Tokens
Sometimes seeking for answers in the web, could be quite confusing especially if you are looking to find more information about tokens and their features. Specialist are constantly striving to provide a news feed of the current events on the crypto market and help you take the right decisions in your endeavors.
In this article we will clarify the phraseology and purpose of tokens and their derivatives. But let’s overview first the otherness between coins and tokens.
Tokens and Coins
Definition
There is a huge difference between those two examples of digital assets. By definition “digital coin„ means an asset which has its own blockchain, for example Bitcoin, Ethereum or Litecoin, they all exist in their own chains. On the other side tokens very often are also called “digital coins” which isn`t right is wrong. That’s because tokens are adopted by existing blockchain, the most popular one is Ethereum and they are known as ERC-20 (Ethereum Request for Comment). Anyone can forge tokens using smart contracts, there are several directions of usage, but we will get to that matter a bit later.
Differences
Generally, coins are used as equivalent of real money and indeed in most of the cases that is their main and only purpose. They store value, they can be transferred to another person or you can use them to shop online. You should bear in mind that with some cryptocurrencies you may find additional features like Dash for example, holding bigger amount of it delivers the right to take participation in any votes or decision in the blockchain. In other cases, depending on the algorithm, stacking them will deliver income. We will strongly recommend you read the white paper of the chosen coin to find all features of it.
Tokens and their usage are about to be fully explored and developed in the next decade, because of their wide specter of utilization, at least that’s what marketers are saying. They could serve different goals, to be easier to digest we will split them in several sections.
- Payments – They quite often are used to exchange or buy values in different platforms. For example, SYScoin offers “block market” which works the same way as Amazon, you can purchase goods in exchange of tokens. One token can present a single unit of particular item or an hour service (or more). They could be used to buy your way in into a blockchain or to add additional function to your account and enrich the experience. In networks like Etherium the main transaction functions are related with tokens or also called Gas. You need it to conduct transactions in the network, tokens are playing the role of transaction fees.
- The right giver – Tokens very frequently are bringing personal benefits and responsibilities. In some networks the ability to vote is optional only if you purchase a token. In other cases, they present rewards, or they show level of importance (Rank) or achieved contribution to the network. Tokens could be used as discount promotions or “loyalty bonus points” too.
- Crowdfunding and ICOs – Another way of use is to collect funds for start-ups (ICO) companies or for more social causes like charity. People purchasing ICO (Indicial Coin Offerings) usually are just like stakeholders, they invest with the idea to increase their funds in time.
There are many more functions that are about to be released in the nearest future because the practical usage of tokens is unlimited. Anyone anytime can create a new version of tokens providing different features or products depending on the conception standing behind it.
Also, you should know that tokens are accounted to the gray area of regulations but in some countries, there are written rules of their usage. For example, Switzerland legislation split tokens in 4 sections: Security, Payment, Utility, Equity tokens.
Reviews
Since the Ethereum network is considered to be token friendly and it has many existing of such, how about to examine some of the most popular and used ones now?
Binance Coin (BNB)
Binance is one of the largest and most common exchanges, indeed its capacity comes to around 1.5 million transactions per second. BNB coins are used as transaction fees or a way to reduce them. The offered discount is 50% and its splitting every year (25% next year,12.5% the following one etc.) until it reaches 0%. The point of that was to encourage new traders to go ahead with Binance.
OmiseGO (OMG)
This is one of the top performing projects in 2018. The company has offices in Thailand, Indonesia, Singapore, Japan and they are planning to expand soon. Their motto is “Unbank the Banked” and they offer decentralized and affordable financial services. You can simply use it to do payments, payroll deposits, b2b commerce, asset management, trading, remittances and all of that without even possessing bank account. They call themselves “The bank of the future”, their main goal is to build a network in which all users can trust, share, transfer money anywhere, anytime at minimum cost.
0X (ZRX)
ZRX is an open-source protocol which allows ERC-20 tokens to be exchanged on the Ethereum blockchain. With 0x protocol you can trade directly with existing partners for free. All of that depends on the number of “relayers” who are already using the 0x protocol to confirm transactions like Augur, Aragon, and Request Network. 0Z resembles to be a token exchange tool.
Zilliqa (ZIL)
It is an Ethereum competitor launched as an ERC-20 token which will probably divide soon from the ETC blockchain. Zilliqa is platform supporting DAPPS (decentralize apps) and it will have the capability to process thousands of transactions in a second. Thanks to the “sharding” as scalability resolution, it will be able to ensure massive transaction flow, in a manner of fact that is something that Ethereum development team is working to implement too. Zilliqa claims to be next generation of blockchains, designed to be secure and permissionless distributed network.
Aeternity (AE)
Presents a new blockchain solutions to solve the scalability and privacy ussies on which other blockchains are exposed. The solution is hidden in the “state-channels”, they keep undisputed transactions off-chain, increasing the privacy factor and keeping personal or business date off the public vision. It provides unlimited transaction throughput. Other technology called “smart-oracles” will unable co-respondence between real-world data and smart contracts efficient as possible. It will be applicable for gaming, insurances, financial apps and to supply chain management. At last we want to emphasize on is that Aeternity wants to implement hybrid mining consensus of Proof-Of-Work and Proof-Of-Stake system. The idea is to use POW for the mining process, keeping the blockchain decentralized and at the same time to use POS as governance mechanism based on market predictions.
Pundi X (NPXS)
The main goal of Pundi is to provide easy-to-use financial services without any bank involvement. Dedicated to those people which are “unbanked” and giving them the opportunity to purchase items real-time with their crypto savings. It will include also build-in exchange for cryptocurrencies and peer-to-peer transactions.
Augur (REP)
This is one amazing and very innovative project which is holding huge potential. Augur is using “the wisdom of crowd” to achieve accurate forecast about present or future events based on user’s opinion. The principle used is based on voting and probability but without interference of any 3rd party or centralized authority. Indeed, as user you have reputation and if your suggestions are correct you will have higher reputation. You can trade shares which are equal to 1$ or you can earn shares, but how? Every time you make prediction, if it is correct you receive 1$, if it's wrong you lose 0.5$. Augur is a great opportunity to share information, ask questions or find the answer in the wisdom of the crowd.
Basic Attention Token (BAT)
This is one quite ambitious project, hiding investment risk. BAT stands behind the idea to remove the middle-man platforms in the advertising business. They want to brake the existing pattern and eventually remove platforms like Facebook and Youtube out of the equation. Their main component is the Brave-browser, it is an open-source browser with high-privacy tools blocking ads and trackers. Another amazing feature is “Brave payments”, it is a software allowing you to support you favorite publishers and take precise decisions what advertising information to be displayed for you. On the other side, it will create a new market place for publishers, users and advertisers. It is a great browser, we recommend you test is on your own.
Waltonchain (WTC)
A technology based on blockchain with included RFID (radio-frequency identification) forming the so-called Internet of Things (IoT) network. The core solution is called Value Internet of Things (VioT), the ideology is to create global ecosystem with high transparency of the data sharing between all users in the network along with smart contracts. The Waltonchain technology potentially could be adopted and used by many industries worldwide
Populous (PPT)
We can find a genius idea in the face of Populous. Designed to support the small and the medium business in need of financial help. The platform resembles to a market place. If your business needs a loan, you can publicly announce it and wait for the respond of the network. The idea behind is to exclude the local authorities(banks) and have quicker and direct contact with your loaner/s. Populous provides better rates and quick funding in case of emergency.
Golem (GNT)
We don’t want to repeat ourselves but this one is genius too. Golem project creates a market similar to Airbnb, available for computing power, amazing right. Imagine that you are working as a doctor and you need strong computer to aggregate complicated calculations to reach your final conclusion, in this case you can take advantage and hire capacity thought Golem`s platform. If you are looking to rent your equipment to others, you don’t need to worry about your privacy, everything is going through virtual machines. As an idea it hides great future because of its practical usage in almost every sector that you can think of, involved with computers of course: AI development, computer graphics, medical research.
Status (SNT)
Have a look at another quite popular project available this year. It is well known to the public because of its contribution to the over-all state of the Ethereum network. Status is looking to give the opportunity to the users to make their phone or tablet devices an Ethereum nodes, by this way the integrity and strength of the network will be improved. Apart of that you can use it to communicate with people all around the world about smart contracts and transactions.
Mithril (MITH)
Mithril is a new innovative idea of the next generation social medias which could bring you regular payment and income. The developers team called the process “Social mining”. Simply explained it means that the platform algorithm accounts all your comments and posts on your wall and based on the interaction (likes, shares) with the network, you receive MITH as reward. You can use them to upgrade your account by adding cool features like dating services, premium content channels, and live-stream applications or you can exchange them for BTC or ETH. Spread your words and earn money in exchange, sounds good right?
Kucoin Shares (KCS)
Kucoin is a cryptocurrency exchange with a few more additional features to help you earn more dividends. As much as you hold, as much as you earn, that’s the actual true conception behind Kucoin. The trick is to purchase more and just stack your savings, that will grand you lower transactions fees and bigger daily bonus. You must be advised that 50% of the sum of all transactions is divided between the users according to their share in the network estimated in percentages.
Conclusion
After reviewing these great ideas of future technologies and their practical integration in our world, we definitely think some of them will see bright day and will impact our lives. This is the greatness of the tokens and smart contracts, they give the freedom to shape and consist your idea, the way you want and try to make it reality with the support of the society. We truly believe that many more projects are about to be released, keep an eye on your website and we promise to keep you posted for any fresh features and news available on the present market.