What is the difference between a coin and a token?
In the context of cryptocurrencies, currencies can be classified into two main types: coins and tokens. Let me explain the difference between them:
1. *Coins*:
- These currencies operate on their own blockchain.
- They are used as a medium of exchange, a unit of account, and a store of value.
- Examples: Bitcoin ($BTC ), Ethereum ($ETH ), and Litecoin
2. *Tokens*:
- These tokens are issued on the blockchain of other currencies, such as Ethereum.
- They can be asset tokens that represent physical or digital assets, or utility tokens that are used to access specific services or products within a particular network.
- Examples: Uniswap on Ethereum, Binance Coin ($BNB ) which started as a token on Ethereum but now runs on its own Binance blockchain.
So, coins are cryptocurrencies that run on their own blockchain, while tokens are cryptocurrencies that run on another currency’s blockchain.
