Cryptocurrency Coins And Tokens
Cryptocurrencies are trending in financial the market for quite a lot time now. We hear many cryptocurrency related terms as the crypto coins, crypto tokens, blockchain etc. People often confuse between crypto coins and tokens, many think they are one and the same. But in reality, crypto coins or the altcoins are much different than the tokens. Let us see what coins and tokens are and how are they different from each other.
Although the coins and tokens are different from each other, they are both known as cryptocurrencies. The cryptocurrency is commonly categorized as:
1) Crypto Coins: A crypto coin is a digital asset that works on its own blockchain. The most common examples of crypto coins are Bitcoin, Ether, and Litecoin that are specific to their own blockchain technology. The crypto coins can be transferred from one person to other digitally, that means no physical coins are exchanged but the digital data is transferred from one person to other. Read this review to know how QProfit System can help in online trading.
Uses of crypto coins: These digital coins can be used in the same way as the real-life money to buy goods and services.
- You can give or receive it as money
- You can store it and later use it or trade it for something else
- You can use it for buying goods and services.
Though few of the digital coins can be used only as money, like the Bitcoin, a few others can be used as more than money, like the Ether, DASH, and NEO.
Ether (ETH) can be used as a service fee on Ethereum network for transactions. Ethereum can be used to build tokens too but you still need Ether to send tokens.
NEO: Just like Ethereum you can build tokens on NEO too. NEO is staked in crypto wallets to earn a dividend called GAS. This GAS can be used to pay transaction fees the same as the Ether.
2) Tokens: Tokens are mainly used in dApps that are the decentralized applications. The developers who create the tokens can decide where to use these tokens and also how many units to make with the help of tokens. The tokens are usually used to initiate the features of applications they are created for. For example, Binance has a token which can be used for trading and offers 50% fewer charges.
The basic difference between coin and token is that coins are native to blockchain while tokens are usually built based on another blockchain like Waves, NEO or Ethereum.