto trading. The competition and demand for cryptocurrencies are giving rise to new cryptocurrencies each day. More and more are bound to be created as the future looks bright for cryptocurrencies.
ODE is a new cryptocurrency that was released in the market to enhance the financial ecosystem, including banking and other financial systems. ODE is new crypto that made into the market in 2020, and there are only a 50million ODE coins currently in existence. ODE transactions incurred negligible to no transaction fees at all and were meant to be integrated into the financial ecosystems.
Nexus Mutual, created in 2020, is an alternative to insurance companies and utilizes Ethereum blockchain for its functionality. It can be used to cover insurance contract failures, and you can invest in NXM directly. NXM is a transparent platform as it is not run by a company; rather by its members themselves.
Datamine Network is another new open-source and decentralized cryptocurrency that hit the markets in 2020. DAM uses smart contracts for the purpose of adaptive money and generates dividends every 15 seconds. The current DAM tokens are limited to 16.8million and used to lock smart contracts.
Cardano is found by the co-founder of Ethereum, and its crypto coin is ADA. ADA is typically used for sending and receiving digital funds as Cardano claims that it is ethical, philosophical, and research-driven. Cardano also claims that it undergoes rigorous scrutiny of members, scientists, and experts to provide its users with high-quality performance.
The real issue is not having hundreds or even thousands of cryptocurrencies; rather, the role they are playing in the growth and advancement of society. While a few mine and invest in cryptocurrencies out of sheer interest, a few others do so with the whole and sole objective to use it as a speculative tool. However, if the latter is the case, not many will survive on this path and soon fade away. If that is the case, we may have none in the end or just a handful of cryptocurrencies. But that is not the case. There are still people interested in cryptocurrencies. Hence, the rise of new cryptocurrencies.