Cryptocurrencies are digital (or virtual) currencies, which use cryptography * for the security of transactions. With mathematics providing the most important ballast, ensuring the efficiency of networks, mining processes occur with the internet as the most important infrastructure with a global reach. The borders are the same as those on the Internet, that is, they can be used from international financial remittances to local transactions.
Most of them have decentralized characteristics, since all the technology belongs to network users and, therefore, they do not have governmental ties. Some may have centralized characteristics because they belong to companies or even banks. However, most of them use blockchain (chain of blocks), which works like an accounting book recording all transactions made with each digital currency.
of cryptocurrencies:
Bitcoin
Litecoin
Dash
* Cryptography: it is the act of encapsulating a message with codes and then decapsulating with the appropriate methods, so that this message, for example, is only read by someone with the access allowed to read it. Cryptography dates back to the dawn of time, when a message should arrive at the correct location without changes, it follows the History of Cryptography with Wikipedia source.
Tokens are also traded by networks, but the difference for cryptocurrencies is the fact that they can build a contract with them, certify documents or even have a product linked to it. For example, an Ethereum token can be used to build a smart contract.
The Petro token from Venezuela can be backed by oil, the True USD backed by the dollar, among others. So, for tokens there are several uses besides being currency. They also use cryptography to secure their networks and are responsible for large ICOs for projects, which represents a new era of corporate finance with the use of blockchain and prospects for a new economy. There are tokens that benefit users who hold them. In the Ethereum network there are already successful tokens, examples are Tron and Crypterium that became famous in late 2017 and are ETH tokens.
Token Examples
Ethereum
EOS Trueusd
There is a noticeable difference between a token and a cryptocurrency, even with common encryption. It is important to note that there are several different cryptographies available for cryptocurrencies and for tokens.
Therefore, to find out how the currency or even the token system works, it is important to understand what each cryptography does in specific, to understand the functionality of both, which most of the time have characteristics linked to their security technologies.
For example: the Bitcoin network has been in operation for more than ten years and has never been attacked, which shows that the mathematics ballast is really strong and secure in the cryptography employed in its security.
It can even be said that the project is very solid and that the potential of the blockchain has not yet been fully known and used, although its applicability has already been made in several sectors, in addition to digital assets. Want to know more curiosities and clarify doubts about cryptoeconomics? Stay tuned for the blog articles here on the platform!
