What are Stablecoins, Altcoins & Wrapped Coins?
In this section, we’re going to talk about what are stablecoins, altcoins, and wrapped coins, and the differences between all of them!
The cryptocurrency world is full of industry-specific jargon. There’s a huge number of different terms for you to figure out and understand, when you’re just starting out with your crypto journey!
Many of these terms can get really confusing, and clamp up into one, huge mess. This is especially true when you consider all of the different cryptocurrency-related expressions and names! Well, today, I’m going to clear up some of that confusion for you.
In this section, we are going to talk about altcoins, stablecoins, and wrapped coins. First, I’ll tell you what each of these are, and give you some examples. Then, we’ll also discuss where are these crypto assets mainly used.
So, let’s get to it!
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What are Stablecoins, Altcoins & Wrapped Coins Explained!
What are Altcoins, Stablecoins, and Wrapped Coins?
To start things off, in order to understand these concepts better, we need to break down each of the terms, individually.
The altcoin definition is, honestly, the simplest of the three, as far as understanding it goes. However, it’s also a term that has a lot of history, and has changed a bit, over the years.
From the very origin of the term, “crypto altcoins” referred to all other cryptocurrencies that aren’t Bitcoin. So, whether it be Ethereum, Cardano, or Shiba Inu, all of these would be called “altcoins”, since they are NOT Bitcoin. Simple!
With time, however, the cryptocurrency market EXPLODED - there are new coins and tokens coming into the market seemingly every single day! This is why, at some point in time, people started using the terms “altcoins”, “best altcoins”, and looking at “where can I buy altcoins?”, in reference to all of the different cryptocurrencies that are not the top-10 assets - Bitcoin, Ethereum, Ripple, and so on. So, in other words, if a coin or token isn’t in the top-10 list, it’s considered an “altcoin”.
Not sure what’s the difference between crypto coins and tokens? Well, I have a dedicated section on this topic - make sure to check it out, and learn all of the essential differences!
Going back to what are altcoins, you can look at it like this: imagine that a candy shop stocks a single chocolate bar brand. It’s the most popular brand, and has been around forever. With time, there are new brands of chocolate coming into the shop, and gaining popularity - some become super-popular, while others come and go. So, at some point, everyone will know all of the main, most popular brands - the first one, and then a few others, that have managed to gain popularity over the years -, while the rest of the chocolate bars will be viewed as “alternatives”.
If you want to keep it simple, though, you may also view altcoins as “alternatives to Bitcoin”. So, whenever your friends say that they’re thinking about “investing in altcoins”, you will now know what they mean!
Moving on, what are stablecoins? Well, they’re a really interesting concept. While they have been subject to a lot of controversy, as of late, it’s worth stating that the premise behind stablecoins is quite complicated, and can be tricky to truly comprehend!
So, how do stablecoins work? Well, a stablecoin is a cryptocurrency asset that is pegged to a fiat (or, governmental) currency - in most cases, this will be the Unites States dollar. Here, “pegged” means that the value of a single stablecoin is “tied” to the dollar - one stablecoin will (theoretically) always be worth one dollar (or one unit of the currency that it’s pegged to).
Following that, the term “backed” will always come up when talking about stablecoins, too. Put simply, this means that, for every stablecoin issued, there’s going to be some sort of an established asset to back it up (most often, this would be the actual US dollar).
So, think about it like this - imagine that you’ve decided to sell concert tickets. A person can come up to you, and purchase a ticket for $1. Now, for the sake of this example, let’s just say that, due to some unforeseen event, half of the ticket buyers decided not to go to the concert, and are asking for a refund.
If you have all of the money that they’ve paid you for the ticket, and have used it to “back” the ticket purchases, you are able to issue refunds, no problem - if not, then suddenly, there’s no money for the customers to get back, and you start running into all sorts of problems!
In a very particular sense, the same sentiment is true with stablecoins. That is why all stablecoins need to be backed by governmental money, or some sort of a valuable, established asset. It’s also why there’s so much controversy in the world of crypto, regarding unbacked assets, and why people are questioning are stablecoins safe, to begin with.
It’s worth mentioning here that stablecoins are also segmented into a few different categories, as well - the most well-known of which these days is “algo-”, or algorithmic stablecoins. It’s a complex topic that deserves a section of its own, but essentially, to put it short and simple, algo-stablecoins make use of special algorithms in order to keep their price stable. As you might have heard with the widespread news of the Terra Luna events, this type of stablecoins is yet to be widely successful.
So, altcoins are all cryptocurrencies that are not Bitcoin, while stablecoins are special crypto assets that have their price pegged to a traditional currency, often the US dollar. What are wrapped coins, though?
To tell you the truth, wrapped coins are probably the most difficult to understand, if you’re just starting out with crypto! I’ll break things down as simple as possible, but do make sure to check out other sections in this Crypto 101 Handbook, so that you could get a better understanding of the topic, as a whole!
Now, imagine that you want to send a couple of packages to two of your friends - one who lives in another city, and another who lives in a different country. You want to send two of them the same thing - say, custom-made cups that you’ve handcrafted yourself!
When it comes to your friend from another city, the process of packing the cup is pretty simple - you place it in a box, stuff it with cushioning, wrap everything up, stick on a shipment sticker, and send it from the post office. Simple!
However, when it comes to your friend from the other country, things are a bit more complicated. Perhaps there are specific methods of how the cup needs to be wrapped and packaged? Maybe there are some very particular ways of how you need to write the address on the package? Also, what about the box itself - perhaps you need to use a very specific type of a box, too?
All of that is to say - while you’re shipping the same item, to both of your friends, the packaging and transportation methods are going to be very different. In a way, this is kind of how wrapped coins work, too!
Wrapped coins allow you to transact with some specific cryptocurrencies on platforms that would otherwise not support the original coins. A wrapped cryptocurrency is like a written IOU - it has the same qualities as the original crypto asset, follows the same price fluctuations, and can be exchanged for the original at any point in time.
The simplest example here would be that of Ethereum, and the Trust cryptocurrency wallet. Ethereum has a network of its own, while the Trust Wallet is based on a different network. So, in order to be able to keep ETH in your Trust Wallet, you need an equivalent - this is where WETH, or Wrapped Ethereum comes in!
Admittedly, all of this isn’t all that easy to wrap your head around, no pun intended! That being said, as you start interacting with the cryptocurrency world, and encounter all of these aforementioned asset types, it will all start falling into place, surely!
Where are Altcoins, Stablecoins, and Wrapped Coins Used?
Up to this point, we’ve covered what are altcoins, stablecoins, and wrapped coins. Now, we definitely need to talk about where are all of these assets used, and why do they even exist, in the first place!
Continuing with the same order of things, let’s start with altcoins. In all honesty, altcoins are really self-explanatory - it’s like asking “what’s the point of all other cryptocurrencies, except for Bitcoin?”
The best altcoins relate to the different crypto-powered projects, various investment strategies, and are the fundamental element of decentralized finance and the cryptocurrency industry, as a whole! If altcoins didn’t exist, you probably wouldn’t be reading this section, in the first place!
Stablecoins are a bit more tricky. They are mostly used for three different purposes - providing liquidity to cryptocurrency projects, representing traditional assets on the blockchain, and being used as a tool to acquire other cryptocurrencies (Bitcoin and altcoins) quickly.
All three of these use cases are super-important, and come with different pros and cons. For now, suffice to say that stablecoins help keep the cryptocurrency industry stable and liquid, and allow traders to invest in the market in a much simpler and more-straightforward manner.
Now, as far as wrapped coins are concerned, I’ve kind of hinted towards their use case already, earlier in this section. These peculiar cryptocurrencies are used when you want to transact or store a specific crypto asset on a network or wallet that does not support that crypto. Thus, you “wrap” your coins, in a way that is supported by the network, and then are able to transact with it there.
So, I’ve told you about altcoins, stablecoins, and wrapped coins. By now, you should have a pretty solid understanding of what each of these three terms mean, and where they are used, in general. However, don't hesitate to read other sections in this Crypto 101 Handbook to get more in-depth knowledge about the whole crypto world.
Imagine that you’ve decided to start working out. While planning out your routine, you’ve come to a crossroads - should you purchase your own equipment, or sign up for a gym membership?<\/p>\n<p>Both positions have their own pros and cons. If you were to buy your own training equipment, this would allow you to be independent, and train whenever you’d like. On the other hand, it would cost a lot of money and would require you to build a mini gym for yourself all on your own. These are the issues that would be avoided by buying a gym membership.<\/p>\n<p>So, this example illustrates the <strong>relationship between crypto coins and tokens<\/strong> perfectly with their cons and pros equally.<\/p>\n<p>In this section, we’re comparing crypto coins VS tokens. To be more specific, we’ll talk about what these two assets are, what are their main differences, and why this is something that you should know about, in the first place.<\/p>\n<p><em>Ready? Let’s get right to it!<\/em><\/p>\n<h2>What are Crypto Coins and Tokens?<\/h2>\n<p>To start things off, before we can really get into the comparison between crypto coins and tokens, we do need to figure out what these two assets are, in the first place.<\/p>\n<p>Some of the most popular examples of <strong>crypto coins<\/strong> include <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-bitcoin-btc/">Bitcoin, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-ethereum-eth/">Ethereum, and <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//goon//binance/">Binance Coin<\/strong><\/a>. In other words, they are popular and very large crypto assets that have some sort of a broad function associated with them.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-1.o.jpg/" alt=\"Coin vs token: Most popular crypto assets vs smaller crypto assets.\" width=\"801\" height=\"502\" \/><\/p>\n<p><strong>Tokens<\/strong>, on the other hand, are <strong>smaller crypto assets<\/strong> that usually serve a much more niche and specific purpose than coins. On top of that, tokens can’t exist on their own - instead, they are “hosted” on the <strong><a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-blockchain/">blockchain of a crypto coin. So, you could say that tokens as so-called child coins that are based on the big environments of parent coins.<\/p>\n<p>Here, it’s also worth mentioning that the term “cryptocurrency” can refer to both coins and tokens - it’s situation-dependent! So, to make it clear here is an example for you: <\/p>\n<p>Imagine if coins are visualized as operating systems on your computer (Microsoft, Windows, or Apple's macOS), then crypto tokens are the programs that you launch in those Windows or macOS environments. Still, Microsoft Windows as a parent software can run without any additional programs, but with extra child apps, let's say Chrome internet browser, Microsoft Office package, and Cyberpunk game, it is more versatile and fun. <em>Simple enough, isn’t it?<\/em><\/p>\n<p><em><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-2.o.jpg/" alt=\"Coin vs token: An example with an operating system.\" width=\"800\" height=\"527\" \/><\/em><\/p>\n<p>Now, a blockchain is a place where data, or information, is stored. I won’t go into detail on the topic in this section, but if you’re really interested to learn more about it, you can check out the section \"<a href=https://www.bitdegree.org/"//crypto//learn//what-is-blockchain/">What is the Blockchain?<\/strong><\/a>\".<\/p>\n<p>That being said, let’s reiterate the earlier point - crypto coins have <strong>their own blockchains<\/strong>, while crypto tokens are hosted on <strong>already-existing blockchains of the coins<\/strong>. In other words, tokens DO NOT have a blockchain of their own but they are children of bigger parents - coins, and they use their parents’ blockchain to launch and operate themself!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-3.o.jpg/" alt=\"Coin vs token: Tokens are children of bigger parent coins.\" width=\"839\" height=\"281\" \/><\/p>\n<p>Another way you can look at it is via the example I’ve given at the beginning of this section. If you want to start working out and want to build a miniature gym of your own (with your own equipment, that is), you will be investing money, time, and a lot of patience. This is the same as when developing a new cryptocurrency - the developers must code the entire logic and functionality model of the brand new blockchain behind their future coin.<\/p>\n<p>Sticking with this example, taking out a local gym membership will save you both money and a lot of time, as well. Thus, creating a token on an existing blockchain environment is much easier - no matter what sort of a function it will serve, the core, underlying logic behind it will still be that of the blockchain that it’s built on.<\/p>\n<p>When discussing crypto coins and tokens, your best bet would be to think about <strong>Ethereum<\/strong>. It’s the second-largest crypto project in the world, right after <strong>Bitcoin<\/strong>, and is often referred to as the “<strong>global computer<\/strong>”.<\/p>\n<p>The <strong>vast majority of all tokens <\/strong>on the current market are developed, created, and launched on the <strong>Ethereum blockchain<\/strong>. Without getting too technical, the main reason why this is the case is that Ethereum provides probably the best and easiest environment for token launch and it was the first highly adopted coin with such a smart blockchain environment that supports this functionality.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-4.o.jpg/" alt=\"Coin vs token: What are crypto coins and tokens?\" width=\"801\" height=\"520\" \/><\/p>\n<p>Returning back, a great example of the more well-known Ethereum-based tokens would be, the so-called, <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-stablecoin/">stablecoins. And yes, it sounds weird, but this is the one and only situation when tokens are called coins, even if they are still created on a parent blockchain of Ethereum, and not on their own. But they are the special ones, and here is why!<\/p>\n<p>A stablecoin is a type of crypto token whose price is “pegged” (or tied) to the value of the dollar, and which is backed by actual dollars, as well. In other words, <strong>one stablecoin will always be worth one dollar<\/strong>. It’s like a virtual US dollar in a blockchain with always the same value of the tangible US dollar in real life.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-5.o.jpg/" alt=\"Coin vs token: Ethereum-based tokens.\" width=\"800\" height=\"747\" \/><\/p>\n<p>To get a broader picture, the most popular stablecoin today is <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-tether-usdt/">USDT <strong>(Tether)<\/strong><\/a>. Tether is HUGE. As of writing this section, it’s the third-largest crypto asset, right after Bitcoin and Ethereum, and it possesses a <strong><a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-market-capitalization-market-cap-mcap/">market capitalization<\/a> of over $78 billion<\/strong>. In addition, as I mentioned before, one Tether will always be worth one US dollar in value and will never change. <\/p>\n<p><em>If Tether is so incredibly huge, then why doesn’t it have a blockchain of its own?<\/em><\/p>\n<p>Once again, this is because of just how good Ethereum is when it comes to launching such crypto assets as stablecoins or any other types of tokens. The team behind Ethereum is constantly improving the technology, and making it easier, universal, and faster for developers to create and deploy tokens on the ETH blockchain.<\/p>\n<p>Developers of new tokens don’t really need to think about building their own blockchain environment from scratch, they get fully universal functionality of Ethereum, all pre-ready in the box.<\/p>\n<h2>What are the Differences Between Coins and Tokens?<\/h2>\n<p>Continuing on with this chapter, we’ve established what crypto coins and tokens are. Now, what are the actual differences between these two?<\/p>\n<p>Well, the biggest difference is just that - while crypto coins have blockchains of their own, tokens use the blockchains of existing coins. Though it’s worth mentioning that <strong>NOT ALL blockchains<\/strong> allow for tokens to be created on them!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-6.o.jpg/" alt=\"Coin vs token: Differences between coins and tokens.\" width=\"800\" height=\"239\" \/><\/p>\n<p>Think about it this way - imagine that each crypto coin is some sort of a building. There are bigger buildings, smaller buildings, and so on. All of them serve different functions and have different features, right?<\/p>\n<p>For example, some buildings have large garages where you can store a lot of cars. Then there are small buildings (for example, private houses) that might not have a designated place for a car, in general!<\/p>\n<p>Well, in this case, let’s imagine that <strong>crypto tokens would actually be the cars<\/strong> that can be stored (or not) next to the buildings in the virtual city we just mentioned.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-7.o.jpg/" alt=\"Coin vs token: An example with a car.\" width=\"801\" height=\"433\" \/><\/p>\n<p>In the same manner, some crypto coin blockchains allow developers to create tokens on them, while others do not. <\/p>\n<p><em>Why? <\/em>Because coin developers simply designed their blockchains that way, just to serve different purposes. Some coins were built with the intention just to <strong>serve their own mission<\/strong>. For example, Bitcoin was designed to just be the money equivalent in the virtual world and that’s it.<\/p>\n<p>On the opposite side, other coins were designed to serve not just their own, but additional features, by sharing their own functionality with tokens that could be launched and function in accordance with the parent coin on which those blockchain tokens were launched.<\/p>\n<p>The most popular blockchains for token creation are <strong>Ethereum<\/strong>, the <strong>Binance Smart Chain<\/strong>, and <strong>TRON<\/strong>.<\/p>\n<p>Another big difference between coins and tokens is that coins usually serve a larger purpose, and are more general in their use, while token utility concentrates on specific projects.<\/p>\n<p><em>Sounds confusing? <\/em>Allow me to give you a few examples.<\/p>\n<p>Let’s take <strong>Bitcoin<\/strong> and the <strong>Uniswap token<\/strong>. Bitcoin is the largest cryptocurrency on the market. Most people agree that its use case is that of a “store of value”. Meaning that people invest in Bitcoin with the hope that their investments will grow in value, or at least that their money will retain its value.<\/p>\n<p><em>A very general and broad use case, wouldn’t you agree?<\/em><\/p>\n<p><em><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-8.o.jpg/" alt=\"Coin vs token: Store of value.\" width=\"800\" height=\"446\" \/><\/em><\/p>\n<p>Now, the Uniswap token is a token of the most popular decentralized crypto exchange, <strong>Uniswap<\/strong>. The exchange allows you to trade one type of Ethereum token for another, in an anonymous manner, and without any official company overseeing the process (thus, it’s decentralized). The Uniswap token, however, isn’t required for those trades.<\/p>\n<p><em>So… What is it even used for, then?<\/em><\/p>\n<p>Well, Uniswap token holders will be able to <strong>vote for changes and upgrades<\/strong> made to the exchange in question and might receive some discounts when swapping other tokens on the platform. Here, the use case of the Uniswap token is very niche and related strictly to the decentralized exchange platform.<\/p>\n<p>Another great example would be the earlier-mentioned <strong>Ethereum coin<\/strong>, and its well-known token called <strong>Shiba Inu<\/strong>. Ethereum blockchain allows developers to create crypto projects in a fast and efficient manner, by using special Ethereum features such as <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-smart-contract/">smart contracts<\/strong><\/a>.<\/p>\n<p>Smart contracts are basically automated agreements between two or more parties. I won’t go too in-depth into the topic, but if you’re interested to learn more about it, you can check out the section \"<a href=https://www.bitdegree.org/"//crypto//learn//what-are-smart-contracts/">What are Smart Contracts?<\/strong><\/a>\". For now, it should suffice to say that smart contracts are an essential part of the Ethereum network.<\/p>\n<p><img title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-9.o.jpg/" alt=\"Coin vs token: Shiba Inu token.\" width=\"800\" height=\"438\" \/>Essentially, Ethereum is used as a launchpad for other projects - it’s like a computer that you run programs on. The Shiba Inu token, on the other hand, would be one of these programs - a token of the Ethereum.<\/p>\n<p>It was created on the Ethereum blockchain and this means that Shiba Inu has all of the <strong>fundamental characteristics of the Ethereum blockchain <\/strong>and it works in accordance with the logic of this network. However, you might wonder - <em>what’s the purpose of this token?<\/em><\/p>\n<p>Well, Shiba Inu was created as something that’s known as a “meme token”. Essentially, it has no single, clear purpose, and is mostly used for investment and meme purposes. Nowadays, you may also use Shiba Inu to donate to certain animal charities. In addition, there’s artwork being created that’s inspired by the project, but once again, its uses are very niche.<\/p>\n<h2>Why Do the Differences Between Coins and Tokens Matter?<\/h2>\n<p>Moving on, we’ve now covered what are crypto coins and tokens, and how they’re different from one another. The last thing that we need to discuss in this section is the question of why these things should even matter to you, in the first place!<\/p>\n<p>As you might have gathered already, coins and tokens are very different in how they work. Thus, anyone who is interested in crypto <strong>should be able to differentiate<\/strong> between the two. It’s one of the biggest questions in crypto.<\/p>\n<p>However, to tell you my honest opinion, apart from being savvy about the topic and understanding how crypto works, you aren’t really going to need to know the specific differences between coins and tokens, especially if you’re simply investing in or trading crypto.<\/p>\n<p>Sure, depending on if it's a coin or a token, the <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-transaction-fee/">transaction fees<\/strong><\/a> are going to be different, and the logic behind the project will possess different features and quirks, too. But, to your average investor, this usually does not matter. Instead, people look into the ACTUAL PROJECTS, and their value proposition - not if it’s a coin or a token.<\/p>","definition":"Did you know that, as of 2022, there are nearly over 10,000 digital coins out there?","status":"published","meta_title":"Coin VS Token: How Do They Differ?","meta_description":"Trying to figure out the difference between coins vs tokens? You'll surely find a detailed answer to this question with examples right here!","meta_keywords":"coin vs token, token vs coin crypto, coin vs token cryptocurrency, difference between token and coin crypto, what is the difference between tokens and coins in cryptocurrency","modified_content":"<p>In this section, I’ll explain the <strong>differences between <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-coin/">crypto coins<\/a> VS <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-token/">tokens./n Imagine that you’ve decided to start working out. While planning out your routine, you’ve come to a crossroads - should you purchase your own equipment, or sign up for a gym membership?<\/p>\n<p>Both positions have their own pros and cons. If you were to buy your own training equipment, this would allow you to be independent, and train whenever you’d like. On the other hand, it would cost a lot of money and would require you to build a mini gym for yourself all on your own. These are the issues that would be avoided by buying a gym membership.<\/p>\n<p>So, this example illustrates the <strong>relationship between crypto coins and tokens<\/strong> perfectly with their cons and pros equally.<\/p>\n<p>In this section, we’re comparing crypto coins VS tokens. To be more specific, we’ll talk about what these two assets are, what are their main differences, and why this is something that you should know about, in the first place.<\/p>\n<p><em>Ready? Let’s get right to it!<\/em><\/p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 suggested-comparisons pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//images//compare-crypto-exchanges.gif/"/n alt=\"Crypto Token VS Coin (Animated Explainer & Examples)\"\n title=\"Crypto Token VS Coin (Animated Explainer & Examples)\" class=\"border-0\">\n <p>Video Explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: Coin VS Token: How Do They Differ?<\/h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"Coin VS Token: How Do They Differ?\" video explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"position-relative youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"kNAC7CXFOTw\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"><\/div>\n <p class=\"text-left dyk-video-title\">Crypto Token VS Coin (Animated Explainer & Examples)<\/p>\n <img data-srcset=\"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/crypto-token-vs-coin-animated-explainer-examples.jpg?tr=w-420 500w,\n https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/crypto-token-vs-coin-animated-explainer-examples.jpg?tr=w-760 1000w\"\n alt=\"Crypto Token VS Coin (Animated Explainer & Examples)\"\n title=\"Crypto Token VS Coin (Animated Explainer & Examples)\"\n class=\"p-0 lazyload\">\n <img class=\"play-button lazyload\" data-target=\"#video-modal\"\n data-src=\"https:\/\/assets.bitdegree.org\/crypto\/assets\/video-button.png?tr=w-85\"\n alt=\"Crypto Token VS Coin (Animated Explainer & Examples)\">\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener noindex\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"><\/i>\n <\/div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE<\/h4>\n <span>ON YOUTUBE<\/span>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"><\/i>\n <\/button>\n <div id=\"iframe\"><\/div>\n <\/div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener noindex\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//crypto-subscribe.jpg/" alt=\"Subscribe\">\n <\/div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE<\/span>\n <\/p>\n <\/div>\n <\/div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease<\/h4>\n <span>New explainer videos every week!<\/span>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n<\/div>\n<h2>What are Crypto Coins and Tokens?<\/h2>\n<p>To start things off, before we can really get into the comparison between crypto coins and tokens, we do need to figure out what these two assets are, in the first place.<\/p>\n<p>Some of the most popular examples of <strong>crypto coins<\/strong> include <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-bitcoin-btc/">Bitcoin, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-ethereum-eth/">Ethereum, and <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//goon//binance/">Binance Coin<\/strong><\/a>. In other words, they are popular and very large crypto assets that have some sort of a broad function associated with them.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-1.o.jpg/" alt=\"Coin vs token: Most popular crypto assets vs smaller crypto assets.\" width=\"801\" height=\"502\" \/><\/p>\n<p><strong>Tokens<\/strong>, on the other hand, are <strong>smaller crypto assets<\/strong> that usually serve a much more niche and specific purpose than coins. On top of that, tokens can’t exist on their own - instead, they are “hosted” on the <strong><a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-blockchain/">blockchain of a crypto coin. So, you could say that tokens as so-called child coins that are based on the big environments of parent coins.<\/p>\n<p>Here, it’s also worth mentioning that the term “cryptocurrency” can refer to both coins and tokens - it’s situation-dependent! So, to make it clear here is an example for you: <\/p>\n<p>Imagine if coins are visualized as operating systems on your computer (Microsoft, Windows, or Apple's macOS), then crypto tokens are the programs that you launch in those Windows or macOS environments. Still, Microsoft Windows as a parent software can run without any additional programs, but with extra child apps, let's say Chrome internet browser, Microsoft Office package, and Cyberpunk game, it is more versatile and fun. <em>Simple enough, isn’t it?<\/em><\/p>\n<p><em><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-2.o.jpg/" alt=\"Coin vs token: An example with an operating system.\" width=\"800\" height=\"527\" \/><\/em><\/p>\n<p>Now, a blockchain is a place where data, or information, is stored. I won’t go into detail on the topic in this section, but if you’re really interested to learn more about it, you can check out the section \"<a href=https://www.bitdegree.org/"//crypto//learn//what-is-blockchain/">What is the Blockchain?<\/strong><\/a>\".<\/p>\n<p>That being said, let’s reiterate the earlier point - crypto coins have <strong>their own blockchains<\/strong>, while crypto tokens are hosted on <strong>already-existing blockchains of the coins<\/strong>. In other words, tokens DO NOT have a blockchain of their own but they are children of bigger parents - coins, and they use their parents’ blockchain to launch and operate themself!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-3.o.jpg/" alt=\"Coin vs token: Tokens are children of bigger parent coins.\" width=\"839\" height=\"281\" \/><\/p>\n<p>Another way you can look at it is via the example I’ve given at the beginning of this section. If you want to start working out and want to build a miniature gym of your own (with your own equipment, that is), you will be investing money, time, and a lot of patience. This is the same as when developing a new cryptocurrency - the developers must code the entire logic and functionality model of the brand new blockchain behind their future coin.<\/p>\n<p>Sticking with this example, taking out a local gym membership will save you both money and a lot of time, as well. Thus, creating a token on an existing blockchain environment is much easier - no matter what sort of a function it will serve, the core, underlying logic behind it will still be that of the blockchain that it’s built on.<\/p>\n<p>When discussing crypto coins and tokens, your best bet would be to think about <strong>Ethereum<\/strong>. It’s the second-largest crypto project in the world, right after <strong>Bitcoin<\/strong>, and is often referred to as the “<strong>global computer<\/strong>”.<\/p>\n<p>The <strong>vast majority of all tokens <\/strong>on the current market are developed, created, and launched on the <strong>Ethereum blockchain<\/strong>. Without getting too technical, the main reason why this is the case is that Ethereum provides probably the best and easiest environment for token launch and it was the first highly adopted coin with such a smart blockchain environment that supports this functionality.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-4.o.jpg/" alt=\"Coin vs token: What are crypto coins and tokens?\" width=\"801\" height=\"520\" \/><\/p>\n<p>Returning back, a great example of the more well-known Ethereum-based tokens would be, the so-called, <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-stablecoin/">stablecoins. And yes, it sounds weird, but this is the one and only situation when tokens are called coins, even if they are still created on a parent blockchain of Ethereum, and not on their own. But they are the special ones, and here is why!<\/p>\n<p>A stablecoin is a type of crypto token whose price is “pegged” (or tied) to the value of the dollar, and which is backed by actual dollars, as well. In other words, <strong>one stablecoin will always be worth one dollar<\/strong>. It’s like a virtual US dollar in a blockchain with always the same value of the tangible US dollar in real life.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-5.o.jpg/" alt=\"Coin vs token: Ethereum-based tokens.\" width=\"800\" height=\"747\" \/><\/p>\n<p>To get a broader picture, the most popular stablecoin today is <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-tether-usdt/">USDT <strong>(Tether)<\/strong><\/a>. Tether is HUGE. As of writing this section, it’s the third-largest crypto asset, right after Bitcoin and Ethereum, and it possesses a <strong><a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-market-capitalization-market-cap-mcap/">market capitalization<\/a> of over $78 billion<\/strong>. In addition, as I mentioned before, one Tether will always be worth one US dollar in value and will never change. <\/p>\n<p><em>If Tether is so incredibly huge, then why doesn’t it have a blockchain of its own?<\/em><\/p>\n<p>Once again, this is because of just how good Ethereum is when it comes to launching such crypto assets as stablecoins or any other types of tokens. The team behind Ethereum is constantly improving the technology, and making it easier, universal, and faster for developers to create and deploy tokens on the ETH blockchain.<\/p>\n<p>Developers of new tokens don’t really need to think about building their own blockchain environment from scratch, they get fully universal functionality of Ethereum, all pre-ready in the box.<\/p>\n<h2>What are the Differences Between Coins and Tokens?<\/h2>\n<p>Continuing on with this chapter, we’ve established what crypto coins and tokens are. Now, what are the actual differences between these two?<\/p>\n<p>Well, the biggest difference is just that - while crypto coins have blockchains of their own, tokens use the blockchains of existing coins. Though it’s worth mentioning that <strong>NOT ALL blockchains<\/strong> allow for tokens to be created on them!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-6.o.jpg/" alt=\"Coin vs token: Differences between coins and tokens.\" width=\"800\" height=\"239\" \/><\/p>\n<p>Think about it this way - imagine that each crypto coin is some sort of a building. There are bigger buildings, smaller buildings, and so on. All of them serve different functions and have different features, right?<\/p>\n<p>For example, some buildings have large garages where you can store a lot of cars. Then there are small buildings (for example, private houses) that might not have a designated place for a car, in general!<\/p>\n<p>Well, in this case, let’s imagine that <strong>crypto tokens would actually be the cars<\/strong> that can be stored (or not) next to the buildings in the virtual city we just mentioned.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-7.o.jpg/" alt=\"Coin vs token: An example with a car.\" width=\"801\" height=\"433\" \/><\/p>\n<p>In the same manner, some crypto coin blockchains allow developers to create tokens on them, while others do not. <\/p>\n<p><em>Why? <\/em>Because coin developers simply designed their blockchains that way, just to serve different purposes. Some coins were built with the intention just to <strong>serve their own mission<\/strong>. For example, Bitcoin was designed to just be the money equivalent in the virtual world and that’s it.<\/p>\n<p>On the opposite side, other coins were designed to serve not just their own, but additional features, by sharing their own functionality with tokens that could be launched and function in accordance with the parent coin on which those blockchain tokens were launched.<\/p>\n<p>The most popular blockchains for token creation are <strong>Ethereum<\/strong>, the <strong>Binance Smart Chain<\/strong>, and <strong>TRON<\/strong>.<\/p>\n<p>Another big difference between coins and tokens is that coins usually serve a larger purpose, and are more general in their use, while token utility concentrates on specific projects.<\/p>\n<p><em>Sounds confusing? <\/em>Allow me to give you a few examples.<\/p>\n<p>Let’s take <strong>Bitcoin<\/strong> and the <strong>Uniswap token<\/strong>. Bitcoin is the largest cryptocurrency on the market. Most people agree that its use case is that of a “store of value”. Meaning that people invest in Bitcoin with the hope that their investments will grow in value, or at least that their money will retain its value.<\/p>\n<p><em>A very general and broad use case, wouldn’t you agree?<\/em><\/p>\n<p><em><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-8.o.jpg/" alt=\"Coin vs token: Store of value.\" width=\"800\" height=\"446\" \/><\/em><\/p>\n<p>Now, the Uniswap token is a token of the most popular decentralized crypto exchange, <strong>Uniswap<\/strong>. The exchange allows you to trade one type of Ethereum token for another, in an anonymous manner, and without any official company overseeing the process (thus, it’s decentralized). The Uniswap token, however, isn’t required for those trades.<\/p>\n<p><em>So… What is it even used for, then?<\/em><\/p>\n<p>Well, Uniswap token holders will be able to <strong>vote for changes and upgrades<\/strong> made to the exchange in question and might receive some discounts when swapping other tokens on the platform. Here, the use case of the Uniswap token is very niche and related strictly to the decentralized exchange platform.<\/p>\n<p>Another great example would be the earlier-mentioned <strong>Ethereum coin<\/strong>, and its well-known token called <strong>Shiba Inu<\/strong>. Ethereum blockchain allows developers to create crypto projects in a fast and efficient manner, by using special Ethereum features such as <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-smart-contract/">smart contracts<\/strong><\/a>.<\/p>\n<p>Smart contracts are basically automated agreements between two or more parties. I won’t go too in-depth into the topic, but if you’re interested to learn more about it, you can check out the section \"<a href=https://www.bitdegree.org/"//crypto//learn//what-are-smart-contracts/">What are Smart Contracts?<\/strong><\/a>\". For now, it should suffice to say that smart contracts are an essential part of the Ethereum network.<\/p>\n<p><img title=\"\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//crypto-coins-vs-tokens-9.o.jpg/" alt=\"Coin vs token: Shiba Inu token.\" width=\"800\" height=\"438\" \/>Essentially, Ethereum is used as a launchpad for other projects - it’s like a computer that you run programs on. The Shiba Inu token, on the other hand, would be one of these programs - a token of the Ethereum.<\/p>\n<p>It was created on the Ethereum blockchain and this means that Shiba Inu has all of the <strong>fundamental characteristics of the Ethereum blockchain <\/strong>and it works in accordance with the logic of this network. However, you might wonder - <em>what’s the purpose of this token?<\/em><\/p>\n<p>Well, Shiba Inu was created as something that’s known as a “meme token”. Essentially, it has no single, clear purpose, and is mostly used for investment and meme purposes. Nowadays, you may also use Shiba Inu to donate to certain animal charities. In addition, there’s artwork being created that’s inspired by the project, but once again, its uses are very niche.<\/p>\n<h2>Why Do the Differences Between Coins and Tokens Matter?<\/h2>\n<p>Moving on, we’ve now covered what are crypto coins and tokens, and how they’re different from one another. The last thing that we need to discuss in this section is the question of why these things should even matter to you, in the first place!<\/p>\n<p>As you might have gathered already, coins and tokens are very different in how they work. Thus, anyone who is interested in crypto <strong>should be able to differentiate<\/strong> between the two. It’s one of the biggest questions in crypto.<\/p>\n<p>However, to tell you my honest opinion, apart from being savvy about the topic and understanding how crypto works, you aren’t really going to need to know the specific differences between coins and tokens, especially if you’re simply investing in or trading crypto.<\/p>\n<p>Sure, depending on if it's a coin or a token, the <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-transaction-fee/">transaction fees<\/strong><\/a> are going to be different, and the logic behind the project will possess different features and quirks, too. But, to your average investor, this usually does not matter. Instead, people look into the ACTUAL PROJECTS, and their value proposition - not if it’s a coin or a token.<\/p>","youtube_video":{"id":8,"channel_id":1,"sort":92,"video_title":"Crypto Token VS Coin (Animated Explainer & Examples)","description":"What\u2019s the difference between crypto Tokens VS Coins?\n\nBoth coins and tokens are cryptocurrency assets. However, coins have blockchains of their own, while tokens are built on existing blockchains, and usually represent some sort of a project.\n\nToday I\u2019ll explain to you what crypto coins and tokens are, without using any complicated crypto terminology or industry-specific jargon. With the help of examples and visual stories, I will also discuss the specific differences between the two assets, and explain why you should care about all of it, in the first place.\n\nDo you think the differences between coins and tokens are important? Share your opinions in the comments down below!\n\nVideo Time Table:\n\n0:00 Introduction to Coin VS Token\n1:12 What Are Crypto Coins & Tokens?\n6:52 What Are the Differences Between Coins & Tokens?\n11:13 Why Do The Differences Between Coins & Tokens Matter?\n12:16 Wrap-up: Coin VS Token\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps:\/\/twitter.com\/crypto_xplained\n\n#CoinVsToken #TokenVsCoin #CryptoTokenVsCoin #CryptoCoin #CryptoToken #Blockchain #Cryptocurrencies","video_id":"kNAC7CXFOTw","duration":760,"view_count":16231,"thumbnail_url":"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/crypto-token-vs-coin-animated-explainer-examples.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2022-01-27T16:19:15.000000Z","created_at":"2022-02-21T13:20:28.000000Z","updated_at":"2024-01-09T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}}}"
:model="{"id":36,"chapter_id":2,"order":5,"featured_image_id":3067,"youtube_video_id":37,"author_id":1,"created_at":"2022-08-30T10:59:26.000000Z","updated_at":"2023-12-22T11:11:55.000000Z","slug":"what-are-stablecoins","title":"What are Stablecoins, Altcoins & Wrapped Coins?","content":"<p>In this section, we’re going to talk about what are <strong>stablecoins, altcoins, and wrapped coins,<\/strong> and the differences between all of them!<\/p>\n<p>The cryptocurrency world is full of industry-specific jargon. There’s a huge number of different terms for you to figure out and understand, when you’re just starting out with your crypto journey!<\/p>\n<p>Many of these terms can get really confusing, and clamp up into one, huge mess. This is especially true when you consider all of the different cryptocurrency-related expressions and names! Well, today, <strong>I’m going to clear up some of that confusion for you.<\/strong><\/p>\n<p>In this section, we are going to talk about altcoins, stablecoins, and wrapped coins. First, I’ll tell you what each of these are, and give you some examples. Then, we’ll also discuss where are these crypto assets mainly used.<\/p>\n<p><em>So, let’s get to it!<\/em><\/p>\n<h2>What are Altcoins, Stablecoins, and Wrapped Coins?<\/h2>\n<p>To start things off, in order to understand these concepts better, we need to break down each of the terms, individually.<\/p>\n<p>The <strong>altcoin<\/strong> definition is, honestly, the simplest of the three, as far as understanding it goes. However, it’s also a term that has a lot of history, and has changed a bit, over the years.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What are stablecoins: Altcoins.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what_are_altcoins_stablecoins_wrapped_coins_01.o.jpg/" alt=\"What are stablecoins: Altcoins.\" width=\"1000\" height=\"277\" \/><\/p>\n<p>From the very origin of the term, “crypto altcoins” referred to <strong>all other cryptocurrencies that aren’t <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-bitcoin-btc/">Bitcoin. So, whether it be Ethereum, Cardano, or Shiba Inu, all of these would be called “altcoins”, since they are NOT Bitcoin. <em>Simple!<\/em><\/p>\n<p>With time, however, the cryptocurrency market EXPLODED - there are new coins and tokens coming into the market seemingly every single day! This is why, at some point in time, people started using the terms “altcoins”, “best altcoins”, and looking at “where can I buy altcoins?”, in reference to <strong>all of the different cryptocurrencies that are<\/strong> <strong>not the top-10 assets<\/strong> - Bitcoin, Ethereum, Ripple, and so on. So, in other words, if a coin or token isn’t in the top-10 list, it’s considered an “altcoin”.<\/p>\n<p>Not sure what’s the difference between crypto coins and tokens? Well, I have <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//coin-vs-token/">a dedicated section on this topic<\/strong><\/a> - make sure to check it out, and learn all of the essential differences!<\/p>\n<p>Going back to what are altcoins, you can look at it like this: imagine that a candy shop stocks a single chocolate bar brand. It’s the most popular brand, and has been around forever. With time, there are new brands of chocolate coming into the shop, and gaining popularity - some become super-popular, while others come and go. So, at some point, everyone will know all of the main, most popular brands - the first one, and then a few others, that have managed to gain popularity over the years -, while the rest of the chocolate bars will be viewed as “alternatives”.<\/p>\n<p>If you want to keep it simple, though, you may also view altcoins as <strong>“alternatives to Bitcoin”.<\/strong> So, whenever your friends say that they’re thinking about “investing in altcoins”, you will now know what they mean!<\/p>\n<p>Moving on, <strong>what are stablecoins?<\/strong> Well, they’re a really interesting concept. While they have been subject to a lot of controversy, as of late, it’s worth stating that the premise behind stablecoins is quite complicated, and can be tricky to truly comprehend!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What are stablecoins: Stablecoin pegged to fiat.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what_are_altcoins_stablecoins_wrapped_coins_02.o.jpg/" alt=\"What are stablecoins: Stablecoin pegged to fiat.\" width=\"1000\" height=\"772\" \/><\/p>\n<p>So, how do stablecoins work? Well, a stablecoin is a cryptocurrency asset that is <strong>pegged to a fiat (or, governmental) currency<\/strong> - in most cases, this will be the Unites States dollar. Here, “pegged” means that the value of a single stablecoin is “tied” to the dollar - one stablecoin will <em>(theoretically) <\/em>always be worth one dollar <em>(or one unit of the currency that it’s pegged to)<\/em>.<\/p>\n<p>Following that, the term <strong>“backed”<\/strong> will always come up when talking about stablecoins, too. Put simply, this means that, for every stablecoin issued, there’s going to be some sort of an established asset to back it up <em>(most often, this would be the actual US dollar)<\/em>.<\/p>\n<p>So, think about it like this - imagine that you’ve decided to sell concert tickets. A person can come up to you, and purchase a ticket for $1. Now, for the sake of this example, let’s just say that, due to some unforeseen event, half of the ticket buyers decided not to go to the concert, and are asking for a refund.<\/p>\n<p>If you have all of the money that they’ve paid you for the ticket, and have used it to “back” the ticket purchases, you are able to issue refunds, no problem - if not, then suddenly, there’s no money for the customers to get back, and you start running into all sorts of problems!<\/p>\n<p><strong>In a very particular sense, the same sentiment is true with stablecoins.<\/strong> That is why all stablecoins need to be backed by governmental money, or some sort of a valuable, established asset. It’s also why there’s so much controversy in the world of crypto, regarding unbacked assets, and why people are questioning are stablecoins safe, to begin with.<\/p>\n<p>It’s worth mentioning here that stablecoins are also segmented into a few different categories, as well - the most well-known of which these days is <strong>“algo-”, or<\/strong> <strong>algorithmic stablecoins. <\/strong>It’s a complex topic that deserves a section of its own, but essentially, to put it short and simple, algo-stablecoins make use of special algorithms in order to keep their price stable. As you might have heard with the widespread news of the Terra Luna events, this type of stablecoins is yet to be widely successful.<\/p>\n<p>So, altcoins are all cryptocurrencies that are not Bitcoin, while stablecoins are special crypto assets that have their price pegged to a traditional currency, often the US dollar. <strong>What are wrapped coins, though?<\/strong><\/p>\n<p>To tell you the truth, wrapped coins are probably the most difficult to understand, if you’re just starting out with crypto! I’ll break things down as simple as possible, but do make sure to <strong>check out other sections in this Crypto 101 Handbook<\/strong>, so that you could get a better understanding of the topic, as a whole!<\/p>\n<p>Now, imagine that you want to send a couple of packages to two of your friends - one who lives in another city, and another who lives in a different country. You want to send two of them the same thing - say, custom-made cups that you’ve handcrafted yourself!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What are stablecoins: An example with a tea cup.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what_are_altcoins_stablecoins_wrapped_coins_03.o.jpg/" alt=\"What are stablecoins: An example with a tea cup.\" width=\"1000\" height=\"727\" \/><\/p>\n<p>When it comes to your friend from another city, the process of packing the cup is pretty simple - you place it in a box, stuff it with cushioning, wrap everything up, stick on a shipment sticker, and send it from the post office. <em>Simple!<\/em><\/p>\n<p>However, when it comes to your friend from the other country, <strong>things are a bit more complicated. <\/strong>Perhaps there are specific methods of how the cup needs to be wrapped and packaged? Maybe there are some very particular ways of how you need to write the address on the package? Also, what about the box itself - perhaps you need to use a very specific type of a box, too?<\/p>\n<p>All of that is to say - while you’re shipping the same item, to both of your friends, the packaging and transportation methods are going to be very different. In a way, this is kind of how wrapped coins work, too!<\/p>\n<p>Wrapped coins allow you to transact with some specific cryptocurrencies on platforms that would otherwise not support the original coins. <strong>A wrapped cryptocurrency is like a written IOU<\/strong> - it has the same qualities as the original crypto asset, follows the same price fluctuations, and can be exchanged for the original at any point in time.<\/p>\n<p>The simplest example here would be that of <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-ethereum-eth/">Ethereum, and the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//goon//trust-wallet/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Trust cryptocurrency wallet<\/strong><\/a><strong>.<\/strong> Ethereum has a network of its own, while the Trust Wallet is based on a different network. So, in order to be able to keep ETH in your Trust Wallet, you need an equivalent - this is where <strong>WETH, or<\/strong> <strong>Wrapped Ethereum<\/strong> comes in!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What are stablecoins: WETH.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what_are_altcoins_stablecoins_wrapped_coins_04.o.jpg/" alt=\"What are stablecoins: WETH.\" width=\"1000\" height=\"747\" \/><\/p>\n<p>Admittedly, all of this isn’t all that easy to wrap your head around, no pun intended! That being said, as you start interacting with the cryptocurrency world, and encounter all of these aforementioned asset types, it will all start falling into place, surely!<\/p>\n<h2>Where are Altcoins, Stablecoins, and Wrapped Coins Used?<\/h2>\n<p>Up to this point, we’ve covered what are altcoins, stablecoins, and wrapped coins. Now, we definitely need to talk about <strong>where are all of these assets used<\/strong>, and why do they even exist, in the first place!<\/p>\n<p>Continuing with the same order of things, <strong>let’s start with altcoins.<\/strong> In all honesty, altcoins are really self-explanatory - it’s like asking <em>“what’s the point of all other cryptocurrencies, except for Bitcoin?”<\/em><\/p>\n<p>The best altcoins relate to the different crypto-powered projects, various investment strategies, and are the fundamental element of decentralized finance and the cryptocurrency industry, as a whole! If altcoins didn’t exist, you probably wouldn’t be reading this section, in the first place!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What are stablecoins: Stablecoins.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what_are_altcoins_stablecoins_wrapped_coins_05.o.jpg/" alt=\"What are stablecoins: Stablecoins.\" width=\"1000\" height=\"355\" \/><\/p>\n<p><strong>Stablecoins are a bit more tricky.<\/strong> They are mostly used for three different purposes - providing liquidity to cryptocurrency projects, representing traditional assets on the blockchain, and being used as a tool to acquire other cryptocurrencies <em>(Bitcoin and altcoins)<\/em> quickly.<\/p>\n<p>All three of these use cases are super-important, and come with different pros and cons. For now, suffice to say that <strong>stablecoins help keep the cryptocurrency industry stable and liquid<\/strong>, and allow traders to invest in the market in a much simpler and more-straightforward manner.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What are stablecoins: Wrapped coins.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what_are_altcoins_stablecoins_wrapped_coins_06.o.jpg/" alt=\"What are stablecoins: Wrapped coins.\" width=\"1000\" height=\"800\" \/><\/p>\n<p>Now, as far as <strong>wrapped coins<\/strong> are concerned, I’ve kind of hinted towards their use case already, earlier in this section. These peculiar cryptocurrencies are used when you want to transact or store a specific crypto asset on a network or wallet that does not support that crypto. Thus, you “wrap” your coins, in a way that is supported by the network, and then are able to transact with it there.<\/p>\n<p>So, I’ve told you about altcoins, stablecoins, and wrapped coins. By now, you should have a pretty solid understanding of what each of these three terms mean, and where they are used, in general. However, don't hesitate to read other sections in this <strong>Crypto 101 Handbook<\/strong> to get more in-depth knowledge about the whole crypto world.<\/p>","definition":"Did you know that an altcoin is essentially any other crypto asset apart from Bitcoin?","status":"published","meta_title":"What are Stablecoins, Altcoins, and Wrapped Coins?","meta_description":"Wondering what are stablecoins, altcoins, wrapped coins, or other types of coins? Figure out all differences and similarities right here!","meta_keywords":"what are stablecoins, what are altcoins, how do stablecoins work, altcoins to buy, stablecoins list, best altcoins\nwhere to buy altcoins, buying altcoins, altcoins with most potential, are stablecoins safe, altcoins definition, stablecoins explained, how many altcoins are there, crypto altcoins, where can i buy altcoins, what are wrapped coins","modified_content":"<p>In this section, we’re going to talk about what are <strong>stablecoins, altcoins, and wrapped coins,<\/strong> and the differences between all of them!<\/p>\n<p>The cryptocurrency world is full of industry-specific jargon. There’s a huge number of different terms for you to figure out and understand, when you’re just starting out with your crypto journey!<\/p>\n<p>Many of these terms can get really confusing, and clamp up into one, huge mess. This is especially true when you consider all of the different cryptocurrency-related expressions and names! Well, today, <strong>I’m going to clear up some of that confusion for you.<\/strong><\/p>\n<p>In this section, we are going to talk about altcoins, stablecoins, and wrapped coins. First, I’ll tell you what each of these are, and give you some examples. Then, we’ll also discuss where are these crypto assets mainly used.<\/p>\n<p><em>So, let’s get to it!<\/em><\/p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 suggested-comparisons pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//images//compare-crypto-exchanges.gif/"/n alt=\"What are Stablecoins, Altcoins & Wrapped Coins Explained!\"\n title=\"What are Stablecoins, Altcoins & Wrapped Coins Explained!\" class=\"border-0\">\n <p>Video Explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: What are Stablecoins, Altcoins & Wrapped Coins?<\/h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"What are Stablecoins, Altcoins & Wrapped Coins?\" video explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"position-relative youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"WPBXOviUIls\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"><\/div>\n <p class=\"text-left dyk-video-title\">What are Stablecoins, Altcoins & Wrapped Coins Explained!<\/p>\n <img data-srcset=\"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-are-stablecoins-altcoins-wrapped-coins-explained.jpg?tr=w-420 500w,\n https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-are-stablecoins-altcoins-wrapped-coins-explained.jpg?tr=w-760 1000w\"\n alt=\"What are Stablecoins, Altcoins & Wrapped Coins Explained!\"\n title=\"What are Stablecoins, Altcoins & Wrapped Coins Explained!\"\n class=\"p-0 lazyload\">\n <img class=\"play-button lazyload\" data-target=\"#video-modal\"\n data-src=\"https:\/\/assets.bitdegree.org\/crypto\/assets\/video-button.png?tr=w-85\"\n alt=\"What are Stablecoins, Altcoins & Wrapped Coins Explained!\">\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener noindex\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"><\/i>\n <\/div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE<\/h4>\n <span>ON YOUTUBE<\/span>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"><\/i>\n <\/button>\n <div id=\"iframe\"><\/div>\n <\/div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener noindex\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//crypto-subscribe.jpg/" alt=\"Subscribe\">\n <\/div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE<\/span>\n <\/p>\n <\/div>\n <\/div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease<\/h4>\n <span>New explainer videos every week!<\/span>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n<\/div>\n<h2>What are Altcoins, Stablecoins, and Wrapped Coins?<\/h2>\n<p>To start things off, in order to understand these concepts better, we need to break down each of the terms, individually.<\/p>\n<p>The <strong>altcoin<\/strong> definition is, honestly, the simplest of the three, as far as understanding it goes. However, it’s also a term that has a lot of history, and has changed a bit, over the years.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What are stablecoins: Altcoins.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what_are_altcoins_stablecoins_wrapped_coins_01.o.jpg/" alt=\"What are stablecoins: Altcoins.\" width=\"1000\" height=\"277\" \/><\/p>\n<p>From the very origin of the term, “crypto altcoins” referred to <strong>all other cryptocurrencies that aren’t <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-bitcoin-btc/">Bitcoin. So, whether it be Ethereum, Cardano, or Shiba Inu, all of these would be called “altcoins”, since they are NOT Bitcoin. <em>Simple!<\/em><\/p>\n<p>With time, however, the cryptocurrency market EXPLODED - there are new coins and tokens coming into the market seemingly every single day! This is why, at some point in time, people started using the terms “altcoins”, “best altcoins”, and looking at “where can I buy altcoins?”, in reference to <strong>all of the different cryptocurrencies that are<\/strong> <strong>not the top-10 assets<\/strong> - Bitcoin, Ethereum, Ripple, and so on. So, in other words, if a coin or token isn’t in the top-10 list, it’s considered an “altcoin”.<\/p>\n<p>Not sure what’s the difference between crypto coins and tokens? Well, I have <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//coin-vs-token/">a dedicated section on this topic<\/strong><\/a> - make sure to check it out, and learn all of the essential differences!<\/p>\n<p>Going back to what are altcoins, you can look at it like this: imagine that a candy shop stocks a single chocolate bar brand. It’s the most popular brand, and has been around forever. With time, there are new brands of chocolate coming into the shop, and gaining popularity - some become super-popular, while others come and go. So, at some point, everyone will know all of the main, most popular brands - the first one, and then a few others, that have managed to gain popularity over the years -, while the rest of the chocolate bars will be viewed as “alternatives”.<\/p>\n<p>If you want to keep it simple, though, you may also view altcoins as <strong>“alternatives to Bitcoin”.<\/strong> So, whenever your friends say that they’re thinking about “investing in altcoins”, you will now know what they mean!<\/p>\n<p>Moving on, <strong>what are stablecoins?<\/strong> Well, they’re a really interesting concept. While they have been subject to a lot of controversy, as of late, it’s worth stating that the premise behind stablecoins is quite complicated, and can be tricky to truly comprehend!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What are stablecoins: Stablecoin pegged to fiat.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what_are_altcoins_stablecoins_wrapped_coins_02.o.jpg/" alt=\"What are stablecoins: Stablecoin pegged to fiat.\" width=\"1000\" height=\"772\" \/><\/p>\n<p>So, how do stablecoins work? Well, a stablecoin is a cryptocurrency asset that is <strong>pegged to a fiat (or, governmental) currency<\/strong> - in most cases, this will be the Unites States dollar. Here, “pegged” means that the value of a single stablecoin is “tied” to the dollar - one stablecoin will <em>(theoretically) <\/em>always be worth one dollar <em>(or one unit of the currency that it’s pegged to)<\/em>.<\/p>\n<p>Following that, the term <strong>“backed”<\/strong> will always come up when talking about stablecoins, too. Put simply, this means that, for every stablecoin issued, there’s going to be some sort of an established asset to back it up <em>(most often, this would be the actual US dollar)<\/em>.<\/p>\n<p>So, think about it like this - imagine that you’ve decided to sell concert tickets. A person can come up to you, and purchase a ticket for $1. Now, for the sake of this example, let’s just say that, due to some unforeseen event, half of the ticket buyers decided not to go to the concert, and are asking for a refund.<\/p>\n<p>If you have all of the money that they’ve paid you for the ticket, and have used it to “back” the ticket purchases, you are able to issue refunds, no problem - if not, then suddenly, there’s no money for the customers to get back, and you start running into all sorts of problems!<\/p>\n<p><strong>In a very particular sense, the same sentiment is true with stablecoins.<\/strong> That is why all stablecoins need to be backed by governmental money, or some sort of a valuable, established asset. It’s also why there’s so much controversy in the world of crypto, regarding unbacked assets, and why people are questioning are stablecoins safe, to begin with.<\/p>\n<p>It’s worth mentioning here that stablecoins are also segmented into a few different categories, as well - the most well-known of which these days is <strong>“algo-”, or<\/strong> <strong>algorithmic stablecoins. <\/strong>It’s a complex topic that deserves a section of its own, but essentially, to put it short and simple, algo-stablecoins make use of special algorithms in order to keep their price stable. As you might have heard with the widespread news of the Terra Luna events, this type of stablecoins is yet to be widely successful.<\/p>\n<p>So, altcoins are all cryptocurrencies that are not Bitcoin, while stablecoins are special crypto assets that have their price pegged to a traditional currency, often the US dollar. <strong>What are wrapped coins, though?<\/strong><\/p>\n<p>To tell you the truth, wrapped coins are probably the most difficult to understand, if you’re just starting out with crypto! I’ll break things down as simple as possible, but do make sure to <strong>check out other sections in this Crypto 101 Handbook<\/strong>, so that you could get a better understanding of the topic, as a whole!<\/p>\n<p>Now, imagine that you want to send a couple of packages to two of your friends - one who lives in another city, and another who lives in a different country. You want to send two of them the same thing - say, custom-made cups that you’ve handcrafted yourself!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What are stablecoins: An example with a tea cup.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what_are_altcoins_stablecoins_wrapped_coins_03.o.jpg/" alt=\"What are stablecoins: An example with a tea cup.\" width=\"1000\" height=\"727\" \/><\/p>\n<p>When it comes to your friend from another city, the process of packing the cup is pretty simple - you place it in a box, stuff it with cushioning, wrap everything up, stick on a shipment sticker, and send it from the post office. <em>Simple!<\/em><\/p>\n<p>However, when it comes to your friend from the other country, <strong>things are a bit more complicated. <\/strong>Perhaps there are specific methods of how the cup needs to be wrapped and packaged? Maybe there are some very particular ways of how you need to write the address on the package? Also, what about the box itself - perhaps you need to use a very specific type of a box, too?<\/p>\n<p>All of that is to say - while you’re shipping the same item, to both of your friends, the packaging and transportation methods are going to be very different. In a way, this is kind of how wrapped coins work, too!<\/p>\n<p>Wrapped coins allow you to transact with some specific cryptocurrencies on platforms that would otherwise not support the original coins. <strong>A wrapped cryptocurrency is like a written IOU<\/strong> - it has the same qualities as the original crypto asset, follows the same price fluctuations, and can be exchanged for the original at any point in time.<\/p>\n<p>The simplest example here would be that of <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-ethereum-eth/">Ethereum, and the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//goon//trust-wallet/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Trust cryptocurrency wallet<\/strong><\/a><strong>.<\/strong> Ethereum has a network of its own, while the Trust Wallet is based on a different network. So, in order to be able to keep ETH in your Trust Wallet, you need an equivalent - this is where <strong>WETH, or<\/strong> <strong>Wrapped Ethereum<\/strong> comes in!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What are stablecoins: WETH.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what_are_altcoins_stablecoins_wrapped_coins_04.o.jpg/" alt=\"What are stablecoins: WETH.\" width=\"1000\" height=\"747\" \/><\/p>\n<p>Admittedly, all of this isn’t all that easy to wrap your head around, no pun intended! That being said, as you start interacting with the cryptocurrency world, and encounter all of these aforementioned asset types, it will all start falling into place, surely!<\/p>\n<h2>Where are Altcoins, Stablecoins, and Wrapped Coins Used?<\/h2>\n<p>Up to this point, we’ve covered what are altcoins, stablecoins, and wrapped coins. Now, we definitely need to talk about <strong>where are all of these assets used<\/strong>, and why do they even exist, in the first place!<\/p>\n<p>Continuing with the same order of things, <strong>let’s start with altcoins.<\/strong> In all honesty, altcoins are really self-explanatory - it’s like asking <em>“what’s the point of all other cryptocurrencies, except for Bitcoin?”<\/em><\/p>\n<p>The best altcoins relate to the different crypto-powered projects, various investment strategies, and are the fundamental element of decentralized finance and the cryptocurrency industry, as a whole! If altcoins didn’t exist, you probably wouldn’t be reading this section, in the first place!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What are stablecoins: Stablecoins.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what_are_altcoins_stablecoins_wrapped_coins_05.o.jpg/" alt=\"What are stablecoins: Stablecoins.\" width=\"1000\" height=\"355\" \/><\/p>\n<p><strong>Stablecoins are a bit more tricky.<\/strong> They are mostly used for three different purposes - providing liquidity to cryptocurrency projects, representing traditional assets on the blockchain, and being used as a tool to acquire other cryptocurrencies <em>(Bitcoin and altcoins)<\/em> quickly.<\/p>\n<p>All three of these use cases are super-important, and come with different pros and cons. For now, suffice to say that <strong>stablecoins help keep the cryptocurrency industry stable and liquid<\/strong>, and allow traders to invest in the market in a much simpler and more-straightforward manner.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What are stablecoins: Wrapped coins.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what_are_altcoins_stablecoins_wrapped_coins_06.o.jpg/" alt=\"What are stablecoins: Wrapped coins.\" width=\"1000\" height=\"800\" \/><\/p>\n<p>Now, as far as <strong>wrapped coins<\/strong> are concerned, I’ve kind of hinted towards their use case already, earlier in this section. These peculiar cryptocurrencies are used when you want to transact or store a specific crypto asset on a network or wallet that does not support that crypto. Thus, you “wrap” your coins, in a way that is supported by the network, and then are able to transact with it there.<\/p>\n<p>So, I’ve told you about altcoins, stablecoins, and wrapped coins. By now, you should have a pretty solid understanding of what each of these three terms mean, and where they are used, in general. However, don't hesitate to read other sections in this <strong>Crypto 101 Handbook<\/strong> to get more in-depth knowledge about the whole crypto world.<\/p>","youtube_video":{"id":37,"channel_id":1,"sort":59,"video_title":"What are Stablecoins, Altcoins & Wrapped Coins Explained!","description":"What are altcoins, stablecoins, and wrapped coins in crypto?\n\nThere are multiple cryptocurrency asset types out there, on the market. All of these types have their own names, as well as some specific use cases where they can prove to be beneficial, or even essential. However, it\u2019s very simple to get lost among the different types of assets - it can be overwhelming! \n\nIn this video, I will tell you about some of the main types of cryptocurrencies that you\u2019ll likely encounter - altcoins, stablecoins, and wrapped coins. I will explain each of these types independently, and will also tell you about their main use cases, too.\n\nAre you a fan of altcoins? Perhaps you\u2019ve already transacted with wrapped coins before? Share your experiences, in the comment section below!\n\nVideo Time Table:\n\n0:00 Introduction to What are Stablecoins, Altcoins, and Wrapped Coins\n0:56 What are Altcoins?\n2:38 What are Stablecoins?\n4:42 What are Wrapped Coins?\n6:52 Where are Altcoins, Stablecoins, and Wrapped Coins Used?\n8:12 Wrap-Up: What are Stablecoins, Altcoins, and Wrapped Coins?\n\nMore Related Videos:\n\n? Is Cryptocurrency a Good Investment?\nhttps:\/\/www.youtube.com\/watch?v=cqVkgcEa5NI&t\n? How Does Cryptocurrency Work?\nhttps:\/\/www.youtube.com\/watch?v=rAtJ7Lw90KA&t\n? What is Cryptocurrency?\nhttps:\/\/www.youtube.com\/watch?v=eVLUrZtKhBk&t\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps:\/\/twitter.com\/crypto_xplained\n\n#WhatAreStablecoins #WhatAreAltcoins #WhatAreWrappedCoins","video_id":"WPBXOviUIls","duration":535,"view_count":761,"thumbnail_url":"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-are-stablecoins-altcoins-wrapped-coins-explained.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2022-09-15T14:22:49.000000Z","created_at":"2022-09-15T23:00:03.000000Z","updated_at":"2024-01-09T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}},"featured_image":{"id":3067,"uuid":"fc5f41bd-d735-45c4-9445-42b0b1113f6a","name":"what-are-stablecoins-featured-image.o.jpg","url":"https:\/\/assets.bitdegree.org\/crypto\/storage\/media\/what-are-stablecoins-featured-image.o.jpg","path":"crypto\/storage\/media\/what-are-stablecoins-featured-image.o.jpg","mime_type":"image\/jpeg","disk":"digitalOceanSpaces","size":121805,"width":768,"height":478,"custom_properties":null,"created_at":"2023-06-19T06:58:36.000000Z","updated_at":"2023-06-19T06:58:36.000000Z"}}"
:chapter-list="[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-blockchain.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/blockchain-101.jpg","rating":100,"sections":[{"chapter_id":1,"order":1,"slug":"what-is-blockchain","title":"What is the Blockchain?","status":"published","modified_content":null},{"chapter_id":1,"order":2,"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":3,"slug":"blockchain-transaction","title":"What is a Blockchain Transaction in Crypto?","status":"published","modified_content":null},{"chapter_id":1,"order":4,"slug":"crypto-fees","title":"The Different Types of Crypto Fees Explained","status":"published","modified_content":null},{"chapter_id":1,"order":5,"slug":"what-is-bridging-in-crypto","title":"The Key Notion Behind the Concept of Bridging in Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":6,"slug":"types-of-blockchains","title":"Different Types of Blockchains: What to Look Out For?","status":"published","modified_content":null}]},{"id":2,"title":"Cryptocurrencies","slug":"cryptocurrencies","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-cryptocurrencies.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/cryptocurrencies-101.jpg","rating":100,"sections":[{"chapter_id":2,"order":1,"slug":"what-is-a-cryptocurrency","title":"What is a Cryptocurrency?","status":"published","modified_content":null},{"chapter_id":2,"order":2,"slug":"how-does-cryptocurrency-work","title":"How Does Cryptocurrency Work?","status":"published","modified_content":null},{"chapter_id":2,"order":3,"slug":"is-cryptocurrency-a-good-investment","title":"Is Cryptocurrency a Good Investment? The Pros & Cons","status":"published","modified_content":null},{"chapter_id":2,"order":4,"slug":"coin-vs-token","title":"Coin VS Token: How Do They Differ?","status":"published","modified_content":null},{"chapter_id":2,"order":5,"slug":"what-are-stablecoins","title":"What are Stablecoins, Altcoins & Wrapped Coins?","status":"published","modified_content":null},{"chapter_id":2,"order":6,"slug":"what-is-a-bitcoin","title":"Bitcoin: the Pioneer of the Crypto World","status":"published","modified_content":null},{"chapter_id":2,"order":7,"slug":"what-is-ethereum","title":"The Ultimate Blockchain for dApp Creation: Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":8,"slug":"what-is-cardano-in-crypto","title":"What is Cardano and What is It Used For?","status":"published","modified_content":null},{"chapter_id":2,"order":9,"slug":"what-is-shiba-inu-coin","title":"Shiba Inu: the Dogecoin Killer","status":"published","modified_content":null},{"chapter_id":2,"order":10,"slug":"what-is-solana-in-crypto","title":"Is Solana an Improved Version of Ethereum?","status":"published","modified_content":null},{"chapter_id":2,"order":11,"slug":"what-is-polkadot-in-crypto","title":"The Bridge Between Blockchains: Polkadot","status":"published","modified_content":null},{"chapter_id":2,"order":12,"slug":"what-is-polygon-in-crypto","title":"Polygon: the Essential Scaling Solution for Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":13,"slug":"what-is-luna-crypto","title":"The Bumpy Road of Terra (LUNA)","status":"published","modified_content":null},{"chapter_id":2,"order":14,"slug":"what-is-fantom-crypto","title":"Is Fantom (FTM) Yet Another Ethereum Killer?","status":"published","modified_content":null},{"chapter_id":2,"order":15,"slug":"what-is-aave-crypto","title":"Aave: Crypto Lending Trailblazer","status":"published","modified_content":null},{"chapter_id":2,"order":16,"slug":"what-is-algorand-crypto","title":"Did Algorand Truly Solve the Blockchain Trilemma?","status":"published","modified_content":null},{"chapter_id":2,"order":17,"slug":"what-is-olympus-dao","title":"Does Olympus DAO Have Anything to Do With Mythology?","status":"published","modified_content":null},{"chapter_id":2,"order":18,"slug":"what-is-avax","title":"Is Avalanche Network (AVAX) Rightfully Called the Future of DeFi?","status":"published","modified_content":null},{"chapter_id":2,"order":19,"slug":"what-is-monero-coin","title":"Monero: Where Cryptocurrency Meets Cryptography","status":"published","modified_content":null},{"chapter_id":2,"order":20,"slug":"what-is-ripple-xrp","title":"Is Ripple \"it\" When it Comes to Cross-Border Transactions?","status":"published","modified_content":null},{"chapter_id":2,"order":21,"slug":"practical-use-of-cryptocurrencies","title":"The Practical Use of Crypto","status":"published","modified_content":null}]},{"id":3,"title":"Crypto Exchanges","slug":"crypto-exchanges","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-exchanges.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-exchanges-101.jpg","rating":80,"sections":[{"chapter_id":3,"order":1,"slug":"how-do-cryptocurrency-exchanges-work","title":"How do Cryptocurrency Exchanges Work?","status":"published","modified_content":null},{"chapter_id":3,"order":2,"slug":"dex-vs-cex","title":"DEX VS CEX: Two Sides of the Crypto Exchange Industry","status":"published","modified_content":null},{"chapter_id":3,"order":3,"slug":"crypto-day-trading","title":"Crypto Day Trading: The Difference Between Buying, Trading, and Swapping","status":"published","modified_content":null},{"chapter_id":3,"order":4,"slug":"kyc-crypto","title":"KYC & AML: The Key to Complying With Legal Industry Standards","status":"published","modified_content":null},{"chapter_id":3,"order":5,"slug":"how-to-buy-crypto","title":"From Fiat to Crypto: How to Buy Crypto for the First Time","status":"published","modified_content":null},{"chapter_id":3,"order":6,"slug":"fiat-to-crypto","title":"Taking Profits: Turning Crypto Into Fiat","status":"published","modified_content":null},{"chapter_id":3,"order":7,"slug":"how-to-use-crypto","title":"You\u2019ve Got Crypto: What Can You Do With It?","status":"published","modified_content":null}]},{"id":4,"title":"Crypto Wallets","slug":"crypto-wallets","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-wallets.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-wallets-101.jpg","rating":80,"sections":[{"chapter_id":4,"order":1,"slug":"what-is-a-crypto-wallet","title":"What is a Crypto Wallet?","status":"published","modified_content":null},{"chapter_id":4,"order":2,"slug":"hot-wallet-vs-cold-wallet","title":"Hot Wallet VS Cold Wallet: Which One to Pick?","status":"published","modified_content":null},{"chapter_id":4,"order":3,"slug":"non-custodial-wallet","title":"What are Non-Custodial Crypto Wallets?","status":"published","modified_content":null},{"chapter_id":4,"order":4,"slug":"what-is-metamask","title":"Metamask: The Leading Non-Custodial Wallet","status":"published","modified_content":null},{"chapter_id":4,"order":37,"slug":"how-safe-is-cryptocurrency","title":"The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?","status":"published","modified_content":null}]},{"id":5,"title":"NFTs","slug":"nfts","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-nfts.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/nfts-101.jpg","rating":100,"sections":[{"chapter_id":5,"order":2,"slug":"how-to-trade-nfts","title":"NFT Trading: The Ins and Outs","status":"published","modified_content":null},{"chapter_id":5,"order":3,"slug":"buying-nft","title":"Tips and Tricks of Choosing the Right NFTs","status":"published","modified_content":null},{"chapter_id":5,"order":4,"slug":"how-to-store-nft","title":"How to Store NFTs: Best Practices","status":"published","modified_content":null},{"chapter_id":5,"order":5,"slug":"how-to-create-an-nft","title":"How to Create Your Own NFTs?","status":"published","modified_content":null},{"chapter_id":5,"order":6,"slug":"how-to-make-passive-money-with-nft","title":"Making Passive Money with NFTs","status":"published","modified_content":null}]},{"id":6,"title":"dApps & Defi","slug":"dapps-and-defi","updated":true,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-dapps.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/dapps-defi-101.jpg","rating":80,"sections":[{"chapter_id":6,"order":1,"slug":"what-are-nfts","title":"What are Non-Fungible Tokens (NFTs)?","status":"published","modified_content":null},{"chapter_id":6,"order":1,"slug":"what-is-defi","title":"What is Decentralized Finance (DeFi)?","status":"published","modified_content":null},{"chapter_id":6,"order":2,"slug":"what-is-defi-2-0","title":"DeFi 2.0: The New Version of Decentralized Finance","status":"published","modified_content":null},{"chapter_id":6,"order":3,"slug":"what-are-dapps-in-crypto","title":"What Are dApps and How Do They Work?","status":"published","modified_content":null},{"chapter_id":6,"order":4,"slug":"defi-dapps","title":"Picking the Right dApps: Dos and Don'ts","status":"published","modified_content":null},{"chapter_id":6,"order":5,"slug":"what-is-web-3-0","title":"Web 3.0: The Future of the Internet","status":"published","modified_content":null},{"chapter_id":6,"order":6,"slug":"what-are-smart-contracts","title":"What is the Core Purpose of Smart Contracts?","status":"published","modified_content":null},{"chapter_id":6,"order":7,"slug":"what-is-a-dao-in-crypto","title":"The Notion of a Decentralized Autonomous Ogranization (DAO)","status":"published","modified_content":null},{"chapter_id":6,"order":8,"slug":"what-is-staking-in-crypto","title":"What is the Goal of Staking Crypto Assets?","status":"published","modified_content":null},{"chapter_id":6,"order":9,"slug":"what-is-liquidity-pool-in-crypto","title":"What is a Liquidity Pool and How Does It Work?","status":"published","modified_content":null},{"chapter_id":6,"order":10,"slug":"what-is-automated-market-maker","title":"Automated Market Maker: the Cornerstone of the Decentralized Crypto Exchange Industry","status":"published","modified_content":null},{"chapter_id":6,"order":11,"slug":"what-is-yield-farming-in-crypto","title":"The Main Yield Farming Techniques","status":"published","modified_content":null},{"chapter_id":6,"order":12,"slug":"what-is-an-oracle-in-crypto","title":"Crypto Oracles: The Link Between Blockchain and Outside World Data","status":"published","modified_content":null},{"chapter_id":6,"order":13,"slug":"crypto-gambling","title":"The Peculiarities of Decentralized Crypto Gambling","status":"published","modified_content":null},{"chapter_id":6,"order":14,"slug":"what-is-the-metaverse","title":"Metaverse: A New Perception of Reality","status":"published","modified_content":null}]},{"id":7,"title":"Trading & Investing","slug":"trading-and-investing","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-trading.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-trading-101.jpg","rating":80,"sections":[{"chapter_id":7,"order":1,"slug":"where-to-trade-crypto","title":"Where Can You Trade Cryptocurrencies?","status":"published","modified_content":null},{"chapter_id":7,"order":2,"slug":"how-to-invest-in-crypto","title":"Investing in Crypto: What Investing Options Do You Have?","status":"published","modified_content":null},{"chapter_id":7,"order":3,"slug":"ico-vs-ido","title":"ICO vs IDO vs IEO: Which One is the One?","status":"published","modified_content":null},{"chapter_id":7,"order":4,"slug":"what-is-an-airdrop","title":"What are Crypto Airdrops and How to Get Them?","status":"published","modified_content":null},{"chapter_id":7,"order":5,"slug":"how-to-get-free-crypto","title":"How to Get Free Crypto Assets?","status":"published","modified_content":null},{"chapter_id":7,"order":6,"slug":"how-to-arbitrage-crypto","title":"What is Crypto Arbitrage: The Main Principles","status":"published","modified_content":null},{"chapter_id":7,"order":7,"slug":"what-is-a-perpetual-contract","title":"Perpetual Contracts: Futures Contracts Without an Expiration Date","status":"published","modified_content":null},{"chapter_id":7,"order":8,"slug":"what-is-fud","title":"What is FUD: How to Use It to Your Advantage While Investing in Crypto?","status":"published","modified_content":null},{"chapter_id":7,"order":9,"slug":"investing-in-cryptocurrency","title":"Investing in Cryptocurrency: How to Manage Your Risks?","status":"published","modified_content":null},{"chapter_id":7,"order":10,"slug":"what-is-a-rug-pull-in-crypto","title":"What is a Rug Pull in Crypto?","status":"published","modified_content":null},{"chapter_id":7,"order":11,"slug":"how-to-avoid-rug-pulls-in-crypto","title":"How to Spot and Avoid Rug Pulls?","status":"published","modified_content":null},{"chapter_id":7,"order":12,"slug":"how-to-avoid-crypto-taxes","title":"The Key Legal Techniques of Avoiding Crypto Taxes","status":"published","modified_content":null}]},{"id":8,"title":"Crypto Analysis","slug":"crypto-analysis","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-analysis.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-analysis-101.jpg","rating":100,"sections":[{"chapter_id":8,"order":1,"slug":"what-is-bullish-and-bearish","title":"Bearish and Bullish Markets: Do They Matter?","status":"published","modified_content":null},{"chapter_id":8,"order":2,"slug":"best-technical-analysis-indicators-for-crypto","title":"5 Best Crypto Technical Analysis Indicators You Must Know About","status":"published","modified_content":null},{"chapter_id":8,"order":3,"slug":"what-is-candlesticks","title":"Technical Analysis: What are Candlesticks, Trendlines, and Patterns?","status":"published","modified_content":null},{"chapter_id":8,"order":4,"slug":"how-to-track-new-crypto-coins","title":"Crypto Tracking: How to Track Your Favorite Coins & Tokens?","status":"published","modified_content":null},{"chapter_id":8,"order":5,"slug":"how-to-research-crypto","title":"Crypto Research Fundamentals & Social Signals: Your Daily Trading Strategy","status":"published","modified_content":null},{"chapter_id":8,"order":46,"slug":"portfolio-diversification-definition","title":"Portfolio Diversification: The Whats, the Whys, and the Hows","status":"published","modified_content":null}]},{"id":9,"title":"Mining","slug":"mining","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-mining.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-mining-101.jpg","rating":80,"sections":[{"chapter_id":9,"order":1,"slug":"what-is-crypto-mining","title":"Crypto Mining: What It is and How Does It Work?","status":"published","modified_content":null},{"chapter_id":9,"order":2,"slug":"what-is-a-mining-pool","title":"Mining Pools: Is Collective Mining Better Than Solo Mining?","status":"published","modified_content":null},{"chapter_id":9,"order":3,"slug":"what-is-staking-crypto","title":"An Advanced Look into What is Staking Crypto","status":"published","modified_content":null},{"chapter_id":9,"order":4,"slug":"what-is-proof-of-stake-vs-proof-of-work","title":"Proof-of-Work VS Proof-of-Stake: The Differences That Matter","status":"published","modified_content":null},{"chapter_id":9,"order":5,"slug":"what-is-crypto-mining-rig","title":"Crypto Mining Rig: What It is and How to Build One?","status":"published","modified_content":null}]},{"id":10,"title":"Crypto Terms","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/crypto-101-glossary.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-glossary-101.jpg","rating":100,"sections":["A","B","C","D","E","F","G","H","I","J","K","L","M","N","O","P","Q","R","S","T","U","V","W","X","Y","Z"]}]"
current-chapter="cryptocurrencies"
current-section="what-are-stablecoins">