Crypto Academy / Season 3 / Week 8 – Homework Post for [professor @reminiscence01] Understanding Tokens

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Am gladdened once again for yet another opportunity of this wonderful edition by the cryptoacademy. From the lecture offered by Professor @reminiscence01, reading through this lecture series have given me a better insight on understanding tokens. To this, I will be writing based on the task given by the Professor.

What do you understand by Token and give an example of at least 5 tokens and identify the blockchain it is built on

Tokens are digital cryptocurrencies that are generated on blockchains that already was in existence. They are crypto assets that traders can invest with, trade and also store for a particular purpose on the blockchain. These assets called tokens can be made known to the public via ICO (Initial Coin Offering) events using different blockchain platforms. These digital assets created on already existing blockchain platform allows for other currencies to also be created on the same blockchain.

Examples of tokens and their different blockchain are as follows:

Thorchain - Binance Chain
FTX token - Binance Chain
Uniswap - Ethereum
Aave protocol - Ethereum
Tether - Ethereum
Klever - Tron
BitTorrent - Tron
KARMA - EOS
Everipedia - EOS

What is the difference between a token and a coin?

Tokens are made known to the public through ICO events while coins are made known through mining.

Tokens are built or created on an already existing blockchain platform while coins are created on their own blockchain platform.

Tokens can be used for several purposes on the blockchain platform and it is easy to create while coins are natively owned money of the blockchain platform and it is difficult to be created but needs an experience on its creation.

Tokens are suitable for multiple needs in the blockchain while coins are used for processing payments.

Explain the different categories of token listed below and explain its features

Utility tokens

Utility token is a blockchain-based asset which can be bought by people with the intention of using it in the future. It is a type of token that is used in funding the development of a particular new project on the blockchain platform. They are tokens which enables future access to products and services offered by an organization. It helps in financing the start-up of new projects on the blockchain platforms.

Equity tokens

Equity tokens are tokens which plays the same role as the security tokens. They are tokens that are offered by the blockchain which gives a holder the right of ownership to receiving profits from the assets or project.

Security tokens

Security tokens are tokens that blockchains provides which allows a user to be able to stake over an asset which entitles the user as a holder to the share of the profits in the asset.

Non-fungible tokens (NFT)

Non-fungible tokens are tokens that cannot be split or interchanged for other tokens. It is a type of token that represents unique items showcased on the blockchain digitally such as digital collectibles, digital arts, game items, etc.

It is a type of token that provides non-fungible assets in the blockchain in a digital format. Example of this token is the cryptokitties.

Features of a Token

Tokens are used for trading and can also be exchanged for other digital currencies.

Tokens are built on existing blockchains which makes it decentralized.

Tokens can be used for starting up new projects on the blockchain.

Since tokens represents assets, it thus helps in storing value.

Make your own research and write extensively on any token you listed in question one. (Must include features of the token, the aim of the project, Use cases)

BitTorrent

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BitTorrent is a decentralized platform that provides a p2p mechanism for the storage and sharing of digital content. This platform is based on the Tron blockchain and thus allows users to store and transfer their digital contents in a decentralized manner.

BitTorrent was created in 2001 by Bram Cohen who is an American computer programmer. The developer’s aim of creating this protocol was to help ease the frustration experienced and time taken in using applications such as FTP in downloading larger files. It is a protocol that enables users to download larger files using a low bandwidth of the internet and apart from this, it also maximizes the speed of transfer of this larger digital content.

BitTorrent Token

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BitTorrent token also known as BTT is a TRC-10 utility token. It powers different DApps such as BitTorrent file system, DLive, BitTorrent Speed, etc.
According to coinmarketcap.com, the following screenshots below shows the market statistics and chart of BitTorrent.

They following exchanges as listed below can be used in purchasing BitTorrent (BTT)
Binance, OKEK, BITTREX, Huobi, UPbit, BITFINEX, KuCoin, etc. as shown in the screenshot below

Features:

It aids a peer to peer download process.

It enables fast downloading of larger files.

It maximizes transfer speed.

It enables Peers to upload at a much slower rate than they download.

How Does BitTorrent Work?

BitTorrent works when a user enables his/her wallet by downloading the BitTorrent software which will be enabled with a wallet and BTT token balance. After a successful download of the software, BitTorrent Speed automatically bids BitTorrent (BTT) to other users so they could gain faster speeds. When the torrent file is through with the download process, you automatically earn BitTorrent (BTT) by seeding. The integrated wallet that has been created allows users to secure and store their BTT which can also sent to other wallets.

Conclusion

It was a wonderful and interesting lecture has I have learnt a lot. I never knew token is different from coin, this lecture has given me a more understanding as to the difference between tokens and coins as well as the types of tokens and their uses.

Thanks Prof. @reminiscence01 for this wonderful piece.