A lot of people treat the words "coin" and "token" as the same thing when they discuss cryptocurrencies or blockchain projects. But is there a difference between those two terms? The answer is YES! There is a subtle difference between them, and it's important to understand it if you are starting to learn about cryptocurrencies.
What's a simple definition of a coin?
A coin will have its own unique blockchain code.
The principle use case for cryptocurrency coins is payment.
How is a token different from a coin?
A token does not have its own unique blockchain. In fact, it is built on top of another blockchain.
Many tokens were designed to be used on top of the Ethereum blockchain, and intended to operate within the Ethereum ecosystem. Because of this, any transaction associated with these types of tokens (moving tokens to another wallet address, checking wallet balance, etc.) requires ETH to process it.
Thanks for reading, and stay safe!
Last updated October 18, 2020
I used to use them interchangeably, lol! Thanks for pointing that out in a simple way.