In the crypto world, you often hear two similar terms — coin and token. Although both are digital assets, there is an important difference between them.
Coin — is a cryptocurrency that operates on its own blockchain. It is used as a means of payment, for storing value, or for paying transaction fees within its network.
Examples of coins: Bitcoin (BTC), Ethereum (ETH), Solana (SOL).
Token — is a crypto asset that is created based on an existing blockchain using smart contracts. Tokens do not have their own blockchain and usually serve a specific role within individual projects: from payments within the platform to voting rights or staking.
Examples of tokens: USDT, UNI, APE, STRK.
Main differences:
Blockchain:
A coin has its own blockchain. A token operates on someone else's (for example, Ethereum or Solana).Creation:
Coins are created through the development of a blockchain from scratch. Tokens are created using a smart contract.Purpose:
Coins are full-fledged currencies in the ecosystem. Tokens are tools or services within a specific product.
Conclusion:
Every coin is a cryptocurrency, but not every token is a coin. A coin is the foundation, and a token is an 'overlay' that utilizes this foundation.
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