Everything you need to know about tokens

A cryptocurrency is basically a digital currency. Transactions done with cryptocurrencies are more secure than traditional fiat ones, thanks to being recorded in a decentralized ledger — blockchain. Cryptocurrencies have their own native blockchain, for example, Bitcoin (BTC).

The biggest difference between a cryptocurrency and a token is that cryptocurrencies are the native asset of a blockchain (for example, Bitcoin or Ethereum), while tokens are built on existing blockchains, using smart contracts.

Altcoins are associated with any cryptocurrency apart from Bitcoin. Altcoins and tokens’ structures are the main reason to separate the two: altcoins are cryptocurrencies with their own blockchain, while tokens, again, operate on top of a blockchain that facilitates the creation of decentralized applications.

Token use cases:

Types of tokens

Fungible tokens VS. Non-fungible tokens

Token functions

Token standards



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