Things You Must Know Before Purchasing Any Token, Cryptocurrency or Coin

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March 11, 2019 by
Things You Must Know Before Purchasing Any Token, Cryptocurrency or Coin

Every blockchain project has a token, wondering why?

There are thousands of tokens, but only a few coins. The success of the first blockchain network, bitcoin, triggered a burst in the crypto world; with thousands of other blockchain networks and altcoins springing up. Like Cura Network, most of these projects were dedicated for a particular use case, and like Litecoin, for the purpose of introducing a new cryptocurrency, a new means of buying and selling.

Vitalik’s platform, Ethereum, is one of the major catalyst of the rapid expansion of the cryptocurrency ecosystem. Ethereum provides a standard template for token creation; without writing or rewriting codes. The Ethereum template also makes for interoperability of tokens.

Tokens and coins, are they one and the same?

What Is A Coin

A coin is just like any currency, like the dollar, the pounds and the naira, it is a medium of exchange, only this time it’s digital. Owned and carried as a series of unique codes in bank accounts known as wallets, they can be transferred from one person to another, and can be used to pay for services rendered or products bought. Bitcoin, Litecoin, Ripple are examples of the popular coins.

What Is A Token

Tokens are not new, they have been used in casinos years before the invention of the blockchain. In casinos, a token is an object or set of objects that is issued by the house as a measure of stake, a means of access and transaction inside the playing room. In the digital world cryptocurrency ecosystem, this similarity is not lost; It is a digital asset that is issued by the project designers and can be used as a mean of payment within the project; giving the holder the right to participate in the network and a measure of stake and ownership in the project.

How Tokens Differ From Coins

Coins and tokens are both regarded as cryptocurrencies/digital assets, but here is how they differ.
Coins are generally accepted means of transaction in the outside world, tokens cannot be used outside the platform/ecosystem from which it was issued.

Tokens give right and access to participate in the network, but this is not the case for a coin.
Coins can be used to purchase tokens, but tokens cannot be used to purchase coins.
Tokens have specific use cases, outside of which they are completely useless. For example, a movie ticket token cannot be used in the coffee shop. Coins can be used anywhere buying and selling, and exchange of payment is done.

What Roles do Tokens Play in a Blockchain Project?

Tokens are core to the design of a blockchain project. Cur is the cryptocurrency of Cura network, and will be the means of payment for health services rendered on the platform, participation in research and use of the overlaying applications that will be built on it. The Cur token is expected to be made available to the public during an ICO which is planned to kick off in April 2019.

Tokens are the stake that investors buy in ICOs. The project designers issue tokens for monetary investment in the platform. These tokens can be exchanged for cash once the platform is listed on an exchange, or be used in the platform when it is launched. It can also be sold between holders once the platform is running.

Bounties are popular in blockchain projects. Project designers invite participants to contribute in the marketing of the project, designing of the platform, bug detection and fixing once the platform is launched and reward the participants with tokens.

Every blockchain project needs a means of granting access to the features and benefits it provides. Token issuance is the way of doing this. Tokens are the life of any blockchain project. It is the means of interaction and transaction within the platform, it is the language of any blockchain platform.

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