Getting to know cryptocurrencies
Cryptocurrency is a digital currency asset that is secured using cryptographic methods on an open database called a blockchain. There are 2 types of crypto, namely coins and tokens. Coin is a cryptocurrency that stands on its own blockchain with examples of bitcoin and ethereum, while tokens are cryptocurrencies that "ride" on the blockchain of other native assets.
Since blockchain technology has become the solution to the double-spending problem, many new digital assets have sprung up on the blockchain. Examples are Bitcoin, Ethereum, and others.
Each of these assets can be traded & transacted globally and 24/7. The exchange rate of each of these assets is determined by the supply & demand of trading market participants.
cryptocurrency types
There are many cryptos circulating in the market, such as Bitcoin, Ethereum, Binance Coin, Tether, and so on. But broadly speaking, there are two types of crypto, namely native coins and tokens.
Native coins
Native coins can be mined like metal commodities
Native coins are digital assets / coins that were created at the same time as the creation of the blockchain itself. For example, Bitcoin (BTC) is the native coin circulating on the Bitcoin blockchain, and Ether (ETH) is the native coin on top of the Ethereum blockchain.
In general, to increase the number of native coins in circulation, these native coins need to be "mined" like a metal commodity. In the crypto world, mining is the activity of validating, processing and securing transactions in a decentralized manner. “Miners” who successfully carry out the process will receive a reward in the form of native coins from the blockchain system. Bitcoin blockchain miners will earn BTC, and Ethereum blockchain miners will earn ETH.
The value of a coin in the market is determined entirely by supply and demand. If more people use it (for example, for investment or for exchange of value) than are available in the market, then its value will
Conversely, if the sale of the coin is more than the buyer, then its value will decrease.
All transactions on the blockchain require native coins as fees paid to miners. For example, if you want to send BTC over the bitcoin blockchain, you have to pay a fee in BTC to the miner. If you transact on the Ethereum blockchain, you have to pay ETH to the miner.
token is a crypto that is issued “hitting” as a project on another blockchain platform (e.g. Ethereum). Tokens are issued for a specific purpose and the amount can be set by the token developer.
Tokens
A tokens can be a digital form of securities, share representations (security tokens), or used to provide access to a function (utility token) such as cellular pulses used for telephone calls.
One form of token application is the issuance of stablecoins. Stablecoins are issued as a form of digital representation of the original asset that is the backing. The original assets are kept by the developer.