Crypto trading is very popular, as it can double investor’s initial investment in a single day. The key is to have a thorough knowledge of the market and to react quickly to its fluctuations. Another critical point is to choose a reliable Cryptocurrency trading platform. Several trusted services allow users to buy and trade cryptocurrency. Here are some of the most common platforms:

• WhiteBIT
• Kraken
• Huobi Global
• Coinbase
• etc.

These platforms offer all types of existing cryptocurrencies. They allow you to exchange cryptocurrency, and deposit and withdraw funds in fiat money (dollars, pounds, etc.). Let’s see what types of cryptocurrency exist.

Types of Crypto

Buying cryptocurrency, you should know that all digital assets can be divided into the following types: coins,  altcoins, and tokens.

Coins are assets based on blockchain and function as a native currency to pay for transactions. In other words, when you hear the word “coin”, it means that the project has its own network. Examples are Bitcoin (Bitcoin blockchain) and Ethereum (Ethereum blockchain).

The next type of our classification is altcoins. The name comes from “alternative currency,” meaning that altcoins were developed as an alternative to Bitcoin. The developers’ purpose was to improve Bitcoin’s functionality and implement updates on altcoins. Examples: Litecoin, Bitcoin Cash, etc.

Tokens. These assets are sometimes called altcoins, but their key feature is that they are always engineered on a different blockchain. Unlike coins, tokens do not have their own blockchain. Instead, tokens are developed based on an existing platform. Similarly to a foundation of a house, blockchain is the basis of the coin. Imagine that the coin is a new house with its own foundation, while the token is a construction built based on an existing house. To build a house, you don’t need to build a foundation – you can build on what already exists. In other words, tokens are assets based on an existing blockchain.

These were the main differences between the types of existing cryptocurrencies. You can buy and trade cryptocurrency on popular and trusted cryptocurrency exchanges we have mentioned at the beginning of this article.

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