Mining-based altcoins are created through the process of mining. To utilise the blockchain network, majority of mining-based cryptocurrencies use Proof-of-Work (PoW), a process in which systems generate new currency by solving challenging problems. Litecoin, Zcash, and Monero are examples of mining-based altcoins recognized in the global community.

Within a network, utility tokens are utilised to deliver services. They could be used to buy services, pay network costs, or redeem prizes, for example. Utility tokens, unlike security tokens, do not pay dividends or require an ownership investment. A utility token is something like Filecoin, which is used to buy network storage space.

Since its inception, cryptocurrency trading and usage have been distinguished by volatility. By pegging their value to a basket of goods such as precious metals, fiat currencies, or other cryptocurrencies, stablecoins lessen the overall volatility of the total crypto market. They are arguably one of the best altcoins available.

Security tokens are similar to stock market securities, with the exception that they have a digital origin. Security tokens are similar to traditional equities in that they frequently promise holders equity in the form of ownership or a dividend payout.

Meme coins, as their name suggests, are based on a joke or a witty parody of other well-known cryptocurrencies. They usually gain popularity in a short time, with renowned crypto influencers and ordinary investors aiming to profit from short-term gains brought about by hyping them online. Dogecoin is the most popular meme coin.