Comment
Author: Admin | 2025-04-28
Are crypto tokens and coins the same thing? Not exactly. Here we explain their differences and uses, with insight into popular ones.Key Takeaways:CoinsA crypto coin is a form of digital currency that’s often native to its blockchain; it stores value and acts as a medium of exchange. Coins can be mined through Proof of Work (PoW) or earned through Proof of Stake (PoS).Examples include Bitcoin (BTC), Ether (ETH), and Cardano (ADA).TokensA crypto token is built for a decentralised project on an existing blockchain (usually Ethereum, the most popular blockchain for decentralised projects to build upon).A token represents an asset or offers holders certain platform-specific features.Tokens offer functions, including utility, security, and governance.Examples include Cronos (CRO); Very, Very Simple Finance (VVS); and Uniswap (UNI).Token vs Coin: What Is the Difference?While many people use the phrases ‘crypto coin’, ‘crypto token’, and ‘cryptocurrency’ interchangeably, they’re not the same thing. Though coins and tokens use distributed ledger technology (also known as blockchain technology), there are some significant differences between a coin and a token.The TLDR is: Crypto coins are a form of digital currency that are often native to a blockchain, with the main purpose of storing value and working as a medium of exchange.Crypto tokens are digital assets that are built on top of an existing blockchain (using smart contracts) and can serve a wide variety of functions, from representing a physical object to granting access to platform-specific services and features. What Is a Crypto Coin?Crypto coins are native to their own blockchain. The Bitcoin blockchain coin is BTC. The Ethereum blockchain has ETH. And the Litecoin blockchain uses LTC. These crypto coins are primarily designed to store value and work as a medium of exchange, similar to traditional currencies. This is why crypto coins are also referred to as cryptocurrencies.One of the other unique things about coins is the way they come into being. Generally, crypto coins are either mined using a Proof of Work (PoW) consensus mechanism or earned via a Proof of Stake (PoS) mechanism.For more on the differences between PoW and PoS, read Proof of Work vs Proof of Stake.What Are Coins Used for?When Bitcoin was created, it was envisioned as a replacement for traditional fiat currencies. Along with other crypto coins, it was designed to work in the same ways as paper money and metal coins, meaning it can be used for many of the things normally used with US dollars or euros, including:Storing valueExchanging for other currenciesPaying for goods and servicesTransferring to othersIn addition to these traditional uses, some crypto coins can also take advantage of smart contract technology to offer additional features. For example, DASH is an altcoin that acts as a cryptocurrency but also gives holders the ability to vote in a decentralised autonomous organisation (DAO).Popular Crypto CoinsBitcoin (BTC) was launched in early 2009 by the mysterious ‘Satoshi Nakamoto’ and is the first and most well-known crypto coin in the world. Its head start has allowed it to become the most valuable cryptocurrency.Ether (ETH) is
Add Comment