What you should know about Coin and Token #002

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Hello crypto friends,

With a humble heart, I happily come before you all today to continue our discussion on tokens and coins.

In our last meeting, we learnt a lot about coins, why it is called a coin and it's different types.

Today we shall continue our discussion by shifting to the explanation of tokens, stay tuned as we are going to learn a lot.

WHAT IS TOKEN

Tokens can be explained to be units of value that are managed on a blockchain network.

Unlike coins which are built and managed on their own network, tokens are built and managed on another blockchain that is not it's own, they are built on existing tokens

TYPES OF TOKENS

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There are different types of tokens used in the cryptospace today and we shall be learning in some of them together.

• UTILITY TOKEN:

A utility token can be explained to be a token that was designed by a platform/project to be used as a form of utility within it's ecosystem to gain access to certain services.

Unlike the security token, utility token doesn't represent ownership in a company, rather it helps to serve for a unique purpose in the project and are not created as an investment token.

• SECURITY TOKEN:

A security token can be explained to be a digital asset designed to serve as a representation of ownership and it is usually issued on a distributed ledger technology (blockchain)

Security token are created to be in alliance with existing security regulations, thus making them a regulated form of digital asset.

• GOVERNANCE TOKEN:

A governance token can be explained to be a digital token that was created to give users the right to be a part of the decision making process of a blockchain based protocol.

It can also be explained to be a tool that gives token holders the privilege to contribute to the direction and governance of the network

Governance tokens plays a big role in allowing decentralized decision making in the world of decentralized finance.

They serve as empowerment to the community, enabling them to make various decision concerning the growth and development of the community.

• NON-FUNGIBLE TOKEN:

A Non-fungible token can be explained to be a type of token that was created to show ownership of a unique item stored on the blockchain.

Unlike other cryptocurrencies, that are fungible and can be exchanged to other cryptocurrencies of same value, nft are non-fungible and cannot be exchanged for another nft token.

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CONCLUSION

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Today, we have examined some tips on tokens and their types.
We have seen the various types of tokens and what they work for and in our next meeting, we shall examine the features of token/coin, the advantage, dis-advantages, similarities and differences.