Coin vs. Token -What is the difference? |


What is the difference between a Cryptocurrency coin and a token?

Many people don’t know the difference between a coin and a token as they think they are both the same thing. Entering the Cryptocurrency Market by newbies is very difficult because one needs to know beyond the surface knowledge like the uptrend or downtrend of Bitcoin and some other common knowledge. One needs to know about blockchain which without it there will be no coin or token.

What is Blockchain?

Blockchain can be defined as a digital ledger built around a peer-to-peer system that helps store digital records or transactions. The system is designed so that the information cannot be hacked or changed, and so it serves as a good base that coin and tokens rely on to function. As we go through the article, we will understand the usefulness of blockchain technology and in-depth knowledge about crypto coins and tokens.


A coin is a cryptocurrency that has an independent blockchain.

What is a Crypto coin?

It is a crypto asset that runs on its own blockchain, just like Litecoin, Bitcoin, Ethereum, etc. Simply put, for a better understanding, each coin operates and functions on its own blockchain. For instance, Ripple operates and functions on the Ripple blockchain, same with Bitcoin, Ethereum and any other Crypto coin. A Crypto coin can also be called a native token or cryptocurrency. These coins are bootstrap from nothing, and the network is designed solely to achieve specific goals. For instance, Ethereum main function is to create computer programs that run one decentralized blockchain. The Ethereum coin pays attention to arbitrary program data that covers many things from social media to games. Ether is used for paying gas fees, managing assets, sending/receiving and also using the network to interact with decentralized applications (apps). Another example of a coin that has a specific objective is Bitcoin. Bitcoin, which is the most liquid coin in the crypto coin market, is used to store value and, with its secured and fixed monetary policies, acts as a medium of exchange.

General use of Crypto coin

Most of the crypto coin does the same function as the real-life coin which is to act as money. These cryptocurrencies have their own crypto coin wallet, which helps…

1….to transfer money to another wallet of the same coin. This is done either through a crypto coin exchange platform or directly from wallet to wallet.

2….to store value, after which one can decide to exchange the coin for other valuable items.

3….one can price goods and services with them as it acts as a unit of account.

It is important to note that some other coins have more functions than what has been listed above. For example, as explained earlier, Ethereum has other specific functions. Also, once a person possesses a lot of Dash Coin, he is allowed to vote on important decisions for the Dash network.


A token is the opposite of a crypto coin. This means that while the crypto coin runs on its own blockchain, tokens run on another Blockchain.

What is a token?

Token are a special outlay of a bigger smart contracts platform. The most popular platform where a token is built is the Ethereum platform. The platform allows it’s users to create, give and manage tokens from the main blockchain. The name of tokens that are built on the Ethereum platform is known as the ERC-20 token.

How tokens are created

Creating a token is not as difficult as one might think. But a person attempting to create a token should have some experience in programming. For a token to be created, the developer needs to use some of the native coins on the blockchain that the token is to be created. For example, the developer that plans on creating a token in Ethereum needs to use some Ether to enable the miners to validate the token creation.

Benefits of creating a token

The creation of a token is far easier than that of a coin because, with a coin, one must consider building a blockchain, unlike tokens that use other coins blockchain. Some of the benefits of tokens are the following:

  1. It saves the developer time and resources since they don’t have to create their own blockchain.
  2. It is easier to set up since the token relies on the security of the blockchain it is created from.
  3. Tokens, unlike coins, are built on standardized code protocol, so they are exchanged with minimum friction through an internal application.

Token Vs Coin

  1. One of the simplest difference between a token and a coin is that a token does not have its own blockchain while a coin has a blockchain.
  2. While coins are mainly used for payment purposes, tokens have several functions that can include payment. There are different kinds of tokens, and they have their specific functions. Some of the uses of tokens include:
  • Asset token: These are tokens that are backed by a real-world asset like real estate or gold.
  • Security token: This type of token represents shares of a company. The difference between a company’s real shares and that of a security token is that a security token has all the benefits of blockchain.
  • NFTs (non-fungible tokens): Such a token represents unique things like baseball cards, art, music and in-game items.

Conclusively, Both, crypto coin and token have their unique set of functions in blockchain technology, and with the rapid rate at which blockchain technology is spreading, it will be essential to know the difference between those two and their use because such knowledge might come in handy in the future.