Tokens and Coins: What are the differences?

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Avatar for Jisso_Kim
3 years ago

I think you are confused about how we compare contrast the differnces and similarities between Token and Coin. I also have difficulties comparing them. Well, we will providing information in able for us to be enlightened to these things.

Difference between Coins and Tokens?

Coin

source: https://pngtree.com/freepng/cartoon-coin_161124.html

What is Coin?

A coin 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.Ā 

A coin, as a single unit of currency, can be traded for an agreed upon value depending on current market conditions. Occasionally it can be exchanged for a different coin or token that belongs to another blockchain, either through a cryptocurrency exchange or through private transfers (like peer-to-peer and OTC trades). Decentralized exchanges and atomic swaps are also viable alternatives for coin and token trading.

  • A Coin is a digital currency similar to the physical currency

  • Coin operates on its own blockchain with its own protocol

  • Coins are purely used as a source of payments

  • Coin is a basic unit of cryptocurrency. an independent digital currency that operates without any dependence on a platform.

  • The use of coins is mostly in the form Of digital currencies.

  • Example: Bitcoin. Litecoin. Ripple, ETH, NEO. etc

Token

source: https://www.google.com/url?sa=t&source=web&rct=j&url=https://support.google.com/legal/answer/3463239&ved=2ahUKEwjI8c7aypHtAhWDJaYKHcs0CqAQlZ0DegQIARAE&usg=AOvVaw1pocASzM-diJwCTCEwiJiC

What is Token?

And so if a coin (otherwise known as a cryptocurrency or native token), has its own blockchain, aĀ token is the opposite: it runs on another blockchain.

The best known example of this is theĀ ERC20 token, which is any token that uses the Ethereum blockchain.

Sub Info

  • A Token is a digital asset issued on a particular project

  • Token does not operate on their own blockchain

  • Tokens are used for payments and signing digital agreements.

  • For e.g. BON and DAO token

  • Tokens require a platform to be built and operate,that is an existing blockchain like NZO or Ethereum.

  • The use of tokens is divers as they work for a different purpose for dApps and different for DAOS.

  • Example: Security tokens utility tokens, equitv tokens. Musicoin. BNB. etc.

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