Forms of Cryptocurrencies.

Digital currency is divided into coins and tokens. Some people mistakenly equate these two concepts, which is misleading. Let's understand how coins differ from tokens (this is important).

A coin is the monetary unit of a cryptocurrency project that operates on its own blockchain. Coins are mined through mining. They can be easily transferred to other users of the system, used to pay for goods and services, and sold for fiat currencies.

All coins except Bitcoin are called altcoins.

A token is the monetary unit of a cryptocurrency project that operates on an existing blockchain. Tokens cannot be mined; they can only be bought or obtained as a reward for certain activities.

Tokens cannot be used as payment for goods or services; their main function is to provide access to the features of the cryptocurrency platform. Tokens are also used as investment instruments and can be used for voting or surveys.

Tokens can be exchanged for fiat currency or other cryptocurrencies, but they need to be withdrawn to an exchange for that. Unlike coins that operate on the Bitcoin blockchain, most tokens operate on the Ethereum blockchain.