COINS AND TOKENS
What is a token: A token is an item used to represent or replicate something else.
It serves as a symbol for something else.
CRYPTOCURRENCY, COINS AND TOKENS
CRYPTOCURRENCIES:A cryptographic system-based digital currency.
This currency can be used to carry out transactions, make payments and buy goods or pay for services just like our fiat currencies.
COINS:A coin is a cryptocurrency built on a blockchain.
Every blockchain has its coins, and on this blockchain, you can create tokens. These tokens are not coins because they don’t help to run the blockchain but they act like a coin.
TOKENS: A token is a cryptocurrency that exists on top of a pre-existing coin or blockchain.
Therefore tokens are cryptocurrencies without their native blockchain, so they rely on an existing blockchain.
TYPES OF TOKENS
There are two major types of tokens these are utility tokens and security tokens.
UTILITY TOKENS: A utility token is a token that provides products or services.
Utility tokens can be used on the blockchain in which it was launched to make orders and get discounts.
Utility tokens provide users with various products and services and can be seen as gateways.
SECURITY TOKENS: Companies sell cryptographic assets to raise funds for their operations through a process known as “initial coin offerings”. Such tokens represent ownership investments or participation in the ecosystem and provide rights to the values of the ecosystem. These tokens are known as security tokens.
They act as a form of bonds, stocks or investments in the ecosystem.
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