Token, altcoin, cryptocurrency, what are the differences?

 

When we talk about blockchain, there are many language abuses that generate a lot of confusion. 

So to speak of the blockchain without specifying which one we are talking about is to put aside the specificities of the various existing technologies.

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Thus Ethereum offers can perform smart contracts or store data that does not offer at all Bitcoin . 

These two technologies are also public blockchains which are not IBM Hyperledger Fabric or R3 Corda which are intended to provide a means for companies to create a private or consortium network between stakeholders. 

Another abuse of language is made when talking about cryptocurrencies, tokens, coins or altcoins. So what are we talking about exactly?

Cryptocurrency

 Let's start with the term which today encompasses all the others and which ultimately is the biggest abuse of language. 

 A cryptocurrency is a currency whose security and operation are based on cryptography, so it is above all a currency. 

According to Wikipedia “money is defined by Aristotle by three functions: unit of account, store of value and intermediary of exchanges. 

According to this site a currency is characterized by the confidence that its users have in its ability to serve as a medium of exchange. “All these characteristics are those of Bitcoin, for example, which falls into the category of cryptocurrencies.

Altcoin

We also use the generic term "coin" or coin in French to name the units of account of a cryptocurrency. You will often hear about Altcoins, these are all cryptocurrencies whose underlying blockchain technology is derived from that of Bitcoin. 

An example altcoin you can buy this month is Birdchain.

You install the app, play games and get rewarded tokens.

Aldo you can pay for ads with Bird tokens on Birdchain ads platform

They are developers who have retrieved the source code of Bitcoin from the internet and created a new blockchain based on the same technical and functional fundamentals but often incorporating new features. 

 In the category of Altcoins, there are for example blockchains such as Litecoin or Namecoin.

Token

The last term that often comes up when we talk about unit of account on a blockchain is that of “token”. A token in represents a cryptocurrency but it can represent all kinds of digital assets created on top of the underlying blockchain.

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 https://app.birdchainapp.com/

These assets can be of different forms: portion of use of a service, financial asset, digital product ... These tokens are easy to create, they are made on top of an existing blockchain (Ethereum, Neo, Omni) and 

the more often as part of an ICO (Initial Coin Offering) . They are ultimately in a simplifying way called cryptocurrencies whereas the primary object of their existence is rarely that of a currency.

Conclusion

Today there are hundreds of tokens and altcoins that can be found on the coinmarketcap.com site which lists almost all of them.

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 Moreover, when you connect to this site and go to the page of one of the listed cryptocurrencies, in detail you will find the qualification that is made of it "token" or "coin".

 It should therefore be remembered that each of these terms have a specific meaning, that cryptocurrencies are the term that is used in an abusive manner to group them together, but that in the same way as 

when we talk about the blockchain in general we forget to specify the specificities which characterize it. 

Other articles

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Which altcoin to buy 

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