For new people in the crypto space, it can be pretty overwhelming to understand all the nuances. Cryptocurrency coins are different from tokens, let’s talk about those differences and why they matter.
This is my 512th episode/article. I put a great deal of work into this content so if you find it valuable, please do like, share, comment and subscribe! Note that I had COVID when recording this so please forgive the potentially lower quality
Some examples are Tron with TRC20, Ethereum with ERC20, and Binance with BEP20 tokens. There are many chains that have their own tokens as well such as Hive, Solana, Polkadot, Avalanche, and more.
The main thing to consider is that when you are using the ecosystems of these blockchains and want to trade between tokens, you can only do that within each ecosystem. So, you can only trade ERC20 tokens for other ERC20 tokens or Ethereum on a “decentralized” exchange like Uniswap. Thorswap offers you the ability to trade across chains like from Bitcoin to Ethereum, but that was covered here: https://peakd.com/hive-167922/@scottcbusiness/ybrwvnta
To some degree, it could make more sense to just invest in the underlying asset. For example, if you invest in Ethereum, you would have seen a massive jump in value when Shiba Inu blew up in hype (which is now worth only 28% of its all-time high). Also, remember that you are generally stuck within that ecosystem and subject to its features and drawbacks. For example, using any ERC20 tokens costs Ethereum gas fees which have been very high for some time.
Also, note that projects can distribute tokens across multiple chains. For example, you can get USDT on many chains: https://tether.to/en/transparency/. You can see on that site that they have issued huge amounts of USDT across Ethereum, Tron, Algorand, EOS, Solana, Avalanche, and more.
I don’t at all support Tether, by the way, it’s extremely centralized.
What are your thoughts on cryptocurrency coins vs tokens? Did this explanation help? Where do you like to trade? Let me know what you think about this in the comments below and don’t forget to subscribe!
Disclaimer: This is not financial advice and is purely for entertainment purposes. What you see, hear, or read is my personal opinion, and any statements made are based on my views and should not be misconstrued as fact. My crypto portfolio may or may not be simulated
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▶️ 3Speak
👍🏻 Very good overview and examples. Knew the difference in general but it was great to learn some new details and understand better the investment aspects to consider. Nice work!
🙋🏼♂️ Regards Thomas
Nice! Happy I could give you a refresher.
Wow, the overview was fantastic and great
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