Cryptocurrency Coins vs. Tokens

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People often misunderstand the differences between coins and tokens thinking both have the same purpose in the crypto industry. However, even though both are used interchangeably doesn't mean they are the same thing as they have differences.

Crypto Coins

By definition, crypto coins are referred to as a digital currency that operates on their blockchain network. This means a coin has its blockchain and doesn't rely on another blockchain network the purpose a of coin is to be used as a stored value or as a form of money in its blockchain.

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Bitcoin, Ethereum, STEEM, Binance BNB, TRON, Litecoin, and several others are good examples of crypto coins that have their blockchain. Also, the primary usage of coins is for transactions trading to serve as a store of value for the future.

As we have earlier said, crypto coins have their blockchain. Meaning each coin like STEEM has its blockchain which is the same way that Bitcoin, Ethereum, and others have their blockchain. For example, STEEM runs on the Steem blockchain, Ethereum runs on the Ethereum blockchain, and Bitcoin runs on the Bitcoin blockchain.

In terms of earning, crypto coins are often earned through what is known as mining or staking which as for STEEM coins is earned through posting and upvoting of posts on the Steemit platform or via staking.

Crypto Tokens

By definition, crypto tokens refer to digital assets that are built on an existing blockchain network. Tokens represent utilities or assets that are built on a blockchain network that already exists.

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PUSS, Uniswap, Chainlink, and USDT are examples of tokens that are built on existing blockchains. The purpose of tokens is to represent assets in real-world use which are mostly used within a specific platform as a governance token.

Based on a blockchain network, tokens are created using the infrastructure of an existing blockchain, just like the PUSS coin is created on the Tron blockchain network to provide certain privileges on decentralized applications.

Tokens are mostly created through smart contracts on a blockchain like Ethereum using standards like ERC-721, or ERC-20.

Conclusion:

Crypto coins are the native coins of a blockchain network, that are mainly used for value transfer or payment, whereas crypto tokens are built on existing blockchain, serving specific purposes, such as representing assets, utility, or as governance tokens. Thank you for reading my post.