Bitcoin, the world's oldest and largest cryptocurrency, did not have much of competiiton when it was launched back in 2009. Fast forward to 2021, it faces competition from a number of different types of cryptos.
Different types of cryptos fall in two broad categories: One, Bitcoin and altcoins. Two, tokens that live within a given blockchain of a different platform. While the terms crypto, coins, and tokens are used interchangeably, they have some common differences.
Both tokens and coins are cryptos and they have separate functions and are built on different blockchains. For example, Ether is built on Ethereum blockchain. But Basic Attention Token is also built on Ethereum platform. Now, while coins can act as a form of currency, tokens cannot, despite being built on a blockchain. Tokens are prograamble assets that allow execution of smart contracts.
Smart contracts are programs stored on blockchain that run when a particular set of conditions are met. Just like any other computer program. Except, in this case, these contracts establish the ownership of assets outside of the blockchain. Plus, tokens aren't necessarily a currency, rather they act as a non-fungible items of value like points, coins, or artwork.
(Edited by : Yashi Gupta)
