Cryptocurrency

Cryptocurrency is a term that generally means fungible digital assets that can be exchanged through a blockchain network. Cryptocurrencies can be thought of as digital coins.

If you toss a physical coin in a bag with 25 others of the same value, you probably won't be able to pick out the original. It shouldn't matter - each coin has the same value. Physical coins are issued by a central organization and limited in quantity produced.

Cryptocurrencies are similar in a few ways. Any one token (digital coin) can be exchanged for any other, as they all hold the same value. Cryptocurrencies are also usually limited in quantity and are issued on a blockchain network.

The similarities depart there. There are a few different kinds of cryptocurrency that exist across multiple blockchain networks. Two of the most well known cryptocurrencies are Ether (ETH) on the Ethereum network, and Bitcoins (BTC) on the Bitcoin network.

What is Cryptocurrency used for?

That depends on the cryptocurrency in question.

It's important to be careful when navigating the world of blockchain - all transactions are final. Do your research on each particular coin before purchasing.

There are two distinct types of cryptocurrency: those built on their own blockchain network and ERC-20 tokens on the Ethereum network.

Cryptocurrencies built on their own blockchain network typically have an intended purpose that is unrelated to how much value they hold. For example, each transaction on the Ethereum network costs an amount of ETH relative to the complexity of the transaction. Similarly, each transaction on the Bitcoin network costs an amount of BTC.

Cryptocurrencies that are ERC-20 tokens exist on the Ethereum blockchain network. Use-cases for these are varied. Governance tokens are one example, where each 'coin' counts as a vote within a community. Another example is specialized services that use the token in question.

GODS is an ERC-20 token that is an example of the latter. Within the Gods Unchained digital trading card game, GODS is used to 'forge' two cards into a single card of the next rarity. Gods Unchained exists on something called ImmutableX, a L2 blockchain network that is built on top of Ethereum.

ERC-20 tokens are often bought and sold solely as a speculative investment. They can be created by anyone with relative anonymity and should be examined carefully prior to purchase.