In the past few years, crypto ecosystem has grown so rapidly that it became quite perplexing to understand all its dimensions and types of its currencies. When it comes to the latest blockchain models; utility tokens, security tokens, and stable coins are hitting the ground. This article is going to provide a clear elaboration of what these currencies are, how they work, and among these, why the utility token – C2F is the best one.
Let’s dive in!
- Coins vs Tokens: A Mechanical Difference
Tokens and coins are the two terms that are sometimes interchangeably used in various articles, videos, and blogs. But there exists a technical distinction between them. Coins are money. Just like metal coins or paper money, there exists electronic money which is used for commercial transactions. This type of electronic money is known as fiat currency. Fiat currency is any currency launched by the government and controlled by the central bank, its value and supply.
For instance, in 2008, Satoshi Nakamoto created Bitcoin which was the very first digital currency. The purpose of this digital coin is simply a way of payment. It holds all properties similar to any paper money; it is a medium of transfer, has existential value, an account unit. However, coins are cryptocurrencies that are forte to their native/specific blockchain. They have a self-sufficient independent blockchain.
Token, on the other hand, is a remote asset that belongs to multiple blockchains. As they do not have their own independent blockchain, so they get to benefit from its technology and can be used on multiple chains.
- Security Token:
Security token represents an investment of actual money in some enterprise. A tradable financial asset in digital form is a “security token”. It gets its value from external tradable assets like stocks or real estate. This token provides the same rights as acquired by any traditional buyer like voting and profit share rights. The only distinction is that the security token is in digital form.
These are different from utility tokens in the perspective that they are specifically designed for investment products, not general purchases. The process of issuing a security token is called STO (Security Token Offering), and it must be registered with a specific market authority. Additional security regulations make this token less susceptible to fraud and embezzlement. Examples of security token are L’Osteria, SolarStake, etc.
Stablecoins are a type of digital crypto-currency that provides more stability in comparison to other types because these are backed by solid assets e.g. gold, silver, or U.S. dollars. Other types of crypto-currencies are not much stable because they are not pegged to stable forte like gold and their worth is attained from software-handled cryptograph and interlinked blockchain technology. Multiple sources like fiat currency (dollars), other crypto-currencies, precious metals like gold & silver, and techno-algorithmic functions support stablecoins. The three main types of it are:
- Fiat-backed stablecoin: This type is backed by fiat currency. Tether (USDT) and Gemini Dollar (GUSD) are its examples.
- Crypto-backed stablecoin: This type is backed by a crypto source, it is less stable. DAI is its example.
- Algorithmic-based stablecoin: In this type, a smart contract is established to sell or buy stablecoins with the aim of keeping the price constant.
- Utility Token:
The new star in the crypto-currency environment is the utility token. This token has a huge functionality status in comparison to coin. These have value but cannot directly replace the money. However, this token adds value to investors in different productive ways. They open access to upcoming products or services. For instance, when a company develops a digital item or service, they start an ICO (Initial Coin Offering). Thus, when the company sells utility tokens, investors can buy them and use them for paying on the platform maintained by the company launching the product.
Take Uber as an example, you can buy an Uber token and use this token to pay for the Uber ride, but if you want to pay for anything else then you have to exchange it against another crypto-coin like bitcoin or fiat money first.
Now, let’s talk about the C2F token, a uniquely designed utility token native to the platform Coinovy. This C2F token provides exciting discounts, opportunities, and options to its investors. Moreover, this also acts as a payment method and fee settlement option side by side to other well-known crypto-currencies.
The exciting features which you can get of C2F token on Coinovy are:
- Purchase of products and services on a platform
- Subscription to various programs for trade advice
- Exchange listing
- Fee and settlement discounts
- Yield boost
The platform, Coinovy, isn’t any local site, instead, it is a digital finance application that provides huge stock of digital assets along with an inexhaustible number of wallets to get, send, earn, buy, borrow, and exchange. Coinovy is built upon 4 polls of robustness; technology, boundless wallet, tradability, and crypto to fiat feature. In order to provide the users with the best experience a Debit Card option, powered by Visa, is also available. This provides dexterity for transactions and fluidness along with the provision of security through BitGo partner. This platform is also a great site for small companies where the function of Token to Crypto is assisted with great proficiency.
Give Coinovy a visit and explore a new Crypto to Fiat horizon where you can be assured of simplified steps, fast transaction speed and security.