Cryptocurrency or Token? What's the Difference
The biggest difference between a crypto and tokens is that crypto are the native asset of a blockchain like BTC, RBTC, or ETH. Tokens are built on an existing blockchain using smart contracts. Most commonly these are EIP-20 tokens. This blog post will explain how cryptocurrencies differ from tokens and highlight three different types of crypto:
- crypto coins (BTC)
- crypto collectibles (RBTC)
- crypto protocols (ETH).
Cryptocurrency and crypto tokens are two different things. A crypto token is built on an existing blockchain, usually Ethereum, while crypto currency is the native asset of a blockchain like BTC or RBTC. The biggest difference between them is that crypto currencies are mined by solving hash functions, while crypto tokens have to be bought with other cryptocurrencies on cryptocurrency exchanges. Usually, crypto tokens are EIP-20 compliant.
Also read about the all new Cryptex Exchange.
Ether is the most popular crypto token on Ethereum and has been around since 2015. Recently, new crypto tokens have started to appear - called ICOs or TGEs (token generation events). One of them was CryptoKitties that launched in November 2017 by Axiom Zen Company. It used smart contracts built into Ethereum blockchain to create crypto kittens which were bought with Ether just like any other crypto token. The game became so viral it eventually slowed down the whole network!
A crypto currency is mined but a crypto token doesn't need mining as they can be issued at will by anyone who knows how to code smart contracts via cryptocurrency exchanges such as OKex, Binance or Huobi. You can also find crypto tokens on decentralized exchanges such as EtherDelta, IDEX or ForkDelta.
Cryptocurrencies are typically used to purchase goods and services, while crypto tokens are more often used in applications like games, digital asset ownership, voting or fundraising. Ethereum is the most popular platform for launching crypto tokens due to its well-developed infrastructure and wide user base. However, other blockchains such as NEO or Waves are catching up fast. So far, over $11 billion has been raised through token sales with the vast majority done in 2017 alone!
The bottom line is that crypto currencies and crypto tokens are different things with different purposes. It's important to know the difference if you want to invest in this exciting new world of blockchain technology!
Cryptocurrencies are typically used to purchase goods and services, while crypto tokens are more often used in applications like games, digital asset ownership, voting or fundraising. Ethereum is the most popular platform for launching crypto tokens due to its well-developed infrastructure and wide user base. However, other blockchains such as NEO or Waves are catching up fast. So far, over $11 billion has been raised through token sales with the vast majority done in 2017 alone!
The bottom line is that crypto currencies and crypto tokens are different things with different purposes. It's important to know the difference if you want to invest in this exciting new world of blockchain technology!
- Cryptocurrencies are mined by solving hash functions, while crypto tokens have to be bought with other cryptocurrencies.
- crypto currencies are typically used to purchase goods and services, while crypto tokens more often used in applications like games or fundraising.
- Ethereum is the most popular platform for launching crypto tokens such as CryptoKitties due its well developed infrastructure and wide user base; however NEO and Waves catching up fast too.
- The bottom line is that crypto currency and crypto token different things with different purposes: it's important know difference if you want invest in this exciting world of blockchain technology!
Cryptocurrencies are mined by solving hash functions, while crypto tokens have to be bought with other cryptocurrencies on cryptocurrency exchanges such as OKex, Binance or Huobi.