While everyone is in this space for various reasons, making money is either at the top of everyone’s list, or probably right below the #1 spot on their list if they have another agenda as a priority, like breaking the grasp the current financial institutions have on the world.
Whatever your reasons may be, I feel that if you’re in this space and taking it seriously, you should be putting in some effort to understand the technology(s) that make it all happen.
As traders, we definitely do NOT have to read whitepapers for projects we’re merely day/swing trading, but when choosing a long term investment, you should be trying to understand as much of it as possible as well.
It’s too easy to see a post on Reddit, even with hundreds or thousands of upvotes shilling some coin/token causing you FOMO to just go out and buy it. Avoid doing this! You must do your due diligence when buying something for the mid-long term, don’t believe what you see online. There are bots, paid accounts and people with $ and agendas. Always do your own research (DYOR).
That being said, I was having a conversation a few days ago with a couple guys in the FB group. We were talking about the difference between a coin and a token. Without going to Google or Youtube, do you know the answer to this?
One person said they’re the same thing essentially, just an interchangeable term for a cryptocurrency.
I’ll save you the Google search, unless you want to get even deeper into it. A coin is a protocol that is built on it’s own native blockchain, independent of all others.
Bitcoin, Litecoin, Ethereum, NEO, Monero, etc. These are all coins.
These are the first level of digital assets built on that specific blockchain. A token is a new digital asset built on an existing blockchain through the use of smart contracts.
If you look on Coinmarketcap to the left under a coins name on their page, you will see if they are listed as a coin or token
That’s why all tokens are linked to a platform coin that has implemented smart contracts, Ethereum being the first and most used, but others including NEO, ARK, WAVES, STRATIS, UBQ, ADA, LISK, Etc.
QTUM for example, was an ERC20 token built on the Ethereum blockchain, and was listed as a token on Coinmarketcap. A few months ago QTUM successfully launched their main-net and switched to their own blockchain, leaving Ethereum. They are now a coin, and also listed as such on CMC.
OMG is currently still an ERC20 token while they finalize the details of the switch to their own blockchain, at which point they will become a coin of their own.
I’m not recommending everyone should learn how to read code and check Github updates and commits, but definitely spend some of your time researching this world you’re investing in!