Basics of Trading and Finance (Part 12) : What is COIN
Intro
IntroAs a moderator of the Tron Fan Club community, I regularly write various tutorials on crypto blockchain and Tron related matters. The main purpose of these tutorials is to make our new users aware of these topics. In continuation of that I am writing tutorials on trading and finance. Hope you can easily learn some details of trading and finance through this tutorial series.
A coin is a digital asset that operates independently of a larger network. Token is different from coin in some points. Tokens are created and managed on a blockchain network but coins have their own blockchain and operate independently of other cryptos. In this tutorial series, I would like to share token, coin, crypto and money. It is second part in this five series and let’s talk about coin today in details.
Coins are often used as a means of payment or transaction on their respective networks. For example, Bitcoin is the most well-known cryptocurrency and operates on its own blockchain network. It can be used to make transactions and payments. They can arrange money and transections just like traditional currency. Main features of coins is their decentralization. Normal traditional currency is managed by a central bank or government. Coins are managed by a decentralized network of computers. In this point of view, Coin is highly secured and resistant to censorship and tampering. Where there is a central authority there is a control and chance of fabricating the financial system & currency.
Coins are created through a process called mining. This is the base of coin creation. Mining involves using computational power (in PoW mechanism) to solve complex mathematical equations in order to validate transactions on the blockchain network. This process requires a lot of computational power. But there are some alternative mechanisms available as well. The reward for successfully mining a block of transactions is usually in the form of new coins. New coins are generated in this way and distributed to the miners. Those who are contributing in running and server maintenance of the blockchain are mostly getting that distributed coins in most of the cases. In traditional system, the currency is printed. This mining system is something like that but in a controlled and secured way. Total currency circulation is controlled here.
There are many different types of coins. Most of them has their own unique features and use cases. Bitcoin is designed primarily as a means of payment. Ethereum is designed to support smart contracts and decentralized applications. They are being used as a means of payment and transaction but still coins can also be used as a store of value. This is particularly true of coins like Bitcoin which have a limited supply and a history of appreciating in value over time. Coins are a powerful tool for facilitating transactions and storing value in a decentralized and secure manner. Some companies have even started accepting crypto as payment for goods and services.
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Even if you have some idea about coins, check out your post today for more details. This will be very useful for me. Thanks for sharing important information with us.
This is a very interesting posts that explains to us what coin is, thanks for sharing 😊