WHAT ARE CRYPTOCURRENCY, TOKEN and COIN? WHAT ARE THE DIFFERENCES BETWEEN THEM?

What Is Cryptocurrency? At their core, cryptocurrencies are decentralized digital currencies that are usually designed to be used over the internet. As the largest and most important example of cryptocurrencies, Bitcoin is not dependent on central authority like central banks, governments, but rather follows a decentralized model on the blockchain.

The feature that distinguishes it from other currencies and allows us to accept bitcoin as a form of money today is that it can be used instead of physical money in the market.

Cryptocurrency blockchains are similar to banks' balance sheets or ledgers. Each currency has its own blockchain with a constantly re-verified record of every transaction made using that currency. There are also many various fetaures that cyrptocurrency holds. The first one is anonymity. Transactions are not tied to the owers identity so it is almost impossible to link contracts with others. It is also very secure since it can be secured in virtual wallets. This means that only the owner can contral what’s inside. Finally, there is no need for permission. You can do whatever you like without permission. This specific feature give users freedom.

Every cryptocurrency has a public ledger containing its history. When you want to transact, with a cryptocurrency-owned network, you transfer ownership of a cryptocurrency to someone else. The network then calculates and adds to the ledger the cryptocurrencies you spent and did not spend to verify your transaction. In the process, a new cryptocurrency is created thanks to the work of the community members who helped make the transaction happen.

What Is Coin? Cryptocurrencies have come to life with the increasing use of bitcoin in the world since its creation in 2009. Since then, many alternatives and forms of blockchain technology, which form the infrastructure of cryptocurrencies, have been developed. Coin is the term used for cryptocurrencies created for use on a developed independent network or blockchain. Cryptocurrency, bitcoin, ether, litecoin, dogecoin are applications that are created on blockchain infrastructure and have digital value.

In Ethereum, too, ETH is used as a native payment unit for in-network development and use. Those who want to create their own token on the Ethereum blockchain pay the transaction fees on this network as this token or ETH. Launched in 2015, Ethereum is the second largest cryptocurrency by market cap, after Bitcoin. But unlike Bitcoin, it was not designed to be digital money. The founders of Ethereum set out to develop a new global, decentralized computing platform that takes the security and openness features of blockchains and uses these features in a wide range of applications.

Dividend is the distribution of dividends to the shareholders of the company in proportion to their partnership shares. It can be distributed from the net profit determined according to the annual balance sheet or from the reserves set aside for this.

Each coin has its own blockchain. The first step in creating a coin is creating a blockchain. This is quite an expensive business. There is a need for people all over the world to support and mine this blockchain. The hardware used by miners is also quite expensive. The amount of electricity used is incredible. Therefore, those who want to create coins need to invest in very significant amounts.

Let's talk about the word altcoin while talking about the coin. Bitcoin is the first cryptocurrency created. All other cryptocurrencies created and released after Bitcoin are called altcoins, in the sense that they are an alternative to Bitcoin.

What Is Token? Tokens are cryptocurrencies that are not built on their own independent blockchain or network. They run on built-in, existing blockchains and are therefore much easier and faster to create. Token has a more common name. Token more specifically identifies crypto assets that run on the blockchain of another cryptocurrency.

These assets, which can be used digitally, can also represent a product or value. The transferable token can also represent any product or service.

The major difference between a cryptocurrency and a token is that cryptocurrencies have their own blockchain, on the other hand, tokens are built on a blockchain like Etherum, Bitcoin, Waves, which facilitates the creation of decentralized applications.

A token is a form of money that represents a greater value than its intrinsic value. Initially, banks issued coins worth their weight in gold or other precious metals, but banks soon began issuing coins such as notes or coins that they could guarantee would be worth a certain amount of precious metal.

The token is based on a bank's guarantee or backing of notes or coins and is based on government laws or regulations. In some cases, the token coin may fall in value due to inflation or the government printing too much money.

Yaşam Ayavefe