Difference between crypto currency coins and crypto tokens Before a crypto currency is launched and released to the public it has to go through Initial Coin Offering. This is the process in which a company which want to release a crypto currency raise money through selling their tokens to the public promising their customers that this coin will increase in value when launched and some are distributed through airdrops so as to create awareness and demand.
What is a crypto coin?
These are decentralized crypto coins which are run on standalone blockchain and can be mined. They represent money and are a medium of exchange. They have different features, some are secure crypto coins which safe keep the transaction details of the sender and are untraceable but some are not they are just transparency ordinary coins. They have no other special uses they are just used for making payments and storing value.
What are Crypto tokens?
These are Ethereum Request for comment tokens popularly known as ERC-20, they are different to the crypto coins in the sense that these do not represent money but they have broader functionalities they do not have standalone blockchain like others but they run on existing Ethereum blockchain and they even use Ethereum addresses when sending and receiving. These cannot be mined like other crypto coins but they are stacked and they use proof of stake while crypto coins use proof of work.
Advantages of tokens
Tokens rely on existing blockchain and they take full advantage of those blockchain. Since they rely much on those it make them stable and their prices are likely to keep on rising e.g. smart contracts are now the preferred digital agreement so this is another reason which makes tokens stable and valuable. They also work as digital store of security information.
Disadvantage of token
Ethereum tokens rely and benefit from the Ethereum technology and this makes them stable and strong but however to a greater extent this is a potential disadvantage in the long run. Coins which rely their future on running project projects or exchangers and are fully backed by those, what do you think will happen if the backing exchanger is closed down or if the backing project has failed. Automatically those coins will crush to zero and you will lose your money.
Conclusion
The capability of token for performing different tasks makes them of great use, at some time digital currency crypto currencies might not be a preferred method of payment due to the fact that they are volatile and their value is not stable it can change any time and this is no favorable when it comes to business so this leaves tokens with a better margin as they have so many capabilities.
