Coins vs Tokens — What's the difference?

i have noticed that there are many who do not know what the difference is on a ' cryptocurrency ' (Coin) and ' Token '. This led me to make a quick explanation, so if there were any other people in doubt, then there is the answer here.

This article explores the difference between cryptocurrency coins and tokens, and why the term "cryptocurrency" is actually a malformation.

Cryptocurrency can be extremely difficult to find around and be quite confusing, especially since their underlying technology ' Blockchain ' is shrouded in computer language and terminology that is technical by nature and as the ordinary citizen does not understand anything of. This is a major obstacle for many who are interested in the crypto range. But don't worry! Read on and you will learn and understand the key cryptocurrency concepts that are good to know.

What is Cryptocurrencies?

Let us begin by understanding the definition. ' Cryptocurrencies ' are digital or virtual currencies that are encrypted (secured) using cryptography. Cryptography refers to the use of encryption techniques to ensure and verify the transfer of transactions. Bitcoin represents the first ' decentralized ' Cryptocurrency, run by a ' Public Ledger ', which records and validates all transactions chronologically called ' Blockchain '.

Although many cryptocurrencies have existed before Bitcoin, creation is an important milestone in digital currencies because of its distributed and decentralised nature. The creation of Bitcoin started the expansion of a lush and more diversified ecosystem of other coins and tokens, often considered as cryptocurrencies generally, although most of them do not fall under the definition of a "currency".

Coins vs Tokens

Categorization of Cryptocurrencies It is important to note that all coins or tokens are considered Cryptocurrencies, although most coins do not function as a currency or as representative ' Medium of Exchange '. The term Cryptocurrency is a malformation because a currency technically represents a unit of account, a value business, and an exchange agent. All these characteristics are a natural part of Bitcoin, and when cryptocurrency-space was kicked out by Bitcoins creation, all other coins that were perceived after bitcoin are generally considered a ' cryptokurrency ', although most do not meet the The above properties of an actual currency, the most common categorization of cryptocurrencies is: 1. Alternative cryptocurrencies coins (Altcoins) 2. Tokens Altcoins Alternative cryptocurrencies coins are also called ' Altcoins ' or simply ' coins '. They are often used among themselves. Altcoins refers simply to coins, which is an alternative to Bitcoin. The majority of Altcoins is a variant (Fork) of bitcoin built using Bitcoin's original native protocol with changes to its underlying tags, and therefore sees a brand new coin with a different set of features.

There are other altcoins that are not derived from the Bitcoins Open source protocol. Instead, they have made their own Blockchain and protocol that supports their built-in currency. Examples of these coins include bla. Ethereum, Ripple, Omni, Nxt, waves and Counterparty.

A general among the altcoins is that they each have their own independent blockchain, where transactions concerning their native coins occur.

Fun fact

The first Altcoin was ' Namecoin ', which was created in April 2011. It is a decentralized open source information detection and transfer system tokens token is a representation of a particular asset or right that is normally located on top of another blockchain. Tokens can pretty much represent all assets that are exchangeable and marketable, from items to loyalty points to even other cryptocurrencies!

Creating tokens is a very easy process, since you don't have to change the codes from a particular protocol or create a block from scratch. All you have to do is follow a standard template at blockchain — for example, On the Ethereum or Waves platform — which allows you to create your own tokens. For example, The crypto Saint token ' TCS ' Ej, doing just fun;

This functionality to create your own tokens is made possible by using ' smart contracts ' programmable computer codes that are self-propelled and do not need any third parties to operate. It's really super cool and I'm sure about 10 years, so running it mostly on the blockchain technology.

Tokens are created and distributed out to the public through a (ICO), which is a means of crowdfunding, through a release of a new cryptocurrency or token for financing project development. It is similar to a (IPO) for shares.

Summing up the main difference between altcons and tokens is in their structure; Altcoins are separate currencies with their own separate blockchain, while tokens operate on top of a blockchain that facilitates the creation of decentralized applications.