What is the Difference Between Coin and Token?

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In the world of Cryptocurrencies, there are a lot of words and terms that might confuse even the sharpest of minds. In this article we are going to discuss two of these words that have been often misunderstood and used interchangeably, these words are “coin” and “token”, and what their differences are.

Coin and Token Defined

To further your understanding of the differences between coin and token it is important to know what Coin is and what Token is.

  • Coin: A cryptocurrency coin is an asset in digital form and it has its own dedicated blockchain created for it, it does not run on the blockchain of another cryptocurrency. That is what gives it the often confusing yet unique name “native token” simply implying that it has its own blockchain. Examples of coin are Bitcoin, Litecoin, Ethereum. Bitcoin is still by far the most popular of them all.
  • Token: a token is like the opposite of a coin, it does not have its own dedicated blockchain created for it, it is usually run on the blockchain of a coin. For example, the ERC20 token that is run on the Ethereum blockchain. 

The Difference Between Coin and Token 

The basic difference between Coin and Token lies in the blockchain, a coin has a dedicated blockchain created for it while a token does not run on a blockchain created for it.

Tokens can be used for other things other than payment, tokens can be used to gain access to services or products.

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