When stepping into the world of cryptocurrency, two words you’ll hear often are coins and tokens. While many people use them interchangeably, they actually mean different things. Understanding the difference can help you make smarter decisions as an investor or user.
🔹 What Are Coins?
Coins are digital currencies that run on their own blockchain. They are the native assets of a blockchain network and usually function as money.
Examples:
Bitcoin (BTC) → runs on the Bitcoin blockchain
Ethereum $ETH → runs on the Ethereum blockchain
BNB → runs on the BNB Chain
Main uses of coins:
Payment for goods and services
Store of value (like Bitcoin as “digital gold”)
Paying transaction or gas fees on their blockchain
Think of coins as independent money with their own payment network.
🔹 What Are Tokens?
Tokens are digital assets that are built on top of existing blockchains. They don’t have their own blockchain but rely on another one to operate.
Examples:
Uniswap $UNI → runs on Ethereum
Shiba Inu $SHIB → runs on Ethereum
USDT (Tether) → runs on Ethereum, Tron, and others
Types of tokens:
1. Utility Tokens – give access to a product or service (e.g., UNI for trading on Uniswap).
2. Security Tokens – represent ownership in real-world assets like stocks or real estate.
3. Stablecoins – pegged to fiat currencies (e.g., USDT, USDC).
4. NFTs (Non-Fungible Tokens) – unique tokens that represent digital collectibles or art.
Tokens are more like digital applications that live on top of a blockchain ecosystem.
🔑 Key Differences Between Coins and Tokens
Feature Coins Tokens
Blockchain Has its own blockchain
Runs on another blockchain
Examples BTC, ETH, BNB UNI,USDT SHIB
Use Case Payments, gas fees, store of value Utility, governance, stablecoins, NFTs
Creation Harder to create (need new blockchain) Easier to create (smart contracts)
🚀 Final Thoughts
Coins are the backbone of blockchains, functioning as digital money.
Tokens are built on top of blockchains, often designed
for specific purposes like governance, payments, or representing real-world assets.
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