Instead of shares, ICOs issue coins or tokens to their investors. It is comparable to an IPO (Initial Public Offering), which is the public sale of the shares of a company for the first time. ICO stands for 'Initial Coin Offering', and is the most common way for companies in the cryptocurrency space to raise money for their business via crowdfunding. As the technology evolves, the roles for coins and tokens will become clearer, as will the language we use to describe them.Įssentially, any cryptocurrency that exists outside of the top ten cryptocurrencies by market cap. While there is a distinction between coins and tokens, the waters are still a little muddy at this stage. Holders of tokens often get value from them beyond speculative returns, such as being able to vote on certain business decisions or technical changes, earn dividend payments for holding or staking tokens, or to get discounts on, or access to, services. The purpose of a coin is to act like money - to allow transactions of products and services to occur.ĭepending on the coin, it can be seen as a store of value, unit of account or medium of transfer (exactly like fiat currencies – dollars, pounds, yen etc.).Ī 'token' is also seen as a means of payment, but with an added layer of functionality above it. A lot of cryptocurrencies are described as being either a 'coin' or a 'token' – more on those later in the article.Ĭryptocurrencies are widely considered to be the future of money.Ī cryptocurrency 'coin' is seen as a means of payment. Bitcoin was the first decentralised cryptocurrency, but there are now thousands.Įven though the word cryptocurrency is used as a general term, most cryptocurrencies do not fall under the definition of a 'currency'. This makes blockchains extremely secure and highly resistant to fraudulent behaviour or human error.īlockchain technology is set to disrupt industries all over the world in the coming years – especially industries where there are a high number of intermediary or third-party companies.Ĭryptocurrencies are digital currencies that are secured using cryptography, and built using blockchain technology. Once a transaction has been confirmed and listed in the blockchain, it is impossible to change or tamper with. A blockchain is a secure, global, immutable public ledger that records every transaction, chronologically, on the network.īlockchains update regularly, confirming transactions. The blockchain is the underlying technology upon which cryptocurrencies and DApps (more on them later) are built. Well, with that in mind, we've created an introductory, easy-to-digest cheat-sheet for anyone who wants to learn a little more about cryptocurrencies. With such an overwhelming amount of information out there, where do you start?
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