In recent years, the total number of cryptocurrency holders worldwide has reportedly exceeded 500 million.

As the number of cryptocurrency users around the world has grown, so too has the number of cryptocurrencies coming to the market.

Since the Bitcoin white paper was published in 2009, thousands of blockchain-based cryptocurrency projects have emerged.

Many of these digital assets offer unique functionalities that expand on the original cryptocurrency’s primary utility as a “peer-to-peer electronic cash system.”

Whether you’re an experienced crypto veteran or completely new to the market, there’s a range of ways to use your cryptocurrencies beyond simply buying and holding them.

Imagine you are the commander of an army comprising several platoons of soldiers, each located at a different drop off point. You plan to attack a single fortified area at a specific time. To do this, you must coordinate with each of your platoons to ensure they all know the correct time, location and plan of action.

But this poses a number of problems. What if one or multiple platoons decide to retreat at the last minute? What if they attack too early? What if they arrive at the wrong location? What if there are traitors in a platoon that attempt to sabotage the plan?

For the attack to work, it’s vital everyone reaches a unanimous agreement— also known as reaching consensus— on what the plan is. This example is based on the Byzantine Generals’ Problem; a concept published in a 1982 paper that illustrates the problems of building a robust communication system where its assumed participants in that system may act dishonestly.

Bitcoin is a revolutionary form of digital currency first proposed in 2008 by a person or group of people known as Satoshi Nakamoto.

Unlike traditional currencies, Bitcoin is a digital asset and does not depend on central banks or governments.

Instead, it operates as a completely decentralized system and stores activity on a digital database called the bitcoin ledger. This decentralization means that no single company or government can make decisions about how the currency works or how people can use it.

In fact, the protocol’s users collectively help in running it, guided by strict computer-coded rules. These rules set the amount of bitcoin in circulation and how users trade and create new bitcoin.

Bitcoin (BTC), the cryptocurrency asset, was originally created to act as a digital medium of exchange. You can buy or sell bitcoin on most, if not all, crypto exchanges or on dedicated Bitcoin exchanges. The process of generating new Bitcoin is called Bitcoin mining. It involves using powerful crypto mining computers to process the complex mathematical equations needed to maintain the network.

Traditional methods of sending money overseas often involve opening a bank account, paying comparatively high fees and waiting up to five business days for payments to process.

Cryptocurrency can offer a much faster, more cost-effective solution than these traditional methods.

Crypto holders can transfer value over the internet to anyone else in the world quickly, using virtually any cryptocurrency available on the market today.

Certain cryptocurrencies are more efficient than others, with popular options such as Litecoin (LTC) and XRP (XRP) oftentimes costing fractions of a cent to send any amount to another person in seconds.

Sending crypto across international borders can be especially useful when transacting with unbanked people in developing countries.

Today, crypto is helping people all around the world avoid the high costs and inefficiencies that are often associated with global remittance services.

As a globally recognized form of value, crypto can serve as a viable medium of exchange for people looking to transfer value in a more efficient way.

You can check our article What makes crypto borderless? to learn more about how cryptocurrencies allow people to send value around the world quickly, reliably and cost-effectively.

Cryptocurrencies come in many forms.

Besides the renowned cryptocurrencies that many people know, like Bitcoin (BTC) and Ethereum (ETH), there are countless other projects that serve various purposes.

If you’re new to crypto you might be wondering, how do people make sense of all these different coins and tokens?

While there are no official rules or standards when it comes to crypto classification, some frameworks can be more helpful than others.

Crypto traders can use these different systems to decide what assets to purchase and how to best diversify their portfolios.

The categories below are adapted from Messari’s classification system, a leading crypto data and information aggregator.