Technical analysis of cryptocurrencies: what is it and how is it done?

Cryptocurrencies haven’t just changed the financial landscape; they’ve completely revolutionized it. But if you still think that there’s only Bitcoin, it’s time to find out what’s behind this plethora of digital assets. In addition to popular currencies, there are dozens of other currencies with unique features and purposes. In this guide, we’ll explain what types of cryptocurrencies there are, how they differ, and how to choose the right one for you.

Main Types of Cryptocurrencies: From Classic to Memecoins

Apart from being the first cryptocurrency, Bitcoin is also a kind of “digital gold” and remains an important part of the financial ecosystem. Created in 2009 by Satoshi Nakamoto, Bitcoin is intended as a decentralized alternative to traditional currencies, without any middlemen or government control.

Then there’s Litecoin, often referred to as Bitcoin’s “lighter brother.” Created in 2011 by Charlie Lee, it has a number of distinguishing features, including faster transactions and lower transfer fees. These cryptocurrencies are called classic because they are designed to facilitate financial transactions and innovation.

Why use classic cryptocurrencies?

1. Payments: They allow you to quickly and easily transfer money around the world.
2. Store of value: Since the supply of Bitcoins is limited, they can serve as a store of value.
3. Long-term investments: Classic cryptocurrencies have long proven themselves as reliable assets for long-term storage.

In this context, the types of cryptocurrencies are primarily classified according to their purpose: classic cryptocurrencies were developed to become financial instruments, but other types have their characteristics and applications.

Memcoins: what they are and why they are trending

Memcoins are a type of cryptocurrency that started as a joke project and suddenly became popular thanks to internet memes and an active community. Dogecoin and Shiba Inu are two of the most notable examples of cryptocurrencies that have evolved from funny memes to serious assets:

1. Dogecoin was created in 2013 as a parody of Bitcoin and depicts a dog that is popular as an internet meme. Today, it enjoys enormous social support and is expected to exceed $10 billion in market capitalization by 2023.
2. The Shiba Inu has become known for its cult status and sudden price increases, often as a result of social media attention or celebrity tweets.

Memcoins: What are they? —In short, they are cultural phenomena that are not driven by algorithms, but by internet communities and trends.

Importance:

1. Community: The success of memecoins often depends on the solidarity among their users.
2. Innovation: Although many memecoins are temporary phenomena, they raise questions about the role of the community in determining the value of cryptocurrencies.
3. Risk and return: Investing in memecoins always involves a high level of risk, but also the possibility of sudden price increases.

The main differences between classic cryptocurrencies and memecoins:

1. Purpose: Classic coins were created to improve transactions and financial systems, while memecoins are often created for entertainment purposes.
2. Liquidity: Traditional platforms often have greater liquidity due to their financial value and large number of users.
3. Popularity: Memecoins can quickly become popular due to viral content, but this is usually temporary.

What is the difference between the different types of cryptocurrencies?

Stablecoins are cryptocurrencies that are pegged to fiat currencies or other assets to ensure the stability of their value. For example, USDT (Tether) is one of the most popular stablecoins. It is pegged to the US dollar and is always worth around $1. This makes it an ideal instrument for transactions where stability is important.

Unlike other types of cryptocurrencies, whose prices can fluctuate widely, stablecoins are more predictable. This makes them suitable as a means of storing and exchanging value in times of economic uncertainty.

How stablecoins work:

1. Backing: Many stablecoins are backed by reserves of fiat currency or other cryptocurrencies, making them relatively stable.
2. Use cases: They are often used for payments in cryptocurrency ecosystems and in decentralized finance (DeFi) applications.
3. Transactions: Due to their stability, they are widely used for trading and as a medium of exchange on crypto exchanges.

Advantages:

1. Stability: Unlike other cryptocurrencies that are subject to large fluctuations, stablecoins offer predictability and stability.
2. Minimal fees: Transactions with stablecoins can be cheaper than traditional bank transfers.

Tokens and their role in the digital economy

Tokens are another important type of cryptocurrency. They differ from traditional currencies in that they are not independent currencies, but are part of a project’s ecosystem. For example, Ethereum uses tokens on its platform for a variety of purposes, from developing smart contracts to project management.

The difference between tokens and classic types of cryptocurrencies:

1. Tokens typically exist within a project or ecosystem and can be used for various functions, such as voting, making payments, or representing assets.
2. Blockchain: Many tokens are based on major blockchains such as Ethereum or Binance Smart Chain and can be used within smart contracts.

Examples:

1. ERC-20 is a token standard on the Ethereum blockchain that is used to issue tokens for various projects.
2. NFTs (non-fungible tokens) are another type of token that represent unique digital assets, such as art or collectibles.

How to choose a cryptocurrency to invest in: tips and recommendations

It is important to realize that each currency has its own role. Categorizing cryptocurrencies can help you better assess the risks and opportunities.

How to classify cryptocurrencies for investment purposes?

1. Stablecoins: stable, suitable for storing and exchanging money.
2. Altcoins: riskier, but also potentially profitable. These are cryptocurrencies such as Ethereum or Litecoin, which are in full development.
3. Memcoins: inherently risky, but can suddenly increase in value in response to trends.

How to choose the right assets?

If the goal is a long-term investment, Bitcoin and Ethereum are a reliable option. However, if you are looking for more dynamic and risky assets, such as memecoins or altcoins, then you should approach them with caution. However, do not rule out the possibility of high returns.

Conclusion

Each type of cryptocurrency comes with its own unique risks and opportunities, which directly depend on your goals. If you are looking for stability, stablecoins are the perfect option. If you are looking for exposure and quick money, memecoins can be an interesting and risky investment.

The question of “what is Web3” has been the subject of discussions for several years, but a clear explanation is still lacking. Some consider it a trendy term without substance, while others see it as the next step in the evolution of the internet. In reality, Web3 is the concept of the next generation network where users control their data instead of renting it out to corporations. It’s a fresh approach to decentralization, freedom, and a new type of digital relationships. Let’s delve into what lies behind this and why you should stay informed.

What is Web3: Transition from platforms to users

To truly understand what Web3 is, it’s worth looking back at how the digital space has evolved.

Web 1.0 was a showcase: in the 90s and early 2000s, websites were static pages where users could only read. Content creation was the prerogative of developers, and feedback was almost non-existent. Interaction with the network was limited to viewing information.

Then came the era of Web 2.0 – a revolution that turned users into active participants. With the emergence of social networks, video hosting platforms, and blogging platforms, the IT environment became a space for communication, creativity, and self-organization. However, along with them came a new type of centralization: all your actions, posts, likes, comments, and even preferences now belong to large technological giants. Corporations not only own platforms but also control data, accumulate profiles, shape algorithms, and set the agenda. Users get a minimum – the ability to “be” and “post,” but not to control their online footprint.

The third generation internet, also known as the internet 3.0, offers a fundamentally different philosophy. The architecture is based on blockchain – a distributed system where there is no single center of control. Each network participant becomes the owner of their assets, and all operations are transparent and recorded in immutable registries. Only the community can change the data through consensus. It is impossible to delete information or “rewrite history,” as can be done in centralized services.

Web3 is a global network where users control their actions, assets, and personal information, instead of handing them over to corporations. And this is its main value.

Where Web3 is already in action: examples of real implementations

While some perceive the internet 3.0 as a theory and a trendy term, others are actively using its capabilities in practice. To understand what Web3 is, it is important to see where IT technology has already proven its effectiveness. Below are areas where Web3 has moved beyond being a concept and has become a working tool:

• conduct transactions through DeFi – decentralized platforms like Uniswap and Aave allow you to take out loans, exchange tokens, and earn through staking without banks and intermediaries;
• sell digital art as NFTs – your illustrations, music, or 3D objects can become unique tokens secured by blockchain;
• manage projects through DAOs – decentralized autonomous organizations operate on the principle of transparent voting, where each token represents a voting right;
• own assets in blockchain games – characters, equipment, and even land in metaverses can be your personal assets, not just part of a rented game;
• use decentralized social networks – Web3 offers platforms without censorship and data collection, where the content belongs to you, not the corporation.

Web3 has moved beyond white papers and presentations. It is in action – in finance, culture, games, and even governance. It is not just a hypothesis about the future but a working technology that is changing the way we interact with the World Wide Web and the digital environment every day.

How to start exploring Web3?

Understanding what Web3 is means not just reading a couple of articles but personally trying the technologies underlying it. Immersing yourself in the third-generation internet does not require a programmer’s diploma or thousands of dollars to start. It is important to start with the basics to understand the logic, feel the mechanics, and gradually integrate into the ecosystem:

• get a crypto wallet – start with MetaMask or Trust Wallet: it will be your passport for Web3 applications and transactions;
• learn the basic technologies – understand how tokens work, what smart contracts are, and what makes each NFT unique;
• use DeFi services – exchange a few coins, try staking, or provide liquidity to understand the Web3 economy from the inside;
• join a DAO or decentralized community – Telegram, Discord, and forums can help you find people who are already knowledgeable;
• subscribe to specialized media – read blogs, watch educational videos, and stay updated: knowledge is your best investment.

Understanding what Web3 is can only be achieved through action. One crypto wallet, one transaction, one DAO – and you are no longer an observer but a full-fledged participant in a new reality. Starting is easy – the main thing is not to stop.

Conclusions

This is not just another technological trend but a new paradigm in the development of the internet. Unlike previous stages – Web1 (static content) and Web2 (interactivity and platforms), Web3 offers decentralization, transparency, and user control over their own data. Here, content belongs not to corporations but to the creators themselves, and access to financial instruments and services becomes more equal and open thanks to blockchain, NFTs, DAOs, and cryptocurrencies.

Web3 is already influencing many industries – from finance and education to game development and creative industries. It is changing the ways of ownership, participation, and interaction in the digital space. And while the ecosystem is still in an active stage of development, its rules, architecture, and culture are being shaped right now.

The future of the internet is being created right now. And there is a place for everyone in the process – from developers and designers to active users and new participants in the economy.