Coin and Token; their difference

What is the difference between tokens and coins? We'll tell you. It's all about the blockchain. At its core, a Blockchain is a digital ledger. The distributed ledger tracks and preserves every transaction, creating a shared record of the entire history of the chain. By using cryptographic hash functions and decentralizing a Blockchain across a network, the data becomes unalterable and the chain is maintained by a network of computers.

We have to differentiate coins from tokens and give a clear definition of what is the difference between coin and token.

Coin and token are popular terms used when the topic of cryptocurrency comes up. The term coin is much more general and is used to describe a particular currency, for example Bitcoin. The term token is used to describe a cryptocurrency that has utility which is not necessarily related to being a currency. Typically tokens are not made to be used as currencies but rather as ways to get access to something.

Coins are a digital alternative to fiat currency. They're used to settle debts, store and exchange funds. Coins work on their own blockchain. They are decentralised, anonymous and can be used without the need for third parties.

Some example coins are: Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH) and Ripple (XRP).

Token are created on existing blockchain, typically Ethereum. Consumers can use tokens for access to products, services or platforms at a specific time or in a particular place.

Token is a tradable digital asset (cryptocurrency) which can be transferred between accounts and used to generate smart contracts. They are usually issued on an ICO (Initial Coin Offering) event.

It may be confusing to imagine what a token and coin are. In reality, they are not all that different. Both are used to store value or to make payments. The main difference between the two is that a coin has its own blockchain platform and a token exists on an existing blockchain platform.

One use for coins can be functionality with a certain business, like where you can use them to pay for items in an online shop. Here the coins are functioning like a currency and not like an access token.

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