Difference between crypto coins and Tokens

Crypto coins, Tokens and Cryptocurrencies

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Categories: Cryptocurrency

Crypto Coins vs Tokens

When discussing crypto, you will see the terms coin and token. Some people use them inter changeably, but that is a mistake. They are not inter changeable, and knowing the difference between a coin and a token is important. While coins and tokens are considered to be forms of cryptocurrencies, they provide different functions. Coins are built on their own blockchain and were originally created as currency.

Generally, any blockchain-based cryptocurrency that is not bitcoin is referred to as an altcoin (more on those below). A digital coin is built on its own blockchain and works like fiat (traditional money).

Coins can be used to store value and as a means of exchange between two parties doing business with each other. Examples of coins include bitcoin and litcoin. But tokens – which are built on existing blockchains (not on their own) – can function in many more ways than simply acting as currency.

Rather than representing an exchange of value, tokens are considered programmable assets on which you can create and execute unique smart contract. These contract scan establish ownership of assets outside the blockchain network. 

Token scan represent units of value – including real-world objects such as electricity, money, points, coins, digital assets, and more – and can be sent and received. Ether (ETH), which is used to conduct transactions on the Ethereum network, is a token.

In another example, the Basic Attention Token (BAT), also built on Ethereum, is used in digital advertising. The token can be used as part of a software application –such as providing access to an app, verifying identity, or tracking products moving through a supply chain.

They can also represent digital art, like non-fungible tokens (NFTs). There have also been experiments to use NFTs to represent physical assets such as real-life art, and real estate.

 Bitcoin, litecoin, blockchains, currency, coin types, BAT, Ether

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