Cryptocurrencies have grown substantially over the last decade. This growth has buzzed up a lot of different questions.
One of them is about the difference between crypto coins and tokens. So, in this article, we will differentiate between both of them.
What are crypto coins and tokens?
A crypto coin is the electronic version of underlying value, which might be questionable, whereas tokens carry the asset or deeds.
Although you can buy crypto tokens with crypto coins, some crypto tokens carry more value than any of them.
Many people believe crypto coins and tokens are the same. However, it is not. All crypto coins are considered tokens, but every token is not a crypto coin. Get it? Let’s move further.
Difference between crypto coins and crypto tokens
For beginners, the utility of crypto can help distinguish between a coin and a token.
Here are the differences between crypto coins and tokens:
– A crypto coin is native to a blockchain and is beneficial to trade currency and store value. Similarly, a token is also there but with another coin’s blockchain.
For instance, Ethereum, a blockchain, has Ether as its native coin. Moreover, several other tokens like BAT and Loopring also operate on a similar blockchain.
– Coins represent a proposed medium of exchange directly. The crypto tokens hold value, which can earn interest on staking.
Uniswap, Chainlink, and polygon are some examples of crypto tokens.
– When you spend a token, it moves from one place to another. For instance, NFTs (non-fungible tokens) are one-of-a-kind items, so the change needs to be handled manually.
A coin does not need to move from one point to another. Blockchain records all the transactions related to the crypto coins.
– A crypto token represents what a person owns, while a coin represents the value he can hold.
For instance, your car title is a token. When you sell the car, you disseminate the value of the title to another person. However, you cannot buy something else with that title.