IQeon ABC: what’s the difference between coins, altcoins and tokens?

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18 February 2021
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IQeon ABC

Friends, we are launching a new section "IQeon ABC", in which our team will try to simply and easily explain complex concepts from the world of digital assets. Today we'll talk about coins and tokens. It’s going to be informative!

Every active crypto user realizes that there is a huge difference between tokens and coins at some point. Today we will take a closer look at what coins, altcoins and tokens are, how they differ, how they can be used, and also give examples of each of the assets.

What is a coin?

There is some kind of irony: until recently, Binance Coin was not a coin, but a token, even in spite of its name. Why? Because only those digital currencies that operate in their own independent registries fall under the category of coins.

Simply put, a coin is an asset that has its own blockchain. So, BTC exists in the original Bitcoin register, ETH is used in the Ethereum blockchain, XMR in the Monero registry. So the giant company Binance developed its own Binance Chain blockchain and transferred the BNB token to it, turning it into a full-fledged coin.

Coins are very similar to money in real life: they are fungible, divisible, and limited in supply. Therefore, it’s usually assumed that they can be used in the same way as physical cash: to pay for goods and services, transfer money, store savings, and so on.

Among the coins, there are also altcoins, which received their name due to the fact that they are an alternative to the oldest cryptocurrency – Bitcoin. Many altcoins were forked from BTC and developed using its open protocol. A prime example is the meme currency Dogecoin, which is adored by Elon Musk.

To figure out the kind of digital currency, just ask yourself a question: is it a coin with its own blockchain, and is it not Bitcoin? If the answer is yes, then this is definitely an altcoin.

What is a token?

A digital asset that can be used in the ecosystem of a project is considered to be a token.

Today, the founders of crypto startups consider it unwise to develop their own blockchain. They simply create tokens using the famous Ethereum platform. Assets created on the Ethereum blockchain are known as ERC-20 tokens.

The vast majority of them are designed not as a means of payment but as access to a decentralized application or project functions.

To make it clearer, let's analyze the concept of a token using the example of IQN. This asset allows users to participate in gaming matches on the IQeon.com platform. You can get it for taking part in various contests and activities held by the platform team, for winning a monthly competition, completing steps in the bonus system, and also as a bonus or a gift from another player.

Another outstanding representative of tokens is the Basic Attention Token, created to improve the quality of digital advertising. So, with the help of BAT, advertisers can launch a promotional campaign and distribute it to browsers, and users who have watched the ad can receive BAT as compensation for the time spent.

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Now you know the difference between tokens, altcoins and coins. Join our official Telegram-community – there are many interesting articles ahead, in which everyone can find something useful!

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