What you should know about Coin and Token #003

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Hello crypto friends, I believe you are all doing great today and are being as active as ever in this great community.

Today is another beautiful day and I am here as usual to discuss with you all on something very important.

In our last discussion, we learnt about coins and tokens, we learnt their types and functions and today, we shall be learning about their advantage and dis-advantages, please stay tuned.

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ADVANTAGES TO COINS

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There are so many advantages of coins which is making it popularly accepted in the world and we shall examine some now.

• DECENTRALIZATION:

One importance of coin is its decentralized nature.

Decentralization can be explained to be absence of a centralized authority.
This implies that when it comes to the operation of cryptocurrency coins, the central authority are not involved, their presence is not needed.

In the traditional banking system, transactions are often verified by manually by the authorities but with the decentralized nature of coins, transactions are verified by nodes of computer network, which makes it more secured.

• FASTER TRANSACTION RATE:

Another Importance of cryptocurrency coin is its transaction speed.

The blockchain has the ability to process over 300transactions per second and this is not possible with the traditional banking system.

The blockchain also aids cross border transactions and this are done within seconds.
Making use of traditional financial system to aid cross border transactions is often very slow.

It requires lots of intermediaries which in turn will delay the transaction rate.

• LOW TRANSACTION COST:

Another very important of cryptocurrency is it's low transaction costs.

Since the blockchain is decentralized, it doesn't require the involvement of any intermediary, it's transactions are done directly using p2p and as such, it's transaction cost is very low.

With the involvement of intermediaries in financial transactions, the transaction cost is usually increased as intermediaries will get a share through transaction costs.

• TRANSPARENCY AND PRIVACY:

The ability of a blockchain to support transparency is one of it's advantages.

Although the blockchain is transparent and can be accessed by anyone, it still helps users to maintain privacy.

For example, the blockchain doesn't reveal the names of investors in transaction, rather it shows the wallet address of each users and as such maintaining privacy of individuals.

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CONCLUSION

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We have considered the advantages of cryptocurrency coins and we have seen why they are widely accepted.

In our next post, we shall examine some of the challenges involved in making use of cryptocurrency and we shall examine it's differences with cryptocurrency tokens.

Please stay tuned