The booming cryptocurrency market led to thousands of coins and tokens being born and continuously updated.
Many people do not understand what is a coin and what is a token.
Check out a quick summary of the differences between coins and tokens in the crypto space via the infographic below.
What is coin?
A cryptocurrency or digital cash that is independent of any other blockchain or platform. The key feature of a coin is that of a currency, and the term may also be used to describe a cryptocurrency asset that is not a token.Source: academy.binance.com
In other word, a coin is a digital currency similar to physical currency. Coin refer to cryptocurrency built on its independent blockchain network.
What is token
Crypto tokens are a type of cryptocurrency that represents an asset or specific use and resides on their blockchain. Tokens can be used for investment purposes, to store value, or to make purchases.Source: Investopedia
In other word, token refer to cryptocurrency that don’t have a blockchain network of its own.
The core differences
Summary, the core differences:
- Coins & Tokens both reffer to cryptocurrencies. But Token have some additional powers than being a medium of payment
- Coins built on their independent blockchain network while tokens don’t have a blockchain network of their own
- Creating tokens is a much easier process as you do not have to modify the codes from a particular protocol or create a blockchain from scratch.
- Digital coins are more difficult to create than tokens that can be built based on the existing blockchain like Ethereum.
- For example, Ethereum reffer to cryptocurrency buitl on Ethereum Blockchain, and on Ethereum blockchain, many token ware created as: Basic Attention Token (BAT), Bancor (BNT), Status (SNT), Augur (REP), Civic (CVC)…
Above is a comparison of coins and tokens, please fill in your comments and add different reviews of these 2. I will update with an infographic when I have more update from you.