Dear colleagues,

In this article, I will explain the main differences between **coin** and **token** in cryptocurrencies in a simple and clear way, focusing on what is important for understanding them in the context of technologies and their use.

### Key Differences Between Coin and Token

1. **Own Blockchain Network**

- **Coin:** Has its own independent blockchain network. This is the main currency of this network, used for transactions and maintaining the system.

- Example: Bitcoin (BTC) operates on the Bitcoin blockchain, Ethereum (ETH) – on the Ethereum blockchain.

- **Token:** Does not have its own blockchain – created and operates on an existing network (most often Ethereum, Binance Smart Chain, etc.).

- Example: USDT (Tether) or Chainlink (LINK) are tokens built on Ethereum.

2. **Purpose**

- **Coin:** Primarily serves as digital currency – for payments, storing value, or “fuel” for the network (e.g., paying transaction fees).

- Example: With BTC you pay directly, with ETH – you cover “gas” fees on the network.

- **Token:** Has more specific functions, often related to applications or projects – can represent an asset, voting rights, access to a service.

- Example: DAI (stablecoin), SAND (for games in The Sandbox).

3. **Creation and Technical Complexity**

- **Coin:** Requires the creation of an entire blockchain network from scratch, which is complex, expensive, and time-consuming.

- Example: Solana (SOL) is the result of building a new blockchain.

- **Token:** Easier to create through smart contracts on an already established network – anyone with basic skills can make a token in hours.

- Example: ERC-20 tokens (like UNI) are standard and quick to develop.

4. **Use Cases**

- **Coin:** Similar to traditional money – you pay, save, trade.

- Example: You send LTC (Litecoin) to a friend as payment.

- **Token:** Often serve as “tools” in an ecosystem – access to a platform, rewards, representation of ownership.

- Example: BAT (Basic Attention Token) is given for watching ads in the Brave browser.

### Cultural-Psychological Perspective

- **Coin:** People see them as “real money” – a symbol of independence and power. Bitcoin is the “king” because it has its own network and history.

- **Token:** Often are “players” – attract with promises of quick profits or innovations, but carry more risk and confusion due to their dependence on other networks.