You’ve heard about Bitcoin, Ethereum, and probably Litecoin and Ripple. But have you heard of Pandacoin or DopeCoin? What about CryCash, Dogecoin, TeslaCoin, Philosopher Stones or WolfCoin? How many cryptocurrencies are there? And did you notice one of those isn’t a real cryptocurrency? (Spoiler: it’s WolfCoin—at least it wasn’t real at the time of writing!)
Next week, there could be fewer or still more. New coins rise and fall, are created and destroyed, all the time. Some vanish because they never caught on; others because they weren’t legitimate in the first place. Others have created great wealth, in the form of lambos or turned out to be scams. Given the increasing accessibility of the technology required to create a cryptocurrency, it’s easier than ever to make your own coin. So how many cryptocurrencies are there, really? And why are there so many?
How Many Cryptocurrencies Are There?
There are currently more than 1,900 different cryptocurrencies. Today, there are 1,910, to be precise. At least as of today!
But cryptocurrency comes in two flavors: coins and tokens. Both contribute to the total count, but their differences are key. A coin operates on its own blockchain. Bitcoin and Ether are examples of coins. By comparison, tokens reside on preexisting blockchain infrastructure, like the Ethereum network.
Creating a coin, also known as an altcoin or alternative coin, takes a lot of work and resources, though not enough to dissuade developers. Building your own blockchain or forking an existing one with a few tweaks requires some specialized knowledge that you either need to have or pay for.
Creating a token is a comparatively cheaper and easier process. Instead of building and maintaining a forked blockchain, you can rely on Bitcoin or Ethereum blockchain technology.
Altcoins take the core blockchain protocol of an already existing coin and make a new one. Tokens just ride on top of the infrastructure that’s already there. Since creating a token has a lower barrier to entry, there are more of them, swelling the bottom ranks of the cryptocurrency roster.
Why Are There So Many Cryptocurrencies?
How many cryptocurrencies are there? As many as people are willing to create. But what’s motivating them? Why are there still so many different cryptocurrencies? Are people just making them because they can?
Sometimes, yes! Part of what’s so attractive about blockchain and crypto is its unprecedented accessibility. The code for the technology is open-source, widely shared and distributed. Decentralization means there’s no governing, central authority making all the decisions. And when have people ever been able to create their own currency?
For the most part, people create new coins and tokens to modify, specialize or improve upon the core technology. Take the cryptocurrency Ripple, for example. Developers created Ripple because they weren’t happy with how long it took to verify transactions on the bitcoin blockchain. With some modifications of the code, they were able to create a blockchain that processes cryptocurrency transactions within seconds and costs pennies.
Furthermore, currencies have different circulation caps, and some of them aren’t capped at all. For instance, there will only ever be 21 million bitcoin. Cryptocurrencies can also have widely different applications. Some tokens are used as commodities, smart contracts or other digital assets, for instance.
Suffice to say, whether it’s just for kicks, like Garlicoin, or to drive real innovation, like Ripple, there are all kinds of reasons to create a new cryptocurrency. People are still experimenting with the technology and testing its limits. Others are taking advantage of blind enthusiasm to run scams. Still more are looking for new ways to trade goods and do business. This means that the answer to how many cryptocurrencies there are will be different today from next month, or even next week.
All Cryptocurrencies Were Not Created Equal
How many cryptocurrencies are there? Probably too many or, depending on your view, still not enough. 2017 brought an explosion of new coins with the rise of initial coin offerings, also known as ICOs. Over the year, there was $5 billion in ICO investment, leading to the introduction of 700 new coins. This was enough to draw the attention of SEC regulators. If new regulatory oversight deters scam ICOs and shitcoins, there could be far fewer new coins in 2018.
Either way, most of the coins out there are for niche trading or exist as a developer’s passion project. Perhaps one day, one of the hundreds of altcoins will surge through the ranks into the top 100. But for now, cryptocurrencies with the largest market caps, like Bitcoin and Ethereum, are the only relevant ones for the majority of traders.