Foundations · Level 2

Coins, tokens and stablecoins

The four buckets every coin falls into, and why stablecoins are the most useful one locally.

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Bitcoin, Ether and the Rest

1 min

There are thousands of coins, but almost everything a normal user needs falls into four buckets. Learn the buckets and the noise gets much quieter.

Type	Example	What it is for
Store of value	Bitcoin (BTC)	Scarce digital asset, fixed supply of 21 million
Smart-contract platform	Ether (ETH)	Fuel for applications built on a programmable network
Stablecoin	USDT, USDC	A token pegged to one US dollar, used for payments and savings
Everything else	Thousands of tokens	Mostly speculative, most eventually go to zero

A practical rule: if you cannot explain in one sentence what a token does and who pays for it, you are not investing, you are guessing.

Stablecoins Explained

1 min

Figure — a stablecoin is designed to stay pegged to one US dollar

A stablecoin is a token designed to always be worth about one US dollar. The largest ones, USDT and USDC, are backed by real dollars and short-term government debt held by the issuer. When you send someone 500 USDT, they receive something that behaves like 500 dollars, and it arrives in minutes.

For people in Namibia this is often the most useful part of crypto. It is a way to hold dollars, pay a supplier abroad or receive money from family without waiting on a correspondent bank.

Peg risk is real but small for the big two. A stablecoin can briefly trade at 0.98 or 1.01 during market stress.

Issuer risk matters. Stick to the large, audited issuers and skip anything promising interest on a stablecoin you have never heard of.

Network still matters. The same USDT exists on several networks and they are not interchangeable during a transfer.

End-of-level test

Answer all 3 questions. Score 67% or more to pass this level.

1. Bitcoin's maximum supply is…

2. A stablecoin is designed to be worth…

3. Ether is mainly used as…