let's assume you're trying a new way to
get around well the manner that i see it you may either purchase your personal car and need to manipulate that automobile like keep it updated alternate the oil replace the tires all that stuff it's usual responsibility to preserve that vehicle because it's miles yours well the opportunity is that
you may hire a car this indicates you can
borrow a car for a monthly fee and if so you could use it for something functions you would possibly need you just pay the owner the hire for the usage of that vehicle and then you definitely don't have to
worry approximately any of the troubles relying on the different factors on your existence you would ought to pick out the only that satisfactory suits your desires and which one become wiser to go with for instance you may no longer have a gaggle of cash to buy a new car outright or perhaps you were simply super
busy and also you do not want to take care of
the preservation nicely if you think of this analogy it is quite a great deal the same as the variations
among a coin and a token a coin uses its very own blockchain to maintain track of all the statistics which in our car analogy would be proudly owning the auto on the subject of a token although you are using a person else's coins blockchain as your infrastructure while you essentially pay lease when you create a token you do not must create the blockchain write the whole code and fear approximately how it ought to be established as a substitute you simply create the token and it runs on that blockchain the fine example for this video could be ethereum
ethereum is its own blockchain that each stores cost and validates transactions ethereum's group has been running very difficult the beyond few years on enhancing the entire system updating how it works and patching
vulnerabilities an ethereum token or an
erc20 token
makes use of ethereum's blockchain's talents as its spine and infrastructure as an example basic interest token is an erc20 token constructed on the ethereum community now the group decided it became no longer big sufficient to create their very own mainframe but they desired to create a system wherein customers
may want to praise the creators that they comply with in a easy manner without going too deep into it the primary interest token crew can cognizance on providing a fantastic product that is the courageous browser
and also you want to praise our tough work in any case via growing a token the brave crew should depend upon ethereum's community to offer protection and balance while they centered on their very own product
additionally you must recognise that a crew of developers can migrate from a token to a coin in the event that they decide that their project is growing brief sufficient if we think about crypto.com they recently just released their very own mainnet which is a elaborate way of pronouncing they launched their own coin now which is now validating their personal transactions see they used to have a token however it were given so famous that they decided to create their personal blockchain and branch off so right here's an critical element you cannot
convert a token straight into a coin you can create a coin that capabilities the identical way after which create a bridge with a purpose to permit users to change out their previous tokens for the brand new cash
in some cases a few coins like leo are tokens on multiple networks as an instance leo is at the ethereum network the binance clever chain network and the hive community every other critical issue to recognize is that a few coins are represented as tokens on other networks as an example a few days in the past i bought something referred to as binance peg ethereum token on the binance smart chain i did now not certainly purchase ethereum however alternatively i bought a illustration of ethereum at the binance clever chain community that mimics the fee of
ethereum you is probably questioning why did this properly a ordinary ethereum transaction is around 20
proper now but a transaction on the binance smart chainis most effective 50 cents so it is tons extra less costly to trade a illustration of ethereum at the binance smart chain community you could sort of consider it like in case you buy a stock of gold youown the inventory but all it does isrepresent the gold at any time you can cash out that inventory for a piece of gold so it is basically gold at least for trading functions i am hoping that this isn't too difficult so while that may be a easy version of it there are
some distinct types of tokens that we can use to categorize the reason of every token let me move over a pair examples right here and perhaps you may get the grasp of it if you have not already so primary platform tokens platform tokens are created to help a decentralized
application at the blockchain as an instance uni swap is a decentralized software that allows customers to switch out ethereum tokens for other ethereum tokens and even though they're
a decentralized app in addition they have their personal token the uniswap token this token is given out to hose who spend money on their platform and it has the promise that ultimately token holders can vote
on modifications within the destiny and perhaps even earn some of the earnings from the trades next up we have range which is safety tokenssecurity tokens are minted to represent ownership of some other asset for example say you desired to shop for gold but you didn't in reality need to preserve the gold
a person could create a token that is tracked to the charge of gold so as an alternative of actually proudly owning the gold you owned a illustration of it which technically could be a great deal more secure due to the fact it is tons
greater tough to hack an ethereum token than it's far to interrupt into someone's house now the intricate component here is that there ought to be a real asset at the back of it as an example i may want to create a gold token ask you to
put money into it and now not have any gold subsequent up we have quantity three which might be transactional
tokens
transactional tokens are used as a fast and clean way to transfer cash if we think about the coin x die it's miles presently pegged to the united statesdollar and it is clean for human beings to payfor say perhaps coffee or buying that blouse you want at that local store you could use it the same as coins however the costs of it are
super low
right now the transaction price is .00002 u.s.a. greenbacks and this is ridiculously low to give you an idea of the way reasonably-priced that charge is you can make over 47 000 transactions and only pay
one dollar in costs for all of them attempt doing that on paypal or through a financial institution twine range 4 is software tokens so application tokens are tokens which have a value tied to their possession as an instance primary interest token is an ethereum token that may be used to market it on the brave browser in different words if i desired to put it on the market this youtube channel at the brave net browser i ought to accomplish that very easily with my basic attention token in different words software tokens can virtually do some thing protection tokens don't do something you simply buy them and maintain them but autility token can actually be used for a
industrial cause lastly we've wide variety 5 which is governance tokens governance tokens allow token holders to vote on certain
things as an example uni swap will be a governance token in a destiny model of the uni switch trade token holders ought to select to vote toraise the rate of a uniswap exchange from zero.3 percentage to zero.6 and everyone with a token might be allowed to vote on that exchange the selection with the most votes chooses the winner so that you surely have greater vote casting power by using holding greater tokens
glaringly there may be a pretty excellent purpose to keep extra tokens with the aid of keeping more you can virtually manage the platform more however this comes up with the hassle of the authority being centralized however
we'll save that for some other video now that we've got went over the distinct styles of tokens hopefully you apprehend why we need them and the way some of themwork in case you've enjoyed this video we
rather recommend sorting out some of our other films which might be created in a comparable animated way thank you men so much for looking we hope which you discovered some thing
and we do hope to see you within the subsequent
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