What are Penny Cryptocurrencies?
Penny cryptocurrencies are those cryptocurrencies that trade for less than $1.
At the time of writing this article, the top 5 penny cryptocurrency list sorted by market capitalization in descending order is XRP, TRX, XLM, ADA, and MIOTA.
So what do these top penny cryptocurrencies do exactly? We have provided a quick summary of each one below:
#1 – XRP
Jed McCaleb and Ryan Fugger initially started Ripple in 2004 as Opencoin.
The goal was to construct another type of monetary system, which would provide numerous improvements upon the existing one.
XRP (The token of the Ripple network) works on the network and has the objective of conducting efficient transactions throughout the world.
The main benefits that XRP provides are high security, fast and cheap transactions.
XRP also has one of the quickest blockchains, with transaction speeds fluctuating between two and four seconds.
Furthermore, a transaction costs on average less than $0.01. XRP is also deflationary currency.
Ripple has three product offerings: xCurrent (enjoys the most real-world use, used for liquid pairs), xRapid (used for illiquid pairs), and xVia (interface helpful to xRapid and xCurrent).
The xRapid product is powered by XRP, whereas Ripple’s other products are not dependent on its use.
Ripple is used by various well-known companies throughout the world, including but not limited to Western Union, Bank of England, American Express, BBVA and more.
To conclude, the main goal of Ripple is to help the banking sector by providing them with a more efficient payments system than the one they are using today, namely SWIFT.
At the time of writing, XRP had a total market cap of $12,783,809,442.
#2 – Tron (TRX)
TRX is the token for the Tron network, created by Justin Sun, who previously was Ripple’s representative in China and twice selected for Forbes Asia 30 under 30.
Its focus is on the expansion of the market for digital content.
Its decentralized platform and storage technology is designed to enable the creators of digital content to receive funds directly from their consumers.
This means that authors of digital media content that choose to use Tron will have total ownership of the data they have created, including how and who it is distributed to.
This will effectively cut out middlemen such as Google play store or Apple store and the fees they charge for using them.
TRX is earned by creating content rather than being mined.
Furthermore, TRX has acquired BitTorrent in order to solidify its model for content distribution.
Tron is a long-term project with six development phases, starting with Exodus in 2017 and ending with Eternity in 2023.
At the time of writing, Tron has a market cap of $1,966,549,855.
#3 – Stellar Lumens (XLM)
Stellar is a network which allows users to transfer money throughout the world in an instant with insignificant costs.
Its main goal is to provide financial access in parts of the world that do not enjoy elementary financial institutions and their uses.
It was first created in 2014, by Jed McCaleb (co-founder of Ripple) and Joyce Kim.
The network has its own token (XLM), and its primary function is to offer conversion amongst other currencies.
Similarly to XRP, the transactions costs are extremely low (0.0001 XLM) and extremely fast (average less than 6 seconds).
However, the total supply increases each year by 1%, making XLM an inflationary currency.
Stellar enjoys a number of partnerships, including Blook Solutions (Philippines), ICICI Bank (India) and Cellulant (Africa).
While it has a number of similarities with Ripple, more specifically benefits (fast and cheap transactions, and high security) the main difference comes from the fact that Stellar is a non-profit organization which is decentralized.
Furthermore, it does not aim to assist the banking sector, rather focusing on individuals who do not enjoy access to basic financial institutions.
At the time of writing, Stellar had a market cap of $1,855,143,524.
#4 – Cardano (ADA)
Similarly to Ethereum, Cardano is a platform for smart contracts with proven security.
Both cryptocurrencies share several roots, starting with the founders of Cardano; Jeremy Wood and Charles Hoskinson who were influential in the beginnings of Ethereum in 2013.
Cardano uses Haskell, which is a programming language that has a large grade of fault tolerance.
Cardano has two layers in its development, which separate the values on the ledger account and the reasons why they are transferred from one account to the other.
This allows the smart contract to become more flexible and allows the businesses to customize the privacy and design of each contract.
The ensuing equation decides the transaction fees for Cardano:
Fee = a + b * size.
a = constant that currently equals 0.155381 ADA
b = a constant that currently equals 0.000043946 ADA/byte
size = the total size of the transaction expressed in bytes.
At the time of writing, ADA has a market cap of $1,072,093,329.
#5 – IOTA (MIOTA)
David Sonstebo developed IOTA, and it was released in 2015, having a fixed supply of coins.
The purpose of it was to make transactions for IoT (Internet of Things) more efficient.
Besides making a faster and more secure transaction system, the IOTA team wants to facilitate data movement from any one machine to another, providing a better connection between devices.
Another interesting thing about IOTA (Internet Of Things Application) is that instead of working with blockchain system, it uses a novel structure named “Tangle,” which is an interlinked system of several chains.
The system is what allows transactions in IOTA to be completely free.
However, IOTA has the disadvantage of not being able to support smart contracts, since they require too much computational power.
At the time of writing, the market cap for IOTA is $766,251,555.