Although it often goes unnoticed by those who can’t distinguish them, there are clear differences between assets of the blockchain, ICO, cryptocurrencies, and tokens. Next, we are going to see them one by one.
The currency that we will find mostly in English “coin” is used to make payments. And in the world of cryptocurrency, we refer to a currency when it is only valid as a means of payment and as a representative value. An example of a cryptocurrency that we see as currency is Bitcoin. They operate through their own blockchain. Ether, Ripple, Litecoin are other examples of currency. There is a “dispute” among the cryptocurrencies for taking a prominent position in the field of digital transactions and to be the one that will finally be used as a means of payment.
Ico is short crypto-term for Initial Coin Offering (initial supply of coins). It is a model used for projects and cryptocurrency companies to have a good start. However, you have to be very careful and be well-informed before participating since some are scams or badly managed projects, and you can lose a lot of money.
A token can have many more functions than a coin. It is not limited to being a simple means of payment but can be an action or product test. A token operates in an existing blockchain that supports smart contracts. Ethereum and Waves are frequently used for this. They have their own objective on which they are really focused. When you see a new project of an ERC-20 token, it means that it is based on the ERC20 protocol, that is, it is executed in the Ethereum blockchain. A token allows everything to be marketed digitally. A token can represent a house or points saved in a store, for example. Each cryptocurrency project has its own interpretation of its token. Creating a token is easier than creating a currency. It is more work to create a blockchain than to incorporate a token into an existing blockchain. The ICO’s are used to raise money for the development of new protocols or projects. People invest in ICO hoping that the price per token increases. Therefore, the main difference is in its structure, the currencies have their own blockchain, and the tokens are made on that blockchains.
Cryptocurrency projects are still in the initial phase. We can mention them as products in operation. The coins are used as means of payment in some places, and the tokens representing a platform still in development. If we observe the market capitalization of both we can see that the currencies and ICO’s with the intention of changing to their own chain of blocks have better positions within the ranking. If the team and the idea behind the token are good, do not be discouraged because it is just a token, it can be a lucrative investment. It should be noted that the largest cryptocurrencies in terms of market value and the most lucrative ICO are included to top cryptocurrency exchanges.
What is the best exchange to invest/buy tokens, ICO, and cryptocurrency?
Currently, there are many quality and trust exchanges on the market where you can invest in tokens, ICO, and crypto projects, but before you buy or trade cryptocurrencies, you have to take into account a few aspects.
- Does exchange accept money as payment or just cryptocurrency?
- What are the exchange deposit/trade/withdrawal fees?
- What tokens, ICO, and cryptocurrency are available on the exchange?
There is a time-consuming process for choosing the best cryptocurrency exchange, so here is a list of top crypto exchanges recommended to use, how to use them, and other important features you need to know before invest.
Originally published at https://www.nigeriabitcoincommunity.com on April 12, 2018.