Just like the money which is presently used in the form of paper or coins; cryptocurrency is also money in a digital form that is over the internet. The first cryptocurrency or crypto coins that came into being was known as Bitcoin which was launched in 2008. There are other cryptocurrencies which widely used throughout the globe.
A cryptocurrency is an encrypted, and decentralized medium of exchange that is digital. Crypto can be great for purchasing regular goods and services, including users making investments in cryptocurrencies. This is a new type of currency that everyone is getting to know of and has been quite the issue of discussion. Therefore, let’s get to know what cryptocurrencies have to offer.
Comparison of Crypto Coins and Tokens
Cryptocurrency works on a digital platform in 2 ways. Coins and tokens. The purpose of both may be the same but they have different functions.
Crypto Coins operate on a blockchain of their own and were created in the form of money. For instance, Ether (ETH) is a cryptocurrency that is based on the Ethereum blockchain. There are several crypto coins out of which the most known are bitcoin, ether, dogecoin, monero, etc. If a blockchain-based cryptocurrency is not Bitcoin then it is referred to as “Altcoin” (alternative to Bitcoin). Altcoins such as Namecoin, Litecoin, Peercoin, Ethereum, and USD Coins are popular among cryptocurrency users.
Generally, all cryptocurrencies are private which means there is no single body that governs them however, they have been classified as being “private” and “public” depending on the privacy they provide. A transaction carried out using private cryptocurrency will have hidden information in which the details of the transaction will be masked. Unlike public cryptocurrencies, where the transaction will be transparent and can be traced.
Just like crypto coins Tokens are also built on an existing blockchain, however, rather than a currency, they function as digital assets for carrying out certain contracts. They are used to represent physical assets, utilities, services, art, real estate, etc. Tokenization is the process of creating tokens and assigning value to them.
For example, the BAT, or Basic Attention Token, is built on the Ethereum platform and is used in digital advertising and Celsius Network has a token and has a private equity deal.
- Crypto Coins Vs Crypto Tokens
Crypto coins and crypto token are often confused as one but there is indeed a small but impactful difference. When purchasing goods pr products, coins are mostly the preferred cryptocurrency of transactions and while services are purchased then tokens are commonly preferred. Crypto represents digital money or currency whereas tokens represent assets.
Coinbase & Ripple
Coinbase is a top cryptocurrency trading exchange, established in April 2021 originally to send and receive Bitcoin. It provides a platform for purchasing major cryptocurrencies like Bitcoin, Ethereum, and Cardano along with more than 50 altcoins that users can trade on this platform. Coinbase can be used in android and iOS devices and is available on the web. Coinbase is easy to use for cryptocurrency beginners and anyone with basic computer skills. It also supports a large group of cryptocurrencies. However, the transactions fees are high and many altcoins are not on their list.
Ripple is a technology that can be used as a cryptocurrency and to carry out financial transactions via digital mode. It was founded in 2012. Ripple is the name of the company and the cryptocurrency they use is known as XRP which is a cryptocurrency token. It also uses a blockchain-based digital payment network for transactions with its XRP cryptocurrency. Ripple consumes low energy, is quick, and costs less as compared to other cryptocurrencies. Ripple (XRP) shows a high ranking among the most valuable blockchain-based tokens in terms of market capitalization. XRP functions as an intermediate mechanism of exchange between 2 currencies or networks.
Private Equity and Public Equity
Equity refers to the value of an asset after deducting the value of any liabilities on that asset. In finance, the ownership of assets that may have liabilities or debts to them is known as equity. Therefore, Equity = Assets – Liabilities. Equity has been classified into 2 types; private equity and public equity. In private equity, the shares are owned by a private company, and in public equity, the shares are owned by a public company.
- Private Equity
Private ownership of shares or stocks in a private company is called private equity. The information of such ownership is not mandated to be published. Since it is privately owned there is less regulation by other organizations and public shareholders. Trade is carried among themselves or with the public under certain criteria. Private equity is long-term oriented for investors who have a high net worth. Ripple has a coin and private equity.
- Public Equity
In the case of public equity, the shares or stocks are under the ownership of a public company. Information regarding public equity is made available to the public. Public equity is regulated mostly by government organizations and results in short-term investments among the public population.