Are you having a hard time understanding a difference between a crypto token and a crypto coin? No worries, you’re at the right place. The terms ‘’crypto token’’ and ‘’crypto coin’’ are confusing, and many consider them the same.
What is a Crypto Coin?
Crypto coins are any digital currency that has a separate, independent blockchain (Ethereum, XRP, Bitcoin, …). It is secured by a special cryptography technique, which makes it virtually impossible to double-spend or counterfeit. Many digital currencies are decentralized networks featuring blockchain technology, a public distributed ledger run by a disparate network of computing hardware. Bitcoin is the most popular example of a crypto coin.
What is a Crypto Token?
Tokens are cryptocurrencies that don’t have their blockchain. They rely on another blockchain to benefit its technology. Unlike coins, tokens have many use cases, and therefore they are also referred to as utility tokens. They can be used to access a product or a service. The ERC-20 Tokens are the best-known example of crypto tokens, which employs the Ethereum blockchain.
Other uses for tokens include:
- Asset Tokens – Tokens that are backed by physical assets like real estate or gold.
- Security Tokens – Similar to securities from the old financial system, these tokens denote shares of a business but with all the advantages of blockchain.
- Stablecoins – These represent more stable currencies such as the Euro or US Dollar.
- NFTs or Non-Fungible Tokens – These tokens are unique in its nature like baseball cards, art, and in-game items.
How do you look at this? Please feel free to share your valuable feedback with us in the comment section below.