Bitcoin: The Original Cryptocurrency

Bitcoin (BTC) was created in 2009 by the pseudonymous Satoshi Nakamoto as a peer-to-peer electronic cash system. It introduced blockchain technology to the world. Key characteristics:

  • Fixed supply: Only 21 million BTC will ever exist (approximately 19.7 million currently in circulation)
  • Proof of Work: Secured by computational mining
  • Decentralized: No company, government, or individual controls it
  • Store of value: Often described as "digital gold" for long-term wealth preservation

Ethereum: The Programmable Blockchain

Ethereum (ETH), launched in 2015 by Vitalik Buterin, extended blockchain beyond simple payments by adding smart contract capability. This made Ethereum the foundation for:

  • DeFi (decentralized finance) protocols
  • NFT marketplaces
  • DAOs (decentralized autonomous organizations)
  • Thousands of tokens built on top of the network

Ethereum transitioned from Proof of Work to Proof of Stake in September 2022 (the "Merge"), reducing energy consumption by ~99.95%.

Altcoins

"Altcoin" means any cryptocurrency other than Bitcoin. Notable categories:

  • Layer-1 smart contract platforms: Solana (SOL), Avalanche (AVAX), BNB Chain (BNB), Cardano (ADA)
  • Layer-2 scaling solutions: Polygon (MATIC), Arbitrum (ARB), Optimism (OP)
  • Privacy coins: Monero (XMR), Zcash (ZEC)
  • Meme coins: Dogecoin (DOGE), Shiba Inu (SHIB) — high risk, high volatility

Coins vs Tokens

An important distinction often confused by beginners:

  • Coins (or "native tokens") — The base currency of a blockchain. ETH on Ethereum, SOL on Solana, BTC on Bitcoin. Used to pay transaction fees.
  • Tokens — Built on top of an existing blockchain using smart contracts. USDC, DAI, LINK, UNI are all ERC-20 tokens running on Ethereum.

Stablecoins

Stablecoins are cryptocurrencies designed to maintain a stable value, usually pegged 1:1 to USD:

  • USDC (Circle) — Fully backed by USD and US Treasuries
  • USDT (Tether) — Largest by market cap, slightly controversial reserve backing
  • DAI (MakerDAO) — Algorithmic, collateral-backed, decentralized

Where Do Wallets Fit In?

Your crypto wallet is your interface to the blockchain. To interact with Bitcoin, you need a Bitcoin-compatible wallet. To hold Ethereum tokens, an Ethereum wallet. Many modern wallets (Trust Wallet, Exodus, MetaMask) support multiple blockchains, allowing you to manage diverse portfolios from a single interface.

Important: Make sure your wallet supports the specific blockchain and token you're receiving. Sending tokens to the wrong network address (e.g., sending Solana tokens to an Ethereum address) can result in permanent loss of funds.