What are tokens, and how to make money from them

Getting started with cryptocurrency can be a complicated process. Newcomers have certainly heard of Bitcoin, but what about the thousands of other coins and blockchain projects that are in the industry? Let's get a brief understanding!

Coins and tokens: the difference

To get a proper understanding of the market, cryptocurrencies are usually divided into two categories: coins and tokens. We use the common word "cryptocurrencies" to refer to all of these digital assets, but there is still a difference between the two. Let's explore this question.

If we talk about coins and tokens, the main difference between them is the way they are created. Cryptocurrency tokens are built on an existing blockchain (e.g., Ethereum). Meanwhile, the coin functions on its own independent blockchain. That is, it is the blockchain that confirms all transactions, it is the blockchain that ensures reliability, and it is the blockchain that gives value to the currency.

That is, a coin is, you might say, the absolute base of this or that blockchain. A token is an addition to this base.

Sometimes a token is eventually transformed into a standalone coin. When this happens, the developer of the token launches a new blockchain. But until then, the token functions are based on an existing system.

How to use tokens?

The primary uses of the crypto tokens are as follows:

• Security tokens are equivalent to an equity interest in an IT project. If you trust the company that issued them, a token can be a good and inexpensive investment that can pay off dozens of times over. It's like buying shares in a fund - only you can invest any amount, even the most modest. When the project enters the exchange and begins to sell its tokens, they can be easily traded for cryptocurrency: e.g., Bitcoin or USDT.

• Tokens act as a bounty for some services to the startup, for instance, for helping to attract investors by advertising the project, etc. Later you can also sell them on the cryptocurrency exchange.

• Utility tokens perform the role of internal currency in the system. With their help, you can buy project’ services and products. For example, in the case of crypto-games, tokens allow you to expand the game's functionality and buy playing attributes.

• Governance token is a digital tool that entitles its owner to participate in developing a blockchain project. This way of project management is more transparent and fair than the traditional one. Governance tokens give their holders a voice and the ability to put forward their own initiatives in project development. They have found wide applications in decentralized autonomous organizations (DAO) and decentralized finance (DeFi).

How to buy and store tokens?

In most cases, you can acquire tokens through various crypto exchanges. In addition, sometimes you can buy them directly when using a particular IT service. Buying tokens is very similar to the process of acquiring and trading cryptocurrencies and is very often available through familiar crypto wallets.

Storing tokens is also no different from storing cryptocurrencies. As a rule, the creator of a token releases its own wallet application, where you can store your virtual asset.

Think2Earn with Inite!

With Inite app, you can earn tokens for such simple but practical actions as writing down your ideas. There are two things you need to do:

• Activate in-game meditation mode for 5-20 minutes. Use this time for meditating, observing the mind or thinking about any issue. It is important to be quiet and not to hold the phone.

• Write down all the ideas that came to your head during the practice. It can be an insight as well as plans for the future, words of gratitude, and so on. For each entry, you will receive Idea tokens, which you can use within the game or on the crypto exchange.

The app also awards Init tokens for continued participation in the project. Init is a governance token that allows you to impact the project's development and create your own DAOs. In the foreseeable future, the Init tokens can also be traded on the cryptocurrency exchange.