In the cryptocurrency world, coins and tokens are often heard. What do they mean? Why are these two words? Could it be the same concept? Not really…
In L’of , Often hear corners and ( ). Why are these two words? Will it be the same concept. Not really.
Basically, cryptocurrency is based on a kind of, Or equivalent to the register of transactions in that currency. Blockchain is an element that guarantees the reliability of a given transaction: it is based on such a complex encryption system that it is almost impossible to forge it.One of the exceptions-extremely rare-involves 51% of attacks and assumes that the hacker manages to control more than half of the Committed to verifying a currency in the world.
thisIt is the first blockchain-based currency. According to the specifications of the currency, the currency is listed in the published white paper October 31, 2008. As early as 2011, other cryptocurrencies appeared, such as Litecoin and Namecoin. Gold:
- Namecoin is based on the Bitcoin blockchain;
- Litecoin is based on its own blockchain.
Therefore, the two currencies are different. From there, a nomenclature was born:
- A currency that relies on its own blockchain is a wedge. We often say ” Specify coins other than Bitcoin.
- The currency that relies on the pre-existing blockchain is a token.
What are the possible benefits of creating a blockchain that is different from the blockchain?? It’s simple, because over the years, certain flaws have appeared in the use of this original blockchain. Therefore, it is well known that the Bitcoin blockchain has grown too fast over the years-at the beginning of September 2021, its size was 354MB. For some time, it became clumsy. Over-verification of transactions has led to frequent criticism of Bitcoin.
Since 2014,It has its own blockchain again-we also talked about the “native” blockchain. However, a large number of cryptocurrencies subsequently appeared, also based on the Ethereum blockchain, whose specifications are stipulated in a specific document: ERC-20. Among these currencies, we can cite Bancor’s BNT, Augur’s REP, Civic…So a large number of cryptocurrencies that have appeared since 2014 are based on the Ethereum blockchain.
At the same time, some cryptocurrencies choose to define their own blockchain, such as Cardano’s ADA or Monero’s XMR.
- Ethereum with its own blockchain is a corner.
- Ethereum-based currencies such as BNT, REP, or CVC are tokens.
- Currency such as ADA or XMR are coins.
Coins become coins
There is also a situation where a currency starts as a token and then changes its nature to become a coin. Therefore, Binance’s BNB was originally a token based on the Ethereum blockchain. Then, BNB evolved into a blockchain based on itself. So it became a corner.