Crypto Coin Vs Crypto Tokens

Are crypto tokens and crypto coins the same thing?

Almost everyone who has ever used cryptocurrencies has occasionally confused a token with a coin. They are both used interchangeably but they are not the same thing. There are things you can do with tokens and not with coins

Here, I will explain how to tell a coin from a token;

Crypto Coin vs Crypto Tokens

• Crypto Coins are a form of digital currency that are often native(specific) to the blockchain. The BTC coin is native to the Bitcoin blockchain. The ETH coin is native to the Ethereum blockchain and so on.

Crypto tokens aren’t native to a blockchain. They are built on an existing blockchain network.

• Each cryptocurrency has its own blockchain.

Unlike coins, tokens do not have their blockchain. Instead, they operate on other crypto coins' blockchains, such as Ethereum.

• Crypto coins serve primarily as a means of storing value and working as a medium of exchange.

Crypto tokens utilize smart contracts to fulfill a variety of functions.

• Crypto coins are either mined using a proof of work (PoW) consensus mechanism or earned via a proof of stake (PoS) mechanism.

Tokens aren’t mined; they are created and distributed by the project developer.

• Crypto coin transactions are handled by the blockchain.

Tokens rely on smart contracts.

• Crypto coins are essentially digital versions of money.

Tokens are more like assets or deeds.

• Crypto coins can be used as a medium of exchange.

Crypto tokens can be bought, sold, and traded like coins, but they aren’t used as a medium of exchange.

• Like an asset, a token represents why you own

while a Crypto Coin denotes what you are capable of owning.

• Popular crypto coins are Bitcoin(BTC), Ethereum (eth), and Cardano(ADA).

Popular tokens are Cronos, Smooth love portion(SLP), Uniswap(UNI), Arbitrum(ARB).

The difference between crypto tokens and a crypto coins isn't vast, but it can cause a major headache if frequently overlooked.

Paying close attention to the items you purchase might help you determine which one to use quickly. Most often, you would need coins if it were a product. If it's a service, you can typically utilize utility tokens.