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A glossary of Bitcoin and cryptocurrency terms you need to know
Illustration: Benoît Tessier (Reuters)
Tokens, cryptocurrencies and digital assets are often used interchangeably but are different from each other.
Digital Assets is a broader term that refers to assets that exist in digital form and can be stored, transferred, and managed electronically. Examples include cryptocurrencies, tokens, and NFTs (non-fungible tokens).
Cryptocurrency is a digital asset that relies on cryptography to facilitate secure financial transactions. It is decentralized and operates on a distributed ledger technology called blockchain. Bitcoin is an example of a cryptocurrency.
All cryptocurrencies are digital assets, but not all digital assets are cryptocurrencies.
The token, however, is created on an existing blockchain network. For example, Shiba Inu, a popular meme-based coin, was created on the Ethereum blockchain network. It does not have its own network.
This means that a blockchain network can support multiple tokens. Ethereum, for example, is the basis for several tokens.