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Is there a difference between tokens, coins, digital currency, and virtual currency?

In short, yes. There are big and small differences between tokens, coins, digital currency, and virtual currency. For example, when JPMorgan Chase JPM Coin was introduced as a “digital coin,” Facebook Libera was touted as a cohesive ” cipher .” This may be one of the reasons why lawmakers around the world are so concerned about these cryptocurrencies.

However, while JPM Coin and Libra differ in design, in both cases, decentralization experts have not accepted the two as “cryptocurrencies” but as “digital money” or “digital currency,” and are essentially This is because both are managed by companies and are therefore centralized. Unfortunately, this is not so simple: while the main idea of ​​cryptocurrencies is decentralization, some of them are somewhat centralized.

Thus, cryptocurrencies are digital or virtual currencies (the semantic subtlety of the two will be discussed later in this article) constructed by strong cryptography that makes them highly secure and immutable. Most cryptocurrencies are based on blockchain technology. Blockchain is a distributed general ledger made up of decentralized networks of computers. However, it is also technically possible to have cryptocurrencies independent of the Chinese blockchain. Digicash, one of the earliest encrypted electronic payment methods in the early 1990s, did not have a China blockchain.

It is even more complicated. There are subcategories within these traditional cryptocurrencies (based on blockchain). For example, NEO is a coin, while Binary Coin (BNB) is a token. As you can see, there is a lot of confusion in the crypto world about these terms, which this article seeks to clarify.

What is Kevin?

There are digital coins that are native to the Chinese blockchain themselves.

Bitcoin (BTC), Monroe (XMR), and Atrium (ETH) are examples of encrypted “coins.” But what do these have in common? All of these are in their independent general ledger: Bitcoin runs on the original version of the Bitcoin blockchain, Atrium is used through the Atrium blockchain, Monroe is available on the Monroe blockchain, and so on. All of these can be sent, received, and extracted.

As the name implies, coins have similar capabilities to money: they are interchangeable, divisible, and portable, and their supply is limited. So, commonly, the cryptocurrency is used as cash: to pay for goods (although their acceptance for retail has been low so far). However, there are exceptions: although Atrium has all the characteristics of a coin, it goes beyond its own “money” rules because it is used in the Atrium blockchain to facilitate transactions.

Another term is ” Alt Quinn. “ This title is derived from the fact that they act as an alternative to bitcoin (the original cryptocurrency). Many altcoins are bitcoin forks and forks developed using the open-source bitcoin protocol – such as LightCoin (LTC) and dogecoin (DOGE) – but Atrium and Monroe are also on a whole new blockchain. Made, known as Altcoins. Therefore, when defining an Altcoin, the question must be answered: Is the Altcoin a cryptocurrency with its blockchain (other than Bitcoin)? If the answer is yes, then it is a coin.

So what is a token?

Digital assets that can be used within the ecosystem of a particular project.

The main difference between a quin and a token is that the token needs another blockchain platform to run. Atrium is often one of the most common platforms for making tokens because of its smart contract capability. Tokens made in the atrium fold block are commonly known as ERC-20 tokens; For example, the most famous stable coin in this industry, the Tetra (USDT), is like this. Of course, there are other platforms for tokens, such as Neo or Waves.

Although tokens can be used as a means of payment (so-called “token currency”), their purpose is different from that of coins.

Many tokens are designed to be used in decentralized applications (DApps) and their network. These are called utility tokens. The main purpose is to give the token holder access to the performance of the project, Like the Basic Attention Token (BAT). BAT is an ERC-20 token. (Ie, its blockchain platform is Atrium) and was built to promote digital advertising. Advertisers buy ads with BAT tokens, which are then distributed to publishers and Internet users, respectively, as an alternative to hosting ads and as an alternative to viewing them.

The following are security tokens that represent a personal investment in a project. Although they take their value from the startup that sponsors the project, they do not give the token holder real ownership of that startup. People buy these tokens only with the possibility of increasing their price in the future; That’s why all ICOs boom. But unfortunately, people are buying valuable tokens in the form of instrumental tokens. Stock tokens are usually closely monitored and enforce comprehensive “Know Your Customer (KYC)” policies other than Quinn’s initial public offering.

What is the difference between virtual currency and digital currency? Do these two words have the same meaning?

No, One is more abstract, and the other is more tangible.

This is easier said than done. “Digital currency” is a general term used to describe electronic money. Whether it is a virtual currency or a cryptocurrency (these two terms are also different). The concept of digital currency was first introduced in 1983 by a research paper by David Chaum, who later implemented it in the form of Digicash.

The defining characteristic of digital currency is that they exist only digitally or electronically and are intangible, unlike real dollar bills or coins. These can only be owned and spent through electronic wallets or connected networks. There is usually no intermediary (no bank), so transactions are instantaneous, and very low fees are applied. The good news: digital currency and digital money are one.

Thus, coins, tokens, and virtual currencies are all digital currencies.

Virtual currency is a different entity, although it is digital in the definition. Since the European Central Bank first coined the term in 2012, virtual currency is a “digital currency in an uncontrolled environment” published and managed by its developers as a payment method among members of a virtual community. “It is used especially.” Is. Examples of non-crypto currency virtual currencies are currencies integrated into video games, such as World of Warcraft tokens, GTA Online cash cards, or FIFA points, which are among EA Sports’s most trusted games. These are usually located in the relevant game space and are used to unlock rewards such as items or animations.

Thus, unlike ordinary currencies or even certain digital currencies, virtual currencies cannot be issued by a central bank or another banking regulator, indicating the instability of these currencies. Hence, cryptocurrencies are completely separate from virtual currencies. At least according to the AP Stylebook, they should not be confused, while both are in the large group of “digital currencies.”

Are these definitions universal?

No, because this space is constantly evolving.

Cryptocurrencies, as we know, have only been around for ten years, while most government agencies have only been paying attention to them for three to five years, and that is since the popularity of bitcoin has grown significantly. Its value increased. It is noteworthy that Libera Facebook has sparked another stir among financial watchdogs: Some countries are setting up working groups to examine what Libera is and how it can be controlled.

Thus, the definition of cryptocurrencies varies between, or even within, jurisdictions: In the United States alone, five different legislatures have proposed five different definitions of cryptocurrencies based on their territory. Thus, the IRS treats cryptocurrencies and other virtual currencies as assets. The Securities and Exchange Commission considers that these represent securities. The Financial Crimes Network believes that Ramzars is the same money. In addition, the Japanese cryptocurrency regulator defines cryptocurrencies as “asset value,” and the former Russian central bank governor formerly called bitcoin a “currency substitute.”

In addition, given that this space is evolving at a tremendous rate and that lawmakers are often lagging, it is fair to assume that new terms for digital currencies will emerge in the future, which makes them up-to-date. Be relevant to common expressions and terms