Trading cryptocurrency has become very popular because it allows multiplying your initial investment even within one day. The crucial thing here is deep knowledge of the market and a quick reaction to its fluctuations. Another essential thing is choosing a credible cryptocurrency trading platform. There are many reliable services for safe operations with crypto. Most of them belong to a centralized type:
- Binance
- WhiteBIT
- Huobi Global
- Kraken
- etc.
These platforms offer probably all existing types of cryptocurrency. Moreover, they allow trades and deposit and withdraw funds in fiat dollar, euro, etc.). Let’s see what crypto types exist.
Cryptocurrency Types
All crypto can be divided into the following types:
- Coins
- Altcoins
- Tokens
Coins are assets that are created based on their blockchain and operate there as native tokens and currency to pay for transactions. So if you hear “coin” that means the project has its own network. Examples: Bitcoin (Bitcoin blockchain), Ethereum (Ethereum blockchain), etc.
The next classification type is altcoin. The name comes from “alternative coin”, which means altcoins were developed as alternatives to Bitcoin. The developers aimed to improve Bitcoin features and implement those updates in altcoins. An example: Litecoin, Bitcoin Cash, etc. Some altcoins have their own blockchains (Ripple, NEO).
Tokens. These assets may also be called altcoins, but they are always developed on top of another blockchain. Unlike coins, tokens are not created on their own independent blockchains. Tokens are developed on top of existing platforms. You can clearly see the principle of placing tokens using the example of a building. Just like the foundation for a building, blockchain is the foundation for a coin. Imagine that a coin is a new building with its own foundation, while a token is an additional construction to an existing building. In order to build a house, you do not need to create a foundation, but you can construct it on top of what already exists. That is, tokens are assets that are based on existing blockchains. These were the essential differences between existing cryptocurrency types. You will find a full range of crypto of all types on popular and credible crypto exchanges.