Tokens are digital Assets that are specific to a cryptocurrency project and which is launched for a specific use . Token is a term used to refer to digital assets given out during initial coin offerings (ICOs) . These assets are used to perform transactions like gas fees and for raising capital .
A token compared to a coin is easy to create as you don't need to create a special blockchain for it because tokens can be created in some other blockchains . For instance if Tom wishes to create a token say ,T token, he can choose to do that on the Ethereum Blockchain .
So what that means is that a lot of technical knowledge is not required to create a token .A coin is used mainly as a means of exchange , that is , for buying and selling , but a token can perform that and even more .
SOME TOKENS AND THE BLOCKCHAINS THEY ARE BUILT ON
CONTRASTING A COIN AND A TOKEN
SECURITY TOKEN:
These are tokens that are connected to a real asset , possession .This token has some features of the capital market in conjunction with the reliability of Blockchain technology . Establishments that deal in
Security tokens are expected to have a good know your customer (KYC) protocol ;that is, all investors are verified so therefore security tokens are secure to trade in. Security tokens potentials to be the future as it helps in the raising of capitals on a blockchain and since governments around the world are looking to regulating the Crypto space, Security tokens will help the project avoid future crackdowns .
A good example of this kind of token is BLOCKCHAIN CAPITAL(BCAP) TOKEN.
BCAP token came into existence in 2017 , Giving out 10 million BCAP volume of the token. And just like mentioned above , investors avoid scams and losses because it is fixed to a physical asset or Establishment .
BCAP aims to drastically aid the transfer of funds for investments while facilitating the raising of capital for start-up companies and Establishments . What differentiate this type of tokens from the capital market is the fact that all of it's operations and functionalities are carried out on a blockchain.
UTILITY TOKEN:
Utility tokens are tokens that are sold out to the public at a price set by the company or institution.Utility tokens when bought gives the investor access to the project in the future. They can be used for payment within their respective ecosystems.A good example is the popular Utility token , Ethereum .
EQUITY TOKEN:
Equity token, just like security tokens , can be fixed to a physical asset . This token posses some sort of digital footprint or certificate that can be used to ascertain ownership of a particular Asset on a decentralized system like the blockchain technology .
Equity tokens can be in the form of of shares , Establishments, and real estate. Investors in Equity tokens have some sort of ownership and entitled to profits from the project
NON-FUNGIBLE TOKEN (NFT)
Non-fungible tokens are special in the sense that they can't be exchanged with other tokens .NFTs have their special prices and this is set by the seller. A very important use of this Tokens is that it helps to deal with the issue of Content piracy . A good example of NFT is Crypto kitties .
FEATURES OF TOKENS
Tokens Does not require a unique block chain as it can be built on any blockchain.
Tokens are assets that represent value and are used for payment but it goes beyond those as it can be used for Governing a project ,fundraising , aunctioning of Contents and artifacts,etc.
Tokens are mainly circulated through ICOs or IEOs.
TETHER(USDT)
Tether belongs to a special category of tokens called stablecoins and . was created in 2014 by tether Ltd .Tether was initially named Realcoin. Later that same year it was rebranded into the now popular Tether and started trading in 2015.
The concept of creating this tokens is to bridge the wide gap between Fiat money and Cryptocurrencies and tether helps in achieving this by maintaining a value of 1USD, thereby making it easy to be traded with other coins and a way of comparing Cryptocurrency value to Fiat currencies.
Features of Tether (USDT)
Some features of Tether includes :
Tether is an open source decentralized Token that was launched on the Ethereum blockchain
It enables the convertion of tokens will very minimal fee
Tether maintains a Stable value of around 1USD
AIMS OF THE TETHER PROJECT
The tether project aims to bring a form of stability to cryptocurrencies by maintaining the value of a real asset ; the Fiat money.
Because it uses blockchain technology, it aims to make transactions transparent and Secure from third parties
It aims to bridge the gap between Fiat currencies , like US Dollars , Euro ,etc , and Cryptocurrencies and help traders to be able to compare values easily.
ANALYSIS OF TETHER
As at the time of writing this article bellow is some trade data and charts for Tether (USDT).
CONCLUSION
It is important that one knows about tokens and coins , and the difference between them because it will go a long way to helping traders make a well informed decision regarding what asset or projects to invest in.
Hello @doyoy, I’m glad you participated in the 8th week of the Beginner’s class at the Steemit Crypto Academy. Your grades in this task are as follows:
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Thank you very much professor. Actually those images were mine. I formed the table on the word document and then screenshots it
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