Grassroot Crypto Education (Vol.5) - Coins and Tokens | 10% Payout to @steemkidss
Introduction
It's another volume of our grassroot crypto education and a huge change is made as regards participation this time around, you will get to know about it at the bottom of the page sooner. We have come this far and many thanks to the organizers and the Steemit team that has been of constant support. This is volume 5 of grassroot crypto education and today, we would be looking at the topic Coins and Tokens.
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Background to the Study
As a beginner in the crypto ecosystem, you must have heard of coins and tokens before, and most times you considered coins and tokens another term used for cryptocurrency. Yes, you are right, cryptocurrency is considered as digital coins and tokens but these two words used in cryptocurrency have separate meanings and this is what our education for today would focus on.
In addition, we can't talk about these twos without opening the basis to blockchain because understanding the blockchain itself open the basis to this study, I realized one of the teachers in the community have taught you something on the blockchain, which is great, nevertheless, I would reintroduce you to the blockchain technology briefly before discussing coins and tokens. Let's get into it.
Blockchain
Blockchain technology has been in existence before the arrival of the first cryptocurrency, Bitcoin. In simple terms, blockchain is a digital ledger that stores the data of transactions or information in a decentralized way hosted by interconnected peer-peer computers in such a way that stored data becomes hard or impossible to hack. This is the technology used in cryptocurrency to ensure the safety of transactions.
Blockchain is a technology that is replacing the old method of keeping records which can easily be altered by higher authorities in charge of the record and as such hurt an organization. The data are stored in blocks on the blockchain which has been compressed to hashes for effective space management and the data can be verified by anyone with no tendency of altering the details, which improves transparency and security. Let's talk about crypto coins and tokens.
Coins
Coins are the types of cryptocurrency that are built on own blockchain. What do I mean? These are crypto assets that belonged to a specific blockchain, created on its own blockchain for the facilitation of transactions. As such, on this blockchain, it means only this asset can be transacted for different use cases, maybe to make payment, to share encrypted messages with other users in a peer-peer network of the blockchain and so on.
Coins are often regarded as native coins of its blockchain. There are many cryptocurrencies out there that can't be regarded as coins because they don't have their own blockchain, well, the cost of developing a blockchain from the scratch is exorbitant, and not every organization can handle such an amount to start a blockchain of their own. In addition, coins can be used mainly on their blockchain for transactions fee, payment, governance, security of the network, and so on, in a decentralized way.
Examples of Coins
In this section, we would create a table with some list of coins (native coins) and their own blockchain on which they are built. Let's see some.
| Coin | Own Blockchain |
|---|---|
| Bitcoin | Bitcoin Blockchain |
| Ether | Ethereum Blockchain |
| Tron | Tron Blockchain |
| Algorand | Algorand Blockchain |
| Steem | Steem Blockchain |
All the listed crypto assets above are built on their own blockchain and a notable example is STEEM, the native coin of the Steem Blockchain and you are very familiar with it even though you might call it a token before.
Tokens
Tokens are the cryptocurrency type that is not built on their blockchain rather they were built on existing blockchains, as such they are running on another blockchain for the facilitation of transactions. The reason behind this can be the fact that the issuer of this token doesn't have the cost capacity of operating a blockchain of own yet and as such resolved to deploy the project on a third-party blockchain that has been in existence.
Another thing to talk about is that tokens are extremely different as compared to Coins like Ether, Tron, Algo, and others as they can be traded or transferred using the network of another blockchain. Tokens in some instances are distributed at a lesser price to investors in the quest to raise funds for building a blockchain of their own, the investors would have a share in the coin when the blockchain is ready based on the tokens they have held.
Example of Tokens
A token built on Ethereum blockchain can't be regarded as native coin of the Ethereum blockchain but an ERC-20 token (crypto built on Ethereum) because Ether is the native coin of Ethereum and so on, let's see some of the examples of tokens and the blockchain they are built on below.
| Token | Blockchain |
|---|---|
| Shiba Inu | Ethereum Blockchain |
| BitTorrent | Tron Blockchain |
| Pancakeswap (CAKE) | Binance Smart Chain |
| Omisego | Ethereum Blockchain |
| Just | Tron Blockchain |
Aforementioned are a few types of tokens built on other blockchains and you can see how Tron and Ethereum blockchains dominated the list, that is because they are one of the popular blockchains that are compatible with smart contracts, in fact, Ethereum was the first to have this feature.
Conclusion
In conclusion, coins are native crypto coins of their own blockchain while tokens are built on an existing blockchain to operate under a standardized protocol code of the host blockchain. One of the most popular blockchains used to create tokens is the Ethereum blockchain and even it was the first to have that functionality. By now, you must have been able to differentiate between coins and tokens through this lecture. Thanks for attending and I look forward to your participation.
Important Notice
The Steemit Crypto Academy won't be divided for any reason, the volumes of grassroots crypto education are mainly for the kids who are still very new. As such, if you have been participating in the Academy, you are not eligible here. Likewise, for the kids that have stepped into the Academy, you are no longer eligible to take part in making entries for grassroots crypto education, we are glad that the knowledge you have acquired here has worked for you to step into the Academy. Thank you.
Homework Task
- Explain Coins and Tokens. Differentiate between the two.
- List some examples of Coins and Tokens, and their blockchains. Briefly talk about one of the assets listed earlier (Hint: its brief history, current price, circulating supply, and market capitalization).
Guidelines
- Write an article of at least 250 words. Keep your explanation as simple as possible.
- Include the tag #grassroot-education5, #crypto, #steemexclusive and your club status among the first 4 tags . Also, tag me @fredquantum in your homework entry.
- For Verified Steem kids alone. And the kids must be the ones that have not been participating in the Steemit Crypto Academy.
- I will check your articles and drop comments on the entries submitted now till 11:59 pm UTC, 19/02/2022.
Cc:-
@steemkidss
@steemitblog
@steemcurator01
@steemcurator02
Here is my entry below 👇👇👇
https://steemit.com/hive-139765/@jonnchima/grassroot-crypto-education-vol-5-coins-and-tokens-or-10-payout-to-steemkidss-by-jonnchima
Thank you for the lesson
https://steemit.com/hive-139765/@whakee/homework-task-or-or-grassroot-crypto-education-vol-5-coins-and-tokens-or-or-by-whakee
Powerful lesson as always. Let's see how it goes. Thank you for being down to earth in your explainations
Thank you, @ngoenyi. I'm glad to do this and I would do it over and over again. I look forward to the kids' participation.
Prof doing his job everywhere anytime..😀.
Train the kids to meet up at Upper Echelon with the cryptoacademy guys.
I really learnt so much from this content. We keep blogging.
It's my pleasure to do this and I am glad to find this piece useful for you as well. Thanks for stopping by, @prolee. Steem on!
If I knew I would have been participating in your lessons but as for this one I must try to participate in it.
Your post has been successfully curated by our team by @dilchamo. Thank you for your committed efforts, we invite you to do more and continue to post high-quality posts for a chance to win a valuable upvote from our curating team and why not be selected for an additional upvote later this week in our Top Seven.
Note: Always use the tag #fbcrypto to quickly access your post
Thanks, @dilchamo.