Crypto Investing — Intermediate: Coins, Tokens & Stablecoins

A coin is native to its own blockchain (BTC, ETH). A token is created on top of an existing chain via a smart contract (e.g., ERC-20 tokens on Ethereum).

Stablecoins aim to hold a steady value, usually pegged to the US dollar. They come in flavors: fiat-backed (reserves of cash/bonds), crypto-collateralized (over-collateralized by other crypto), and algorithmic (which have historically been the riskiest and have failed before). Stablecoins are widely used for trading, payments, and as a 'home base' between positions.

Key takeaways

• Coins are native; tokens are smart-contract assets on a host chain.
• Stablecoins target a peg; the backing model determines the risk.
• Algorithmic stablecoins carry distinct, historically severe failure risk.

Educational disclaimer: This material is provided by Nieto Engineering Inc. for internal education only. It is not investment, financial, legal, or tax advice and is not a recommendation to buy, sell, or hold any asset. Cryptocurrency, equities, and prediction markets carry substantial risk, including total loss of capital. Past performance does not indicate future results. Always do your own research and consult a licensed professional before investing.