Andrea Alms Video:  Money In Motion 136 - What Is It..."Crypto" Part 3 Terminology

Hello, my name is Andrea Alms. I'm a technology investor and financial manager and this is your money in motion. Welcome to our series on crypto currencies or crypto as a review from last time. Crypto is a digital currency using cryptography to enable secure transactions without a central bank or government. Just from last time, here are some key cash characteristics no central authority and so on.

Bottom line no guardrails and risky on the last episode, we introduced this organizational chart of the crypto ecosystem. There is much confusion on terms and definitions. Today we focus on terminology recap. What is a crypto coin? A cryptocurrency coin is native to a blockchain, meaning it operates on its own network and has its own independent ledger. There is only one coin per blockchain network.

What is a crypto token? It is a software technology and software application overlaying the crypto coins. This crypto token can overlay on an infinite number of coins per blockchain. Tokens do not have their own blockchain tokens run on another blockchain. The purpose of a token is to allow users to vote on changes, interact with a decentralized application. Here we compare coins and tokens.

A coin number one. It is a native to a blockchain. Yes, it is techno speak, but all it means is that this coin and this particular blockchain are directly related, like a son or daughters directly related to a mom, as opposed to your cousin being related to your mom. Yes, super basic explanation, but you will remember it. Two there is only one coin per blockchain.

Three coins use consensus mechanism to be validated, meaning everyone's got to agree what this coin is versus or opposed to a token. Number one tokens are software applications built upon a coin's software application. Two there are innumerable tokens per blockchain network. Three A token relies on the native coin's consensus, meaning that a coin relies on what everyone else says.

It is a kind of blind trust. Therefore, you trust the word of another, but you do not verify the facts yourself. Thank you. This is your money. Your money, in motion.