Before starting Trade You Should Know About Coin And Token

The key difference between a coin and a token lies in their functionality and the blockchain they operate on:

1. Coins

Definition: Coins are native digital currencies of a blockchain, often used as a means of payment or store of value.

Blockchain: Coins operate on their own independent blockchain.

Examples:

Bitcoin (BTC): The native coin of the Bitcoin blockchain.

Ethereum (ETH): The native coin of the Ethereum blockchain.

Use Cases:

Payment (e.g., Bitcoin as digital cash).

Transaction fees (e.g., gas fees on Ethereum).

Store of value (e.g., Bitcoin as "digital gold").

2. Tokens

Definition: Tokens are digital assets created on existing blockchains.

Blockchain: Tokens rely on the infrastructure of another blockchain (e.g., Ethereum, Binance Smart Chain).

Examples:

Tether (USDT): A stablecoin operating on Ethereum and other blockchains.

Uniswap (UNI): A governance token for the Uniswap protocol on Ethereum.

Use Cases:

Utility tokens: Grant access to specific services or platforms (e.g., Basic Attention Token for Brave Browser).

Governance tokens: Allow holders to vote on protocol decisions (e.g., UNI for Uniswap).

Security tokens: Represent ownership in an asset or company.

Key Differences

FeatureCoinsTokensBlockchainOwn blockchainBuilt on existing blockchainFunctionNative currency (payment, fees)Specific utility or governanceExamplesBTC, ETH, ADAUSDT, UNI, LINKCreationRequires building a blockchainCreated using smart contracts

In summary:

A coin is the fundamental asset of a blockchain.

A token is an application-specific asset built on an existing blockchain.