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A Crypto Primer: Currencies, Commodities, Tokens
Cryptocurrencies, crypto tokens, and crypto commodities are all crypto jargon you’ll often hear when people talk about crypto. However, these technical terms are often confused and mixed. Not only does this change the context of the conversation, but it also makes it harder for new crypto users to understand what is being talked about.
In this post, we’ll cover these crypto terms and what makes them different from each other. Let’s take a look.
Cryptocurrency is the most popular among these three terms. Cryptocurrency refers to the crypto coins which people buy and sell. As the term suggests, these coins are the currency of the crypto world, just like fiat currency is used in the real world. These coins or cryptocurrencies have a certain value and can be used to buy everyday items.
This is gaining popularity, and more places have started to accept cryptocurrencies instead of conventional currency. Famous examples of cryptocurrencies include Bitcoin and Ethereum. Cryptocurrencies are also known as Altcoins or coins.
As a generic word, "crypto-commodity" refers to an asset that can be traded, fungible, and/or represent a real or virtual commodity, utility, or contract. However, there is some debate as to what this word means. Some people say that since crypto tokens are built on blockchains, it's a crypto commodity. Others argue that a computer’s CPU is a crypto commodity as it generates the power to create cryptocurrencies.
That’s why some people also argue that Ethereum’s blockchain is also a crypto commodity since its technology acts as a building block to produce smart contracts.
This term is the most confused with cryptocurrencies. All cryptocurrencies aren’t tokens, but all tokens are crypto. When we say "crypto token," we're talking about a particular type of virtual token or the way cryptocurrencies are valued. Each of these tokens represents an asset or utility that is transferable and fungible in its own blockchain.
While crypto tokens are frequently used to raise money for crowd sales, they can also be used in other ways.
Do You Want To Learn More About Crypto Jargon?
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