![]() ![]() Why are there so many types of cryptocurrency?īlockchain technology is open source, meaning any software developer can use the original source code and create something new with it. Ether is an example of a token, which is used to make transactions on the Ethereum ( CRYPTO:ETH) network. There has even been experimentation using NFTs with physical assets, such as real-life art and real estate. They can represent digital art (like with NFTs, or " non-fungible tokens" that certify something as unique). Tokens are created on top of an existing blockchain and can be used as part of a software application (like to grant access to an app, to verify identity, or to track products moving through a supply chain). Tokens, on the other hand, have far more uses than just digital money. Examples of coins include Bitcoin and Litecoin ( CRYPTO:LTC). It can be used to store value and as a means of exchange between two parties doing business with each other. It's important to keep them straight.Ī digital coin is created on its own blockchain and acts in much the same way as traditional money. Although they may sound like interchangeable terms, there is a difference. When discussing cryptos, you may hear the terms "coin" and "token" frequently used. tokensįirst things first: Know the difference between a coin and a token. Bitcoin's success has put blockchain on the map and put its potential to decentralize and improve the digital economy on a path to disrupting the status quo. Because it enables peer-to-peer payments without a third party (like a bank), it has set off a tidal wave of other cryptocurrencies and digital assets making use of blockchain technology.īlockchain is a digital public ledger where information on each transaction receives a unique "hash" (or identity) and is added to the end of the ledger. Since its creation in 2009, Bitcoin ( CRYPTO:BTC) has become a revolutionary digital currency.
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