Finance

What Is The Difference Between Wallet Tokens And Cryptocurrencies?

Cryptocurrencies are virtualized currencies that are encrypted using the principles of cryptography. Since this is just a record of the transaction done and not any unit of amount, it is many times called a misnomer. The difference between wallet tokens and cryptocurrencies can be understood better by going through their basic features in a concise manner.

Wallet tokens

Wallet tokens are derived from a pre-manufactured template of blockchain; there is no need to start from scratch. The user makes use of smart contracts or programmable computer codes that are self-run to create wall tokens, that too without any interference from any third party. Wallet tokens are tradeable and can be used to win bonus points, or sometimes cryptocurrency coins too. Thus, tangible form of cryptocurrency can be understood as wall tokens.

Distribution of tokens in public is done through initial coin offering (ICO) which is just like IPO raised for the mutual funds. The launch of a new cryptocurrency or a project is announced in ICO for raising funds through process which is actually crowd funding. Thus, wallet tokens can be exchanged and traded and crypotcurrency can be one of the tradeoffs of wall token transaction.

Cryptocurrencies

Cryptocurrencies, unlike wallet tokens, are simply an encrypted version of currency whose value is decided by the platform which develops it. The very first cryptocurrency to become popular is Bitcoin and many alternatives have been rolled out after it. Tokens are form of cryptocurrencies.

Cryptocurrency of any type has its unique protocol and blockchain. It supports the native currency that it represents. Thus, while cryptocurrency has its unique blockchain, the wallet tokens are created from an existing blockchain.

The convenience and security that come with these purely digital modes of transaction are what the future users look up to. These are guarantee to the safer and faster way of transaction and are likely to win lots of users in near future.