What are The Top 5 Cryptocurrencies in the World Today? And Why?

Due to the omnipresent digitalization of the world, we are witness to the growing popularity of digital currencies. When BTC (Bitcoin) was first launched, in 2009, it was the only crypto (cryptocurrency) in the world.

Nowadays, there are more than 5000 different cryptocurrencies, according to Bitcoin.com. However, only a handful of them have managed to gain the status of popular cryptocurrencies.

In this article, we will examine the Top 5 Cryptocurrencies in the world, as well as their specific qualities, more closely.

But, before we get to that, we’ll just do a quick recap on the following topics:

• What are cryptos and
  their properties
• How they are produced
• Why they have value, and
• Why their values differ

What is a cryptocurrency?

Invesopedia.com, an online resource for educational financial concepts, defines a crypto as a digital or virtual currency, secured by cryptography.

Cryptography represents the techniques used for secure communication in the presence of third parties. Moreover, it is about constructing and analyzing protocols that prevent the public from reading confidential data. The word (cryptocurrency) itself, is derived from the name of these encryption techniques.

This digital asset is based on a network that is distributed across a large number of computers. Many cryptocurrencies are decentralized networks based on blockchain technology.

B140970324 / CC BY-SA

Blockchains, which are organizational methods for ensuring the integrity of data, are an essential component of many cryptos. This specific property makes it nearly impossible for cryptocurrency to be counterfeited, or double-spent.

It is this decentralized structure that allows crypto to exist outside the control of governments and any central authorities.

Properties of cryptocurrencies

In an article published in the Journal of Systems Integration, Jan Lansky introduced the following definition of cryptocurrency:

• It does not require a central authority; its state is maintained through distributed consensus.
• The system keeps an overview of cryptocurrency units and their ownership.
• The system defines whether new cryptocurrency units can be created. If they can, the system defines the circumstances of their origin and how to determine their ownership.
• Ownership of cryptocurrency units can be proven exclusively cryptographically.
• The system allows transactions to be performed in which ownership of the units is changed. A transaction statement can only be issued by an entity proving their current ownership.
• If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs only one of them.

How are cryptos created?

As stated on Cryptocurrencyfacts.com, a cryptos-related informational website, Cryptocurrency is created by code. New virtual coins are created usually by a process known as mining.

They are created by algorithms that rely on cryptography. Every transaction relates to unique cryptographic codes. The algorithms are written to award coins to computers who add transactions to the blockchain. This process, of adding transactions to the blockchain, is known as mining.

Marco Krohn / CC BY-SA

For most cryptos, new coins are created by people all over the world running hardware that adds these transactions. Otherwise, cryptocurrency tokens are created by other mechanisms contained in a cryptocurrency’s software.

How exactly coins are created depends on what is defined by a given cryptocurrency’s code. For example, some may generate tokens upon launch, as developer rewards or others may payout tokens as dividends, monthly.

Why do cryptos have value?

By looking at the qualities of digital coins along with the specifics of how they stored and produced, we can deduce what gives value:

• They possess a large degree of divisibility – which allows users with tiny fractions to take part in transactions.
• They use blockchain technology – which doesn’t require trust between parties participating in the market.
• Cryptos are transferable between parties within minutes, regardless of the size of the transaction;
• They are incredibly difficult to counterfeit – since that would require a huge amount of resources.

Why do their values differ?

The supply of coins plays an important role in setting market prices. All other things being equal, the scarcer the coin, the more valuable it should be.

BTC (Bitcoin) is currently mined at a known rate of new coins for every verified block. Ripple coins (XRP), on the other hand, were pre-mined by its founders. It is believed they are currently being released at a rate of one billion per month.

While some coins are standalone cryptocurrencies, there are the ones that exist as part of wider networks with expanded applications. If the popularity of these networks increases, demand for their underlying cryptocurrencies changes.

Aside from all this, the reputation of a crypto always plays a role in determining its value as well.

All this being said, let’s examine the top 5 cryptos in the world today.

The Top 5 Cryptocurrencies today

Since BTC was first launched in 2009, the financial market has been introduced to new, different digital currencies. BTC remains number one, considering value, popularity, and number of coins in existence. But there are some other cryptos that continually stand out from the pack.

As time goes by, the list of cryptos that makeup The Top 5 is susceptible to change. This happens mainly due to the volatile nature of their prices, along with overall availability and popularity.

Usually, the Top 5 are determined based on their Market Capitalisation. Market Cap (Market Capitalisation) simply refers to the total dollar market value of the observed asset.

For this article, we used the information from Investing.com, an online financial institution. Below is a table showing the top 5 cryptos as of 5/09/20.

Name	Symbol	Price (USD)	Market Cap	Vol (24h)	Total Vol
Bitcoin	BTC	10,311	$191.2B	$31.49B	22.41%
Ethereum	ETH	368.66	$41.60B	$17.99B	12.81%
Tether	USDT	1.0027	$14.12B	$56.61B	40.29%
XRP	XRP	0.24821	$11.19B	$1.78B	1.27%
Chainlink	Link	12	$4.26B	$1.38B	0.98%

Until recently, BCH (Bitcoin Cash) was the 5^th on the list, but has now been replaced by Chainlink

Now, let’s take a closer look at The Top 5.

BTC (Bitcoin)

As mentioned before, BTC is the first-ever known cryptocurrency to exist, launched in 2009. It was created by a person, or group of people, under the name Satoshi Nakamoto.

It is the first decentralized peer-to-peer payment network powered by its users with no central authority or middlemen.

As time goes by, even though BTC’s value is volatile, it doesn’t seem to affect its popularity. On the contrary, some would argue that it is yet to rise.

This is because BTC is becoming more accessible, not just to investors, but to ordinary users around the world as well. As well as the fact that it is believed that there will ever only be a maximum supply of 21,000,000 BTC.

So, it remains to be the Number 1 on our list, with the largest market share in the world today.

ETH (Ethereum)

Ethereum is backed by a blockchain, much like BTC. But the technology is slightly different and aimed at a specific use case: smart contracts.

It was initially launched in July 2015, and Ether is a fundamental token for the operation of Ethereum. Several aspects differentiate ETH from BTC, but we will mention only a few of them here:

• The block time is longer by 3 seconds.
• Mining of Ether generates new coins at a usually consistent rate, occasionally changing. For BTC the rate halves every 4 years.
• Transaction fees differ by a couple of factors.
• Ethereum uses a system where values are debited from accounts and credited to another. This is as opposed to Bitcoin's system, which is more analogous to spending cash and receiving change in return.

A consortium called the Enterprise Ethereum Alliance, which includes companies like Microsoft and JPMorgan, is developing uses for the Ethereum blockchain. The crypto itself is required by developers who want to build apps on the Ethereum blockchain. As well as by users who want access to interact with the smart contracts on the platform.

It is believed that, as of April 2020, there is a supply of more than 110,000,000 ETH circulating. It is worthwhile noting that it does not currently have an upper limit for maximum supply.

XPR (Ripple)

The Ripple network was created by Ripple Labs Inc., a US-based technology company. The XRP Ledger was created in 2012 with a finite supply of 100 billion units of XRP.

Ripple is built upon a distributed open-source internet protocol and supports tokens representing different units of value. It eases out the process of cross-border payments with its extremely low transaction fees and very fast transaction times.

The Ripple digital currency, XRP, can be used by enterprises to get instant liquidity needed in high-value transactions. Transactions in XRP can be settled faster than any major cryptocurrency at this time.

Also, it is flexible in terms of currency. You can purchase XRP with a variety of fiat currencies as well as other cryptocurrencies including ETH and BTC.

There will only ever be a maximum circulating supply of approximately 99,993,093,880 XRP. This leaves Ripple at Number 3 of our list.

USDT (Tether)

Tether belongs to a new breed of cryptocurrencies called stablecoin that aim to keep crypto’s valuations stable. It was originally designed to always be worth $1.00, maintaining $1.00 in reserves for each tether issued. But on 30 April 2019, Tether Limited's lawyer claimed that each tether was backed by only $0.74 in cash and cash equivalents.

Tether was created to bridge the divide between traditional fiat currencies and cryptocurrencies. It would thus offer stability, transparency, and minimal transaction charges to users. Being less volatile, it would also be used as a medium of exchange and a store of value.

It is believed that there is a maximum supply of approximately 6,350,000 USDT, and currently scores Number 4 on our list.

LINK (Chainlink)

ChainLink is another decentralized oracle network that provides real-world data to smart contracts on the blockchain.

Chainlink revolves around its LINK network. It is powered by its cryptocurrency LINK, which is used to reward contributors who participate in its ecosystem.

LINK is built on Ethereum. It therefore has a way of efficiently providing data to smart contracts on smart contract enabled blockchains. Aside from that, it can be bought and sold for fiat currency or other digital currencies.

Holding the 5^th place, it brings us to the conclusion of our list of The Top 5 Cryptocurrencies.

Conclusion

Even though the financial market is being flooded with more and more new cryptos every day BTC remains Number 1. It is followed by ETH, after which there is vast space in terms of the price range.

Due to its specific qualities, Ethereum falls under cryptos that rarely leaves the Top 5. It is followed by both XPR and USDT, which are close to a tie. And finally LINK and BCH, currently occupying 5^th and 6^th place on the list.

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