✍Aenco Academy #24 Coin vs Token: What’s the difference?
𝐸𝒹𝓊𝒸𝒶𝓉𝒾𝑜𝓃𝒶𝓁 𝑒𝓈𝓈𝒶𝓎𝓈 𝓈𝓊𝓈𝓉𝒶𝒾𝓃𝒾𝓃𝑔 𝓉𝒽𝑒 𝒜𝑒𝓃𝒸𝑜 𝒞𝑜𝓂𝓂𝓊𝓃𝒾𝓉𝓎 𝒶𝓃𝒹 𝐸𝒸𝑜𝓈𝓎𝓈𝓉𝑒𝓂
Coins and tokens can be confusing topics to people who are new to cryptocurrencies. Some may confuse both terms with one another. In fact, “coins” and “tokens” are two very different things. Join us this week as we venture on the topic ‘Coin vs Token — What’s the difference?’ at Aenco Academy #24.
1. What is a coin?
A coin is an asset that is native to its own blockchain. All digital coins exist as data on an enormous global database, which is called the blockchain. A blockchain keeps record of all the transactions and is verified by computers across the globe. Transactions of digital coins can be made between users without physical coins. These digital coins can be used to transfer money, meaning that users can give and receive value during transactions. There is also a store of value which can be saved and later exchanged for something useful. Moreover, it can be used as a unit of an account, you can purchase goods or services with them. In addition to that, some of them have more features than just being a digital form of money. For instance, Ether (ETH) is used to fuel transactions on the Ethereum network. NEO (NEO) is staked in a wallet to earn a dividend. Acquiring enough Dash (DASH) gives users the right to vote on important decisions for the Dash network.
2. What is a token?
Tokens are created on existing blockchains, they are given out through Initial Coin Offering, also known as ICO, it is very similar to a stock offering. They can be seen as value tokens, such as Bitcoins, security tokens which are used to enhance the security of your account, or utility tokens which has a specific usage. Tokens represent value but they are not in themselves of value. Most tokens are used with decentralized applications and operate on top of a blockchain that acts as a tool for the creation and execution of decentralized apps and smart contracts. Tokens are not so much meant to be used as money as they are used to perform different functions. They can be a type of encryption, which are the long lines of numbers and letters representing the crypto used in a transaction, such as a bill payment or transfer. Lastly, they are also widely used to fundraise for crowd sales.
We know our community has high hopes on the updates being made on the AENX v2.0, and we are working tirelessly to ensure future upgrades can be launched timely and suiting the community’s expectation. As we are launching our AENX v2.0 version, we encouraged our potential users to complete the KYC forms not just to enhance account verification, but to enjoy maximum benefits and discounts, too! Stay tuned for more updates, and we will be back next week for a new topic!
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