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What Is the Function of Each Cryptocurrency? Top 10 Coins, Explained

Last updated: 3 July 2026 · By Spencer Li, CFTe

Each cryptocurrency coin exists to do one main job, and the top coins split into four buckets: a store of value (Bitcoin), smart-contract platforms that let apps be built on top of them (Ethereum, Cardano, Solana, Polkadot), stablecoins pegged to the US dollar (Tether, USD Coin), and utility or exchange coins tied to a specific business or use (Binance Coin, Ripple, Dogecoin). In short: Bitcoin is digital gold, Ethereum is a programmable platform, stablecoins are dollar substitutes that live on a blockchain, and the rest each solve a narrower problem (cross-border payments, lower fees, chains talking to each other, or simply a meme that took off). If you only remember one thing, remember that a coin’s category tells you most of what it is for.

Here is the function of each of the top 10 coins by market capitalization, one line each, then a table you can keep.

The top 10 cryptocurrency coins and what each one does

Coin	Ticker	Category	Primary function
Bitcoin	BTC	Store of value	A store of wealth, digital gold
Ethereum	ETH	Smart-contract platform	Decentralized platform that lets apps be built on top of it
Cardano	ADA	Smart-contract platform	Smart-contract platform with lower fees, aimed at specific use cases
Tether	USDT	Stablecoin	Pegged 1-to-1 to the US dollar
Binance Coin	BNB	Exchange / utility coin	Owned by the largest crypto exchange, Binance
Ripple	XRP	Payments coin	A banker’s coin, used to settle global payments across borders
Solana	SOL	Smart-contract platform	Smart-contract platform using proof of history and proof of stake instead of proof of work
Polkadot	DOT	Interoperability protocol	Multi-chain protocol that lets different blockchains talk to each other
Dogecoin	DOGE	Meme coin	A meme coin
USD Coin	USDC	Stablecoin	Pegged 1-to-1 to the US dollar

The rankings shift over time, and coins move up and down the list, so treat this as the function reference, not a leaderboard. A coin’s job rarely changes; its price and rank do.

What is a store-of-value coin? (Bitcoin)

Bitcoin (BTC) is the original cryptocurrency, and its job is simple: hold value. People call it digital gold because the supply is capped and nobody can print more of it on a whim. You are not really buying Bitcoin to build an app on it. You are holding it as a store of wealth.

That single function is why Bitcoin tends to be the reference point for the whole market. When people ask “what is crypto doing today,” they usually mean Bitcoin first.

What is a smart-contract platform? (Ethereum, Cardano, Solana, Polkadot)

A smart contract (code that runs automatically on a blockchain when its conditions are met) is what turns a coin from “money” into “a platform.” Ethereum (ETH) is the big one here: it is a decentralized platform that lets developers build apps on top of it, and the coin is the fuel that pays for running them.

The others in this bucket each pitch a different trade-off:

Cardano (ADA) is a smart-contract platform with lower fees, aimed at specific use cases.
Solana (SOL) is a smart-contract platform that uses proof of history and proof of stake (two ways of agreeing on the ledger) instead of the older proof of work, which is part of why it markets itself on speed.
Polkadot (DOT) sits one level up. It is a multi-chain protocol whose job is to let different blockchains talk to each other, rather than being a single app platform on its own.

Do note that, “smart-contract platform” is a category, not a single product. These coins compete on fees, speed, and how they reach agreement, not on doing fundamentally different jobs.

What is a stablecoin? (Tether, USD Coin)

A stablecoin is a coin pegged to a stable asset so its price does not swing. Both of the stablecoins in the top 10 are pegged 1-to-1 to the US dollar:

Tether (USDT) is pegged 1-to-1 to the US dollar.
USD Coin (USDC) is also pegged 1-to-1 to the US dollar.

The function is the same for both: give you a dollar substitute that lives on a blockchain, so you can hold “cash” inside the crypto system without converting back to a bank account every time. People use them to park value between trades.

What about exchange coins, payment coins, and meme coins? (Binance Coin, Ripple, Dogecoin)

These three do not fit the buckets above, and each has its own narrow job:

Binance Coin (BNB) is owned by the largest crypto exchange, Binance. Its function is tied to that business and its ecosystem.
Ripple (XRP) is a banker’s coin. Its job is to settle global payments across borders.
Dogecoin (DOGE) is a meme coin. That is the honest description, and it is worth being honest about it.

The one thing the category does not tell you

Knowing a coin’s function tells you what it is for. It does not tell you whether it is worth buying, or when. A scanner can sort all ten of these into buckets in a second; it will not tell you which one fits your plan, your risk, or your timing. That judgment is yours, and it is the first of the Five Edges that no tool trades for you.

Personally, I treat the function as step one, the homework, and the actual decision (size, entry, exit) as a separate question entirely. Understanding what a coin does is not the same as having a reason to own it.

FAQ

What is the function of Bitcoin versus Ethereum?
Bitcoin (BTC) is a store of value, often called digital gold. Ethereum (ETH) is a decentralized smart-contract platform that lets apps be built on top of it. One is meant to hold value; the other is meant to run code.

What is a stablecoin, and which top coins are stablecoins?
A stablecoin is a coin pegged to a stable asset so its price stays flat. In the top 10, Tether (USDT) and USD Coin (USDC) are both stablecoins, each pegged 1-to-1 to the US dollar.

What is the difference between a coin and a smart-contract platform?
A plain coin mainly moves or stores value. A smart-contract platform (Ethereum, Cardano, Solana) also lets developers build apps that run automatically on the blockchain. Polkadot is a related case: its job is to connect different blockchains rather than host apps directly.

Is Dogecoin a serious cryptocurrency?
Dogecoin (DOGE) is a meme coin. It trades like any other coin, but its origin and main identity are as a meme rather than a specific technical use case.

Do these crypto functions change over time?
A coin’s core function rarely changes; what changes is its price and its rank by market capitalization. Use the function as a stable reference and check current rankings separately.

Want the bigger picture behind these coins? Read the pillar: The Ultimate Guide to Blockchain and Cryptocurrencies.

New to all this? Grab the free 15-Minute Swing Trading Starter Kit. It’s the exact routine I use to scan once a day and trade any market, crypto included, in 15 minutes.

About the author. Spencer Li is the founder of Synapse Trading and a Certified Financial Technician (CFTe) with 15 years of trading across stocks, forex, crypto, commodities, and bonds. His trade log is public, 404 trades, losses left in. He teaches low-risk swing trading in 15 minutes a day, one system for any market.

Education, not financial advice. Synapse Trading is not licensed by MAS to advise on investment products. Trading carries risk of loss; past performance is not indicative of future results.

The Ultimate Guide to Blockchain and Cryptocurrencies (pillar) · What is Bitcoin and how does it work · How to start trading cryptocurrency