The difference between coins and tokens
Cryptocurrencies such as bitcoin and ethereum are coins. They’re coins, because bitcoin is connected to bitcoin’s blockchain, and ethereum is connected to ethereum’s blockchain.
Polygon is a token, because it’s connected to ethereum’s blockchain. Polygon doesn’t have its own blockchain to build on, but instead it uses an existing blockchain - here, ethereum’s. That’s the primary difference between coins and tokens.
On top of that, polygon is unique because it wasn’t developed to be a payment method, like bitcoin was. Instead, it was developed to “activate” certain features in a blockchain - such as smart contracts.
Imagine a good old-fashioned laundromat, where you need to buy tokens to use the machines. Here, you’re exchanging your Danish kroner to laundromat-tokens, and the only feature the tokens have is activating washing machines and dryers in the laundromat.
That’s kind of how polygon tokens work. Instead of a laundromat, it’s a blockchain. Instead of laundromat tokens it’s polygon tokens. And instead of activating washing machines and dryers, it’s activating features such as smart contracts and NFTs.
But it’s also possible to exchange the laundromat tokens back to regular money - and the same goes for polygon tokens. For instance, you can exchange your polygons and all other cryptocurrencies to your account to regular money directly from your app with Lunar Block.
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