Coins vs Tokens: what is the Difference

Coin vs Token: what is the difference?

Digital coins are unique digital currencies that are based on their own standalone blockchains. In other words, a digital coin is an asset that is native to its own blockchain.

Tokens are unlike coins in that they are created on top of existing blockchains. For example, the Ethereum platform remains one of the most common platforms for creating crypto tokens, and tokens built on Ethereum are known as ERC-20 tokens.

Coins are just method of payment while tokens may present a company’s share, give access to product or service and perform many other functions. Coins are currencies that can be used for buying and selling things. You can buy a token with a coin, but not directly vice versa. Coins operate independently, while a token has a specific use in the project’s ecosystem.

What is better, a coin or a token?

Is Bitcoin a token or coin?

BTC is, as the name suggests, a coin. In the cryptospace Bitcoin is primarily used as money. There are more examples of coins like Dogecoin and Litecoin. Of course they have major differences, but they also share one characteristic: they are used as money and/or a store of value.

Is Ethereum a token or coin?

More information: purpose, creation and types of crypto tokens

More in-depth information is out-of-scope for this intructionary article about coins vs tokens.

You can click here to learn more about Non-Fungible Tokens (NFTs)

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