Why is knowing crypto types essential ?

Essential reasons to know the difference

Factor	Reason
Risk Management	Allows you to treat high-risk assets (like Memecoins) very differently from low-risk assets (like Stablecoins) to protect your capital.
Strategy	Helps you know if you are investing in a core currency (a Coin) or a product’s platform share (a Token) for appropriate expectations.
Volatility	Enables you to use Stablecoins as a secure hedge to avoid large losses during sharp market downturns.

1. Coins: The Digital Currencies

• Definition: The native asset of its own independent blockchain (e.g., Bitcoin).

• Differentiation: They are the core money that powers their entire chain, acting as a foundation and secure store of value.

2. Stablecoins: The Stability Bridge

• Definition: A token designed to track the value of a fiat currency (e.g. $1 \approx 1$ Stablecoin).

• Differentiation: Lack of volatility. They are stable, non-speculative, and used by traders as a digital substitute for holding cash.

3. Altcoins and Tokens: The Innovators

• Altcoin: Any cryptocurrency that is not Bitcoin.

• Utility Tokens: Differentiated by a specific function, granting access to a service or feature on a decentralized app (Medium Risk).

• Memecoins: Driven by jokes or trends with no inherent value.Highest Risk due to pure speculation.