Crypto news

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Crypto tokens, also known as altcoins, are essentially digital assets that exist on top of a blockchain and can be transacted much like any other cryptocurrency. Unlike crypto coins like Bitcoin, tokens cannot be mined since they don't have their own blockchain. They rely solely on smart contracts, so they have to operate on smart contract based blockchains like Ethereum or NEO. There are thousands of crypto tokens currently in existence, and new ones continue to emerge as developers come up with innovative ideas for different platforms and use cases.

The characteristic that separates cryptocurrencies from tokens is that cryptocurrencies are the native asset of a blockchain like BTC or ETH. In contrast, tokens are built on an existing blockchain by setting certain rules and encoding them on smart contracts. The most common standard for tokens is the ERC-20; when someone transfers tokens their account signs a transaction telling a smart contract to debit an amount from one account and credit the units of tokens to another account. All the computing energy necessary to make these transactions needs to be paid, these computing fees are called gas money.

There are different categories of tokens that depend on their functionality and characteristics. Below we share a brief description of the most popular tokens today:

The acronym NFT stands for Non Fungible Token. This basically means that the ownership of these tokens is attributed to only one person or entity much like a collectible. The value of  NFT could be artistic or real estate. They are one of a kind pieces of electronic art that can be

They function as coins. They are used for exchange, store value, and making payments.

They are assets used to buy ownership rights of a physical or digital asset that has been verified within the blockchain.

They are used to fund projects of startups. Users that purchase these tokens gain certain rights, like access to services or products produced by the organization. Example: Basic Attention Token (BAT) is the unit of value given to users that choose to view ads within the BAT platform.

They are assets that have the same value as their mother underlying asset but operate on the Ethereum blockchain. Example: Wrapped BTC, holds the exact same value as Bitcoin but interacts in the Ethereum Blockchain allowing BTC holders to use Ethereum’s DeFi apps.

There is a fair amount of speculation and hype when it comes to altcoins, but they still represent a small percentage of overall global assets. Therefore, these digital assets should not be considered mainstream investments yet. Although a qualified investor could make a decent return on them if they can predict which altcoin will rise or fall in value quickly, it could be tricky to invest large amounts into them – unless you really know what you are doing. Considering the freshness of altcoins and the fact that new tokens keep being launched every day, newbie investors should be mindful of the volatility of some altcoin markets and carefully take their first steps in this world. If you are interested in altcoins and are thinking about potentially investing, we recommend educating yourself on exchange apps, token swapping, and DeFi apps before exchanging. Once you see for yourself how the markets behave and find the most suitable app, you’ll gradually gain confidence and find your way through the altcoin market.

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What Are Crypto Tokens?

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There are currently hundreds of tokens that you can buy and sell on DEXs (Decentralized Exchanges), but not all of them, especially the less popular ones, are supported by all DEXs. That’s where the concept of token swaps comes in. Before, users had to exchange their money to some mainstream crypto and then again for their desired altcoin since most tokens weren’t supported by their DEXs. Now, users can exchange tokens directly without spending extra fees for unnecessary exchanges. However, token swaps are still relatively new, and figuring out how to use them properly can be confusing even for experienced cryptocurrency users, let alone beginners who are just getting into this space.

The expression "Token Swap" can have two different meanings. The first refers to token exchanges or token migrations, which is basically moving projects or platforms from one blockchain to another while modifying the swapping conditions for each coin. The second meaning of Token Swap is exchanging one token for another directly without resorting to exchange first to a fiat currency or main crypto and then to the intended token.

Although it may seem daunting, token swaps are actually pretty simple. At its core, a token swap is really just an exchange of one cryptocurrency for another on a blockchain. So, if you hold an ERC20 token (i.e., Ethereum-based tokens) and would like to receive another type of crypto asset in its place, you can simply swap your old ERC20 tokens for new ones on a platform like 

 without leaving your wallet. Reducing the number of exchanges for swapping is not only faster but it better protects your personal data and it drastically reduces the amount of gas money (fees for computing energy required to process transactions) the users need to get to their target token.

What to Look for in Crypto Swapping Service

The future of token swapping is bright and there’s a lot of activity around these services—but that doesn’t mean it’s easy to understand how they behave in the market, how to trade them, and whether they’re right for you. There are a few basic facts to consider in your own research before choosing an asset swapping service:

Security Features: evaluate the encryption method the service uses to secure the user's data. Some swapping services are non-custodial, which means each user is the sole controller of their private keys and not the site.

Assets Supported: it is important to make sure that you are going to be able to trade the assets you choose and not only mainstream tokens. Before downloading, make sure the service supports the tokens you are seeking.

Limits and liquidity: check the ceiling for withdrawals and deposits.

Service fees and gas price: look for the service that searches for the quotes that will cost you the least amount of gas money with the lowest service fee possible.

Customer Support: having someone help you when you are having trouble with a transaction is paramount, so evaluate the support team’s response time before going for an app.

Understanding a token swap is relatively simple. For one, you are exchanging one coin for another. But the process of swapping can be overwhelming for newcomers. Thankfully, current token swap services are becoming easier to use every day, building a bridge between the native crypto and the altcoin markets. Users only need to be sure of what they seek from the altcoin market and look for the apps that better suit their purpose.

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A Beginner's Guide to Token Swaps

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