Understand the real difference between cryptocurrencies and tokens

Who has never confused these concepts in the crypto world? I'll tell you what I discovered...

During my adventures in the crypto universe, I noticed that many people confuse tokens with coins as if they were the same thing. They are not! And I will explain why.

Tokens are more like digital "vouchers" that can represent anything: points in a game, voting rights in an organization, or even that expensive NFT that no one understands why it costs so much! Cryptocurrencies, on the other hand, are basically pure digital money.

The biggest insight that no one tells you: cryptocurrencies have their own blockchain, their own home. Bitcoin has its blockchain, Litecoin does too. And the tokens? They are tenants! They live on existing blockchains, mainly on Ethereum (, which by the way has been feeling itself too much lately with these absurd fees ).

Types of tokens you need to know

Security Tokens are basically stocks disguised as crypto. Bought hoping to get rich? Well, most ICOs were exactly that. The problem? Regulators are watching, and many projects have disappeared with investors' money.

Utility Tokens are used for you to access a specific service. It's like buying tokens at a casino - they only work there. But let's be honest, how many projects actually deliver utility? Most just make promises.

Payment Tokens are the simplest - they are only used to pay for things. Almost like coins, but they are not.

The naked and raw truth

The market is full of useless tokens. Every day a "new Bitcoin" or a "Ethereum killer" emerges, but most will disappear in less than a year. The big players continue to dominate while small investors lose money in obscure tokens.

And the centralized platforms? They control everything behind the scenes. If tomorrow they decide that your token is worth nothing, guess what? It will be worth nothing.

So, when someone comes to talk to you about a "revolutionary" new token, remember: currency has its own home, token is a tenant. And like any tenant, it can be evicted at any time.

And you? Have you ever lost money confusing these concepts?

Warning: These are my personal opinions. I am not giving financial advice. DYOR (do your own research).