Cryptocurrencies, Altcoins, Tokens and Forks

Cryptocurrencies

The crypto world has come a long way since the introduction of Bitcoin – with 1,000 active cryptocurrencies on the market and more being constantly added. However some of the big players include not only Bitcoin but also XRP, Ethereum, Bitcoin Cash, EOS, Litecoin, Ripple, Tether and Stellar. Even though each currency is different in its function, development and purpose, what unites them is the underlying meaning of a cryptocurrency. Simply, this entails a digital currency that is created and secured by cryptography, the art of writing or solving digital codes.  Though cryptocurrencies existed even before the development of Bitcoin, it is important to note that Bitcoin was the first to be completely decentralised and therefore completely changed the crypto space.

 

Altcoins

As the name suggests, Altcoins refers to coins that are an alternative to Bitcoin. Some Altcoins are a close variant Bitcoin, sharing the open sourced nature of Bitcoin, whilst others create their protocol on which to operate. However, all Altcoins have a unique blockchain upon which their transactions occur.

 

Forks

If you’ve delved into the Altcoin space, you would have come across the idea of Forks. Forks represent a split in the blockchain and allow for the Altcoins to occur. Specifically, forks can be divided into: Hard Forks.  An upgrade in the protocol that cannot work with older versions, including Bitcoin Cash. Soft Forks. An upgrade in the protocol that can still work with older versions, including the Bitcoin Improvement Proposal (BIP).

 

Tokens

Finally, we have tokens. These are a fairly general term which are impacted by the context in which they are used. As such, a token can mean: A digital asset. Including a Bitcoin or Altcoin token. A unit of value. Including how many Bitcoins a person has, described as X Bitcoin tokens. A string of data. The transfer, storage and creation of cryptocurrencies is done through a string of data known as tokens. A utility token. Allows a user to access a certain product or service.