VakaFX invites readers to find out what is the difference between a coins and a tokens in cryptocurrency through the article below.
A majority of people, this is inclusive of investors, assume that coin and token are indicative of the same thing. There is a pressing need to clarify the difference between coins and tokens. Though they are often viewed as being the same, they are not.
While both are theoretically crypto, they were never intended to be categorized as the same. The perception that coins and tokens are the same is a gross misconception.
What is a coin?
The coin also has a guest name is Altcoin or also known as Cryptocurrency Coin is a form of digital money, created by encryption technology, store value over time.
Basically, Coin is equivalent to currency. The most typical example is Bitcoin, the largest cryptocurrency in the market, Bitcoin is based on public and distributed Blockchain technology with a common ledger, all transactions are transparent. Data is shared and shared among participants on the Blockchain network.
Blockchain technology ensures transparency and minimizes fraud. Litecoin, Namecoin is one of the cryptocurrencies created based on the same protocol as Bitcoin, the coins operate on the Blockchain platform and create its own unique features such as Ripple, Monero.
The primary traits of coins are
+ They are connected to the public blockchain. Anybody can join and participate
+ They can be sent, received, and mined
Below are a few use case scenarios with Bitcoin (BTC) as an illustrative example.
+ BTC can be utilized to make payments for services all over the internet as well as in real-world business
+ It can be stored for protracted periods of time with nothing happening to it; you can subsequently exchange it for something of equal value later
+ The things that you purchase can be paid for in BTC as well
What is a token?
Tokens are digital assets issued in ICO projects. Tokens are considered to be digital currencies operating on the basis of another cryptocurrency. Tokens are used to raise funds for startups. It can be used as a payment method within that ICO project's ecosystem, performing the same functions as the Coin, but the main difference is that it allows those who hold these tokens to participate. into the system network.
For example Token VEN, TRX is based on Ethereum ...
The token not only demonstrates the function of digital assets but also represents the company's capital, allows access to project functions, and more.
What types of tokens are there?
There are two types of tokens: Utility Token and Security Token
What is the Utility Token
Utility Token is a utility token, it was born to serve a project with specific goals and features. For example, the Dock.io project token has payment and voting features; Binance's BNB token features a discount on transaction fees ...
What is a security token?
Security Token (Securities Token) is a form of electronic stock issued in the form of tokens. You will get profit based on the number of shares you own in that project. Security tokens also allow you to vote or participate in deciding a number of project tasks.
Tokens vs Coins: Their Purpose
Most tokens are intended to be utilized with decentralized applications or dApps. When developers are making their proprietary token, they determine the number of units they want to make and where these tokens will be sent when they are created. At this stage, the developers will pay part of the native crypto on the blockchain they are developing the token on.
After development, tokens are typically used to activate features of the app that they were developed for.
For instance, Musiccoin is a token that enables users to access different features of the Musiccoin platform. This could be viewing a music video or streaming a song. Other tokens are developed to be indicative of a physical thing. If you wanted to sell a real estate property using a smart contract, you can’t exactly put property physically up on that specific contract, can you? So instead, you develop a token that is representative of that real estate property.
WePower (WPR) is another good instance of a token that is representative of a physical thing. It denotes in electricity. The WePower is a dApp project that enables users to purchase and sell electricity on the blockchain, utilizing smart contracts. Its token, WPR, indicates a specific amount of energy.
Where to buy tokens?
Tokens are issued from ICOs, so you can buy them directly from pre-ico or Crowdsale of those ICO projects.
If the token has passed the public offering, if you want to buy it, you must wait for the token to be listed on the exchanges.
In addition, some tokens will be listed on decentralized exchanges such as Kyber Network, Bancor, EtherDelta so you can buy them directly at these exchanges and store them in your wallet.
Token storage wallet
To store tokens, you need to know which Blockchain platform it works on.
+ Token of Ethereum: You can store at Ethereum wallet such as MyEtherWallet, MetaMask, Eidoo, ImToken ...
+ NEO Token: You can store it at NeoTracker wallet.
+ Stellar Token: You can store it at Stratis Wallet.
VakaFX has just introduced you to what the concept of a token is, what a coin is, and compares the difference between a token and a coin. In short, Coin is a payment method and Token represents the company's capital, providing access to products or services with many different functions. Coins are considered as currency, so you can use them to buy and sell everything. Coins can buy tokens, but tokens cannot buy coins. The coin operates independently, while the token has a specific purpose in the project's ecosystem.