Don’t make the mistake between a coin and a token again! Still don’t understand the difference between the two? We will explain everything here.
What is an angle?
A coin, also called a cryptocurrency, is a form of digital currency that uses blockchain technology to record transactions. Coins are decentralized, meaning they are not controlled by a central institution such as a bank or government. Transactions are made directly between users without the need for an intermediary.
Coins have their own blockchain, which is a decentralized database that records all transactions made with cryptocurrency. Transactions are validated by nodes on the network, which use consensus protocols to ensure that transactions are valid and adhere to network rules.
The best known examples of coins are BTC, ETH, ATOM, AVAX, NEAR… These cryptocurrencies have their own blockchain that allows for decentralized storage and transfer of funds.
What is a Token?
A token is a unit of value that is created and stored on a blockchain, a decentralized ledger technology that records transactions. Tokens can be used to represent different things, such as shares, rights, votes, rewards, loyalty points, etc. They can also be used to represent digital assets such as game tokens, governance tokens, reward tokens, securities, etc.
It is important to note that tokens are usually created on an existing blockchain, such as Ethereum, which allows developers to create their own”crypto” using the functionality of the existing blockchain, rather than creating an entirely new blockchain.
What is the difference between coin and token?
Terms”angle” And “token“are often used to describe cryptocurrencies, but have slightly different meanings.
One “angle“is a cryptocurrency that has its own blockchain. This means that it has its own decentralized database that records all transactions made with this cryptocurrency. Bitcoin, Litecoin and Ripple are examples of coins.
One “token“is a cryptocurrency that runs on an existing blockchain. It does not have its own blockchain, it is created on an existing blockchain to represent an asset or security, for example UNI or AAVE. Tokens can be used to represent digital assets such as gaming tokens , governance tokens, reward tokens, security tokens, etc. Tokens are often created via a Initial Coin Offering (ICO) to finance a project. Ethereum is an example of a blockchain on which many tokens are created.
Don’t repeat the mistake!
It is important to note that the difference between the two terms is relatively technical and they are often used interchangeably in the cryptocurrency community.
Now that you know the difference between coin and tokendon’t repeat the mistake!