Are there distinctions between tokens, coins, and cryptocurrencies? It seems people use these terms interchangeably.
Samson Williams replied:
In theory, yes. In practicallity, no.
Token (is suppose) to work like a token from Chuck E Cheese, the laundry mat or a video aracde. But since there are no "arcades" built where people can presently use these so called tokens, tokens are functionally securities. Why? Cause you're giving someone money for the purpose of building their "arcade". There is a scheme under Rewards/Donation based RegCF that this can be done. Alas, no one wants to follow those guidelines. It'd make too much sense and your customers/investors would have recourse should you not deliver the good/product/service. Which is why ~98% of ICOs (Initial Coin Offerings) / ITOs (Initial Token Offerings) will fail. Lotta fraud, combined with the general challenges of creating viable solutions using a novel technology, aka #blockchain.
Coins - See above.
Cryptocurrencies - in theory suppose to be used as a currency. In my opinion Litecoin comes closet to this. We can debate that til the cows come home. But in general the question is, do we need 3k different currencies? Already for fiat currencies we have roughly 180 and most are garbage. Feel free to pay me in Kuwaitee or Bahrainee dinar anytime.
But in general, there is a lot of education that still needs to be done. For the moment, as folks talk about cryptos/coins/tokens just roll with it. The only time you really need to call them out is when they confuse cryptocurrencies with #digitalcurrencies. They're completely two different things.
How do I know whats a cryptocurrency v a digital currency?
Does your "currency" have an administrator/central issuing body? Then its a digital currency. If it doesn't have an adminstrator/central issuing body its a cryptocurrency, a la #bitcoin.
Oscar Jofre replied:
Great post Samson, but the distinction is very clear
Crypto/Coin/Crypto Currency is a CURRENCY, currency is very different. Has different regulators, and exchanges. For those that combine these terms need to understand the differences
Token- is issued from the company, and yes first phase was an Utility element, but as we all know if it trades or gains in value It is a SECURITY TOKEN
a Security Token represents an equity position in the company. Investor has some stake in the company, will also have rights and other elements. For investors to purchase security tokens, they must qualify and also the company must make sure it is using the right exemption in the right country. The exchanges for trading Security Tokens are NOT the same as currency.
Can you use Crypto to purchase Security Tokens, the answer is yes. Crypto is a currency and if the company wishes to accept this form or currency for investment its their choice.
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