Crypto Coin vs Token

Resolve the forever existing confusion between the crypto coins and tokens. This is to note that coins and tokens are two groups in which a cryptocurrency is divided. These coins and tokens are completely different than each other in terms of usage, cost, and requirements. A coin runs on its blockchain only. It does not run on the already existing blockchains. Since it requires its blockchain to be created, it involves high costs. Some of the most widely used crypto coins are Bitcoin, Ethereum, Dogecoin, etc. These assets allow people to invest in and exchange money. A token can be run on an existing blockchain. It means it does not require a new blockchain to be created for its usage. These tokens are used in the form of smart contracts which allow only physical objects and physical or digital services. The most widely used way in which tokens are issued is for a security token offering. This is the way most start-ups raise funds these days.

Know What Goes Behind the Creation of a Cryptocurrency

Cryptocurrency is taking up the world to a greater level. Every day, with the increasing engagement of people in evolving cryptocurrencies, we come across a new cryptocurrency token being bought tremendously. The growing reach of cryptocurrency is encouraging many celebrities or the owners of famous products, to start their cryptocurrency. Although, many still believe that the crypto world is a fake world built to rob common people. Well, in this article, we will discuss the process that goes behind the creation of a new cryptocurrency. Understanding the birth of crypto will help you believe in crypto and its working. We will use Bitcoin as an example to explain the process of cryptocurrency creation.

Creation/Mining of Cryptocurrency

In the cryptocurrency language, the process of the creation of cryptocurrency is called mining. This process involves an enormous amount of computer hardware and strong software. Using these hardware and software, the miners who also act as the node of the blockchain, create new units of cryptocurrency and verify the transactions within the mining process. The miners try to decrypt or decode the block using these high-power hardware and software, every time a transaction takes place. During decrypting, the miners intend to find out the details of the transaction such as who sent how many Bitcoins to whom, at what date and time, and many other basic details that are required to record the transaction in the blockchain. Once decrypting is completed by a miner/node, other nodes verify it and accept the information to be true. This is how the block of the transaction gets added to the blockchain. Now, it is often seen that the verification cost is very high because the process is resource-intensive. So, the miners find it very expensive to verify the decrypted transaction. Therefore, they join pools to split the expenses and reduce the overall cost. Since they split the cost, they are bound to split the reward too. These miners are paid in the cryptocurrency which they decrypt. That’s the reason they participate in the competition where whoever decrypts first gets the reward. The highly growing crypto values are referred to as the most valued reward by these miners.

Conclusion 

The myth that cryptocurrencies are fake is made clear in this article. Trading in cryptocurrency is rather a highly appreciated method of making great profits on a daily basis. If you still believe that cryptocurrency is fake then you are missing out on one of the most valuable platforms for making handsome money.

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