From Bitcoin and Ethereum to Dogecoin and Tether, there are countless various cryptocurrencies, which can make it frustrating when you’re first getting going in the world of crypto. To assist you get your bearings, these are the leading 10 cryptocurrencies based on their market capitalization, or the total value of all of the coins presently in circulation.

Rate is just one way to measure a cryptocurrency’s value. Financiers use market cap to inform a more total story and compare value across cryptocurrencies. As an essential statistic, it can indicate the development capacity of a cryptocurrency and whether it is safe to purchase, compared to others. For a cryptocurrency like Bitcoin, market capitalization (or market cap) is the total value of all the coins that have actually been mined. It’s computed by increasing the number of coins in circulation by the present market price of a single coin.

One way to think of market cap is as a rough gauge for how steady a property is likely to be. (It’s essential to keep in mind that even Bitcoin, crypto’s greatest market cap, still sees volatility.) However the same way a bigger ship can safely navigate heavy weather, a cryptocurrency with a much bigger market cap is more likely to be a more stable investment than one with a much smaller market cap. Alternatively digital currencies with smaller sized market caps are more susceptible to the impulses of the marketplace– and can see substantial gains or dramatic losses in their wake.

Market capitalization (or market cap) is the total dollar value of all the shares of a business’s stock– or, when it comes to Bitcoin or another cryptocurrency, of all the coins that have been mined. In crypto, market cap is computed by multiplying the total number of coins that have been mined by the rate of a single coin at any provided time.

5 years back, if you wanted to explore the state of the cryptocurrencies market, the first question you would ask would most probably have to do with the rate of Bitcoin. Although having currently lost much of its synonymity with crypto and blockchain technology in general, Bitcoin was still considered the crucial industry anchor and the most reputable indication of what was to come.

Computing the stock exchange’s capitalization is generally done by increasing the last rate of the stock trading by the overall number of stocks in public circulation. When it comes to ‘standard shares’, the value of shares is backed by economic principles such as overall assets (liquid assets, concrete assets and intangibles) and predicted future cash flows. As a result, traditional stock costs and overall capitalization value are quite reflective of the general state of a company. With crypto, this relationship is more unclear. Cryptocurrencies have no liquid assets, no tangible assets, and very restricted intangible ones that can back and justify their current rate and market capitalization.

Terra stablecoins and Luna operate in concert according to supply and require: When a stablecoin’s cost rises above its tied currency’s value, users are incentivized to burn their Luna to create more of that Terra stablecoin. Similarly, when its value falls compared to its base currency, this motivates users to burn their Terra stablecoins to mint more Luna. As Crypto Coins of the Terra platforms grows, so too does the value of Luna.

Terra is a blockchain payment platform for stablecoins that relies on keeping a balance between two kinds of cryptocurrencies. Terra-backed stablecoins, such as TerraUSD, are tied to the value of physical currencies. Their counterweight, Luna, powers the Terra platform and is used to mint more Terra stablecoins.