Cryptocurrencies were created as a new way to make payments, built atop an innovative ledger technology known as blockchain. After existing for a decade and a half, they have largely not achieved their goal of upending how money moves around the globe.
However, they have become a hot asset class for investors to stash money in and encompass a whole lot of territory beyond that well-known turf—and stir befuddlement for most everyone besides true believers in the digital assets. As they move closer to the mainstream, with major financial firms adopting them and a friendly administration taking control of the White House this month, outlining the differences among types of cryptocurrency can shed light on what makes them popular—and risky.
There's Bitcoin, the one that started it all amid the carnage of the Great Recession. Even though it was forged to circumvent the conventional financial system, the biggest firms on Wall Street, smelling riches and spotting interest among young people, have begun embracing it. There’s Ethereum, which, in simplest terms, offers a cryptocurrency built atop a blockchain that serves as the underpinnings for something akin to a global supercomputer (a place where developers can deploy software known as smart contracts). There also are myriad crypto projects like Solana that aim to provide the industrial-grade infrastructure needed to move the conventional financial system into the blockchain era.
And then there are memecoins, the most ragtag of the bunch given the complete lack of economic utility and the colorful and often bizarre imagery attached to them. Even as Bitcoin trades at unprecedented levels above $100,000, memecoins have stolen the spotlight after President Donald Trump and first lady Melania Trump launched their own just before Inauguration Day, immediately augmenting their family's wealth—at least on paper—by billions of dollars.
Please note that we at The Dispatch hold ourselves, our work, and our commenters to a higher standard than other places on the internet. We welcome comments that foster genuine debate or discussion—including comments critical of us or our work—but responses that include ad hominem attacks on fellow Dispatch members or are intended to stoke fear and anger may be moderated.
With your membership, you only have the ability to comment on The Morning Dispatch articles. Consider upgrading to join the conversation everywhere.