If you are new to the world of cryptocurrencies, here is an article where I explain what Tokens and NFTs are. What are they and how do they differ from Cryptos?

1. Cryptocurrencies: The foundation of the digital ecosystem

Cryptocurrencies are digital assets native to a blockchain. They do not depend on any external platform because they are a fundamental part of the network.

Main characteristics:

They function as a medium of exchange, store of value, or unit of account.

Examples: Bitcoin ($BTC ) on the Bitcoin network, Ether ($ETH ) on Ethereum, #BNB on Binance Smart Chain.

They are often decentralized, without control from banks or governments.

They have their own blockchain.

Advantages:

High security thanks to cryptography.

Allow global transactions without intermediaries.

In some cases, protection against inflation (like Bitcoin).

Disadvantages:

Price volatility.

Possible scalability limitations.

Risk of loss if private keys are not properly secured.

2. Tokens: Digital assets created on an existing blockchain

Unlike cryptocurrencies, tokens do not have their own blockchain; they are built on an already existing one (for example, ERC-20 tokens on Ethereum or BEP-20 on Binance Smart Chain).

Types of tokens:

Utility Tokens: provide access to services or products (e.g., BNB in its early days).

Security Tokens: represent financial assets or investment.

Stablecoins: tokens backed by stable assets like the dollar (USDT, USDC).

Governance Tokens: allow voting on decisions of a DAO.

How are they generated?

Through smart contracts on a blockchain.

Companies and projects can create tokens without having to develop a new network.

Advantages:

Easier and cheaper to create than a proprietary cryptocurrency.

Wide variety of uses (payments, governance, rewards, etc.).

Facilitate innovation in blockchain.

Disadvantages:

Dependence on the blockchain they are based on.

Some tokens lack real value or backing.

Risk of scams in unregulated projects.

3. NFTs (Non-Fungible Tokens): Unique digital assets

NFTs are a special type of token that represents unique digital ownership. While cryptocurrencies and tokens are fungible (each unit is equal to another), NFTs are unique.

Main uses:

Digital art and collectibles.

Music, video games, and metaverses.

Certification of ownership (tickets, documents, etc.).

How are they created?

Through a process called 'minting' on a blockchain compatible with NFTs, such as Ethereum (ERC-721) or Binance Smart Chain (BEP-721).

Advantages:

Guarantee authenticity and scarcity.

Allow creators to monetize their content directly.

Applications beyond art: digital identity, contracts, licenses.

Disadvantages:

Highly speculative market.

Dependence on platforms and standards.

Environmental impact (in blockchains with proof of work).

Main differences between cryptocurrencies, tokens, and NFTs:

CharacteristicCryptocurrenciesTokensNFTsOwn blockchainYesNoNoFungibilityFungibleFungibleNon-fungibleMain functionDigital moneyVarious usesUnique digital ownershipExamplesBTC, ETH, BNBUSDT, AAVEBored Ape, CryptoPunks

Conclusion

Cryptocurrencies: the base of the ecosystem and a medium of exchange.

Tokens: digital assets with multiple applications on an existing blockchain.

NFTs: represent unique digital ownership and open new possibilities in art, games, and more.

All these assets share the same foundation: blockchain, but their utility and value depend on the project, adoption, and market trust.

Crypto simplified for everyone.

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⚠️ Important notice ⚠

This content is for educational and informational purposes only.

💡 Does not represent financial advice.

Remember that investing in cryptocurrencies involves high risks and high volatility. 📊

Before making decisions, consult a financial professional. 🧾

Do your own research and protect your capital.🪙