Cryptocurrency coins: what to know about them

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Cryptocurrency coins: what to know about them

The rise of the industry over the past two years has attracted many investors as well as bystanders. While some saw a lucrative opportunity to make money relatively quickly, others followed a more patient approach by reading and understanding the business. The new industry involves a lot of new terms to refer to digital assets and people often use them interchangeably.

Many people believe that a coin and a token are the same. All coins are considered token, but not all coins are considered criptocurrency coins at a basic level.

A utility of criptocurrency can help distinguish a coin from a token. A coin is used to trade currency and store value, and is native to a blockchain. A coin is similar to a coin, but it tends to use a coin's blockchain. Its native coin is Ether. A number of other tokens like BAT and Loopring operate on this block chain.

Coins are a proposed medium of exchange. On the other hand, tokens represent an asset. The token can be held for value, traded and staked to earn interest. Some examples of token are Uniswap, Chainlink and Polygon.

Smart contracts are a must for trade in cryptocurrencies and they are handled by smart contracts.

When a token is spent, it moves from one place to another. The change in ownership must be manually handled, because NFTs are one-of-a-kind items. A coin doesn't have to be moved from one place to another. All transactions are recorded on a blockchain.

A token represents what a person is capable of owning, while a coin denotes what they're capable of owning. Everybody has used a token at least once in their life, even if not in this form. When you sell the car, you transfer the value of the title to another person.