There are now more than 17,000 cryptocurrencies in existence, and in fact, the market is adding almost 1,000 new ones every month! Yet despite this massive growth, only a small number of them really matter – roughly 20 cryptocurrencies make up 90% of the total market.
Although most cryptos have little value and unclear potential, things can change quickly, which is why it pays for association professionals to understand the landscape.
Why Utility Matters
In general, cryptocurrencies can be grouped by their utility. That basically means, “What is it for?”
Because each cryptocurrency has its own technology and uses, the specific appeal to buyers stems from the future vision of how the space could develop. In business terms, we’d say that every cryptocurrency presents a different value proposition, which is an important distinction that many people do not understand.
A cryptocurrency’s total value in the market is called its “market capitalization.” Using that as our guide, let’s review them in their order of relevance.
10 Cryptocurrencies You Should Know
The two big names in cryptocurrency are Bitcoin and Ethereum.
Both have a growing track record of success, with steadily increasing valuation over time. In contrast, most of the lesser-known cryptos are considered more speculative and thus more volatile.
Related: Everything You Need To Know About Cryptocurrency
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The 10 cryptocurrencies everyone should know include:
- Bitcoin – The first cryptocurrency and the largest by market cap. It is viewed as a stable store of value due to its universal acceptance and is primarily used as an alternative method for storing wealth. It was designed with intentionally slow processing of transactions. This slow capacity means that it is not ideal for use in everyday buying and selling as a currency.
- Ethereum – The first programmable blockchain. This enables developers to build decentralized apps (dApps) that can transact in things OTHER than just currency. Ethereum has become the foundation of things like NFTs, event tickets and real estate transactions on the blockchain. While it has faster transaction times than Bitcoin, it is far from the fastest in processing speed. Ethereum’s strength is its use-cases beyond simple currency.
- Tether – A stablecoin whose price follows the U.S. dollar. This pegging feature removes the everyday volatility of most cryptocurrencies. This stability has resulted in it becoming the cryptocurrency with the most trading volume.
- Cardano – Cardano’s mining process is more efficient than any other crypto. Thus, it is more environmentally friendly. Due to its low energy usage, it’s considered a “sustainable" digital coin. Its blockchain also enables decentralized apps, similar to Ethereum, so it too can handle things other than currency.
- Binance Coin – Built by the popular Binance exchange, this coin has utility in the real world. Binance is a centralized company, so it's coin can be used for mainstream activities inside traditional Finance, such as credit card payments, trading and lending.
- XRP – This cryptocurrency is known for its incredibly fast transaction speed. As a result, major banks and financial centers use the XRP network for digital payments. This XRP network is owned and operated by a private company called Ripple, which was the subject of an SEC lawsuit, accusing XRP of being an unregistered security.
- Polkadot - A cryptocurrency designed to allow different blockchains to communicate and work with each other as “parachains.” Connecting across blockchains allows entirely new functionality, which puts it in competition with the smart-contracts of Cardano and Ethereum.
- Solana – Another smart-contract crypto – but faster. Solana can process transactions quicker and cheaper than rivals like Ethereum. Theoretically, Solana is capable of 65,000 transactions every second versus Ethereum’s 15 transactions-per-second. Both of these dwarf Bitcoin’s 7 transactions-per-second.
- Dogecoin – The first meme-coin to gain widespread popularity. It shares many of the same technical characteristics as Bitcoin, since much of its coding was directly copied from the first cryptocurrency. However, Dogecoin’s notoriety has increased its network and thus its acceptance among an increasing number of vendors.
- Monero – A cryptocurrency that provides greater privacy by making transactions untraceable. Cryptos like Bitcoin have a public wallet address, giving visibility into how much crypto is held in that wallet. Monero prevents this with privacy features applied to every transaction. This effectively masks transactions and visibility into wallets. There is debate as to whether this promotes illicit activity or protects the privacy of citizens. But both are true.
Cryptocurrency and the Association Professional
Cryptocurrencies and professional associations are both growing in prominence across the business landscape. Crypto is now becoming a central feature of several emerging business models. It is also directly influencing the world of nonprofits in its enabling of charitable giving.
Thus, the two main areas Association professionals should be closely watching are crypto philanthropy and creator coins.
Crypto Philanthropy
Crypto philanthropy is charitable giving that supports causes with cryptocurrency instead of cash or other assets. Just as investing in cryptocurrencies has gained popularity, so has the practice of donating to charities with crypto.
In the U.S., citizens don’t pay capital gains taxes on property assets (e.g., crypto, stocks) donated to a registered 501(c)3 nonprofit. Organizations and individuals leverage this to avoid the taxing of their most appreciated assets, and for many, this is their crypto. In recent years, annual crypto donation volume has risen sharply, impacting a broad number of industries.
Creator Coins
Creator coins are a crypto-based social currency, which essentially allows fans to invest in creators' success. Creators can launch their personal tokens representing a piece of their digital brand. These coins are issued by an individual or a business and share the same characteristics as money, in that they serve as a medium of exchange.
Because associations and membership have such a deep-rooted connection, considering creator coins as an exchange means for educational content and other membership benefits can be a powerful use case for crypto. As such, a growing number of associations and professionals are engaging with this new dynamic of value transfer.
The Bottom Line
There are many cryptocurrencies with many different uses.
In time, a dominant few will eventually emerge to become the established marketplace. These prevailing cryptocurrencies will ultimately be determined by their utility.
As this unfolds, their usage in emerging business models and charity will continue growing sharply. Obviously, the world of digital currency is still evolving. It appears that will remain the case for the foreseeable future.
Marc C. Angelos
Marc spent 27 years as a sales leader on Wall Street's algorithmic/A.I. trading desks in New York City. He is founder and CEO of a content strategy firm, Anvictus, which serves FinTech and Blockchain scale-ups. Marc has published several hundred articles and videos on sales strategy through content. His work has been featured in media such as Bloomberg, Traders Magazine, CNBC and various business podcasts.
March 24, 2022
3 min. to read
