Cryptocurrencies are a type of digital money relying on blockchain networks. Each network is a distributed group of computers working together to process and track transactions and asset ownership.
If you want to transfer crypto to another account or even to your own hardware wallet, what network do you use? Keep reading to find out.
What Is A Cryptocurrency Network?
A cryptocurrency network is a group of computers using the same software to process and track transactions. These networks use blockchain technology to handle cryptocurrencies, non-fungible tokens, and other blockchain assets.
A blockchain is similar to a large database, though it’s publicly available for anyone to view using a blockchain explorer tool. The computers running the cryptocurrency network are called miners. Each holds an identical copy of the database, the blockchain ledger.
The software and algorithms used to process new transactions are called consensus algorithms. All miners on the blockchain network have to agree on new transactions to move forward, and anyone who tries to send through a transaction using bad data will be rejected. More miners and cryptocurrency owners lead to more secure networks in most cases.
Every cryptocurrency is assigned to a wallet, which is a unique, random identifier accessible using a software wallet or hardware wallet. Using the blockchain network, anyone can view the owner of any currency from its minting (inception) through today using semi-anonymous blockchain explorers.
The Biggest Crypto Networks
The biggest cryptocurrency networks are also tied to some of the biggest and best-known cryptocurrencies. Here are some top crypto networks to know about:
Bitcoin: Bitcoin is the oldest and best known of the current generation of cryptocurrencies. Bitcoin runs on its own proof-of-work network.
Ethereum: Ethereum is the biggest cryptocurrency network hosting other currencies besides its own Ether coin. Many additional cryptocurrencies following the ERC-20 standard use the Ethereum network, such as Chainlink, Tether, Shiba Inu, Maker, Wrapped Bitcoin, Loopring, and Basic Attention Token (BAT). It also supports NFTs using the ERC-721 and ERC-1155 standards. The Ethereum network uses proof-of-work and is transitioning to a less energy-intensive proof-of-stake model.
BNB Smart Chain (BSC): BNB Smart Chain is the official blockchain from Binance, one of the world’s biggest cryptocurrency exchanges. Binance Chain tokens include Binance Coin (BNB), Binance USD, and cross-chain smart contracts supporting Ethereum, Tether, USD Coin, Cardano, Dogecoin, and others. The Pancake Swap exchange uses the BNB Chain network for many tokens and transactions, amplifying the reach of this crypto network.
Ripple: Ripple is the blockchain provider behind the XRP coin, which is internationally popular but has received some regulatory scrutiny in the U.S. It’s known for a unique system of low-cost, ultra-fast transactions.
Cardano: The Cardano blockchain is another low-cost, fast chain supporting its native Cardano (ADA) coin with cross-chain compatibility and support for additional tokens through smart contracts.
Solana: Solana is another lightweight blockchain network supporting the Solana (SOL) coin and tokens such as Tether, Chainlink, The Graph, STEPN, Arweave, and many more.
Polkadot: The Polkadot ecosystem is led by the Polkadot (DOT) coin. This crypto network also supports Chainlink, Kusama, Compound, Ankr, 0x, Moonbeam, and others.
Polygon: The biggest currency on Polygon by market capitalization is the Dai stablecoin, which also works with most networks above. It relies on the native Polygon (MATIC) coin and supports many NFT and blockchain-based applications and games. These include Chainlink, Decentraland, Aave, The Graph, Curve DAO Token, Gala, Trust Wallet Token, Ankr, and SushiSwap.
Avalanche: Avalanche is a newer blockchain network with exciting functionality. The top currencies on Avalanche are the Tether and Dai stablecoins, followed by the native Avalance (AVAX) currency. It also supports Chainlink, TrueUSD, SushiSwap, and more.
TRON: TRON runs on its own network, and the Tron (TRX) currency also operates on the BNB Smart Chain. TRX ranks as a top 20 currency.
Litecoin: Litecoin is sometimes called “digital silver” compared to the “digital gold” of Bitcoin. Litecoin is based on the same code as Bitcoin, also called a fork, and aims to be lighter weight and faster processing.
Stellar: Stellar is the home of Stellar Lumens (XLM), a fast currency ideal for international currency transactions. It is closely related to the system behind Ripple.
If you don’t know ADA from XRP, check out our guide to some of the biggest altcoins here.
Multiple Network Cryptocurrencies
You likely noticed that some currencies work on different networks if you read the last section with close attention. Here’s where you may have a choice when it comes to what network to use to transfer your crypto.
While Bitcoin only works on the Bitcoin network, other coins work on many networks. USD Coin, a stablecoin closely connected to the Coinbase exchange, runs natively on Ethereum, Solana, Avalanche, TRON, Algorand, Stellar, Flow, and Hedera with bridges to Polygon, Fantom, NEAR, Arbitrum, Cosmos, and others.
Some cryptocurrencies are available on other networks through smart contracts. For example, Wrapped Bitcoin (WBTC) on the Ethereum network is a smart contract that holds a Bitcoin in a smart contract for every WBTC. Users can transfer Bitcoin to WBTC or WBTC to Bitcoin, allowing them to “bridge” the two networks.
Many of the biggest cryptocurrencies work on multiple networks through native support, bridges, and other smart contract tools. If you plan to send crypto between networks, you must know what you’re doing to avoid losing your currency.
Never Transfer Crypto To The Wrong Wallet
Cryptocurrency is easy to use when working with a trusted exchange, but things get more complicated when using outside wallets. You could easily lose everything in your wallet if you send it to the wrong address or connect to a fraudulent smart contract.
When working with bridges and sending crypto to other networks, it becomes easier to make a mistake. Use extreme caution when engaging in complex transactions.
There’s no right or wrong network to send your cryptocurrency, as long as it works natively and you are not at risk of losing your valuable assets due to a lack of technical knowledge.
For most people, it’s best to keep currencies on their native networks to avoid compatibility issues and costly errors.
Eric Rosenberg is a financial writer, speaker, and consultant based in Ventura, California. He holds an undergraduate finance degree from the University of Colorado and an MBA in finance from the University of Denver. After working as a bank manager and then nearly a decade in corporate finance and accounting, Eric left the corporate world for full-time online self-employment. His work has been featured in online publications including Business Insider, Nerdwallet, Investopedia, The Balance, HuffPo, Investor Junkie, and other fine financial blogs and publications. When away from the computer, he enjoys spending time with his wife and three children, traveling the world, and tinkering with technology. Connect with him and learn more at EricRosenberg.com.