Some of the confusing questions Among newbies are; is crypto a token? how is coin different from crypto ? These questions will be addressed in this article.
Crypto is one of the words that a person gets to hear often, even before understanding the concept and activities that are involved in it, the confusion about the words token, coin, and crypto is because the three concepts have similarities in usage when it comes to the ears of any newbies, especially when the newbies are close to a crypto trader that uses the three words all the time.
Token, Crypto and Coin.
Token, coin, and crypto are among the terms that are always used by traders, especially when it comes to buying and selling cryptocurrencies, although the terms have their similarities, they are different in some aspects.
Explanation of what Cryptocurrency is.
The word crypto means “secret supporter” while currency is “money it other items that is used for transaction”
Cryptocurrency on that note is simply a currency which is not physical as can be used for buying and selling.
One of the mode of exchange between buyers and sellers in the digital world is through digital currencies, on that note, Crypto currency is a digital currency that is used in the digital world as a mean of exchange.
cryptocurrency is not a physical currency, just like there is fiat money in the physical world for transactions, cryptocurrency is used to buy goods and services and can also be used as a store of value in the digital world.
In the community of crypto lover, the first crypto was Bitcoin, it later led to the creation of so many Altcoin like Ethereum (the largest Altcoin), Cardano, Ripple, and Litecoin.
What is A crypto coin?
A coin is a term used in the crypto world to refer to the currency used for buying and selling.
the general term used to addressed crypto coin is “cryptocurrency“.
For instance, fiat money in the physical world today is printed in papers, and in polythene in different countries and it is used for transactions, although few countries still uses physical coin, the same is in the digital world, the currency used is referred to as “coin”.
To sum it, just like we say physical money, coin is a digital money or cryptocurrency (crypto money).
What is a Token in the Crypto World?
A token is also a digital asset just like crypto coin, they can be regarded as a digital or physical object which is in DAO (decentralized autonomous organization).
A token does not have a blockchain that they are build on, but can also be called an Altcoin, since they are also digital assets and can operates on DAO, they can only be built on any blockchain that they founder chooses, a lot of token However, are built on Ethereum Blockchain.
One of the similarities between a digital is that it can also be bought and sold just like a crypto coin. Some of the tokens we have is utility token, NFTs and governance token.
Is there a difference between Crypto, coin and token.
There is little difference between the three concept, because some of them can not be used separately, for instance, when talking about a means of payment in the crypto world, you can not talk without using cryptocurrencies which is the same as “crypto coin”
Also token and Crypto have similarities and difference, some of the similarity is that, they are operating on blockchain technology, they are both digital assets, they can be used as a means of exchange (buying and selling).
One difference between the two is that token is like an assets that can represent physical or digital object, while Cryptocurrency is more of a digital money, although is can be regarded as an asset.
In conclusion, token, coin, and crypto are used interchangeably in the world of crypto and any newbie going into the world of crypto should equip himself with the basic knowledge of this article so that he can make decisions that can benefit him in the future.