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Crypto Token vs Coin - Understand the Differences

TL;DR:

Coins vs Tokens:

  • Coins are unique types of cryptocurrencies that run on their own dedicated blockchain networks, like Bitcoin, Ethereum, Ripple, etc.
  • Tokens, on the other hand, are digital assets that function on pre-existing blockchain platforms, offering special advantages such as enhanced interoperability.

 

 

With over two million tokens and coins in the crypto space, there is no shortage of cryptocurrencies out there.

There is also a great deal of confusion when it comes to the difference between a crypto token vs coin. We will demystify the differences and provide you with some fascinating details about cryptocurrency tokens and coins.

Sometimes, the terms "coin" and "token" are interchangeable, with the former referring to what people call "coins" and the latter to what people call "tokens". Some will refer to all currently accessible digital items under either moniker, like here at CoinSpotter.

It's crucial that you understand the differences between cryptocurrency coins and tokens because there are some significant ones.

We'll examine the reasons for the widespread misunderstanding of the concepts in this Token vs. Coin comparison first. After that, we’ll explain what coins and tokens actually are, give you some samples of each, and describe how to use each. That way, you'll be much more well-equipped the next time you use a centralized exchange, like Binance or Coinbase, or a decentralized exchange like Uniswap or Pancakeswap, to trade cryptocurrencies.

You'll be able to tell whether a digital asset is a coin or a token by the end of this guide, so let’s get right into it!

 

Crypto Token vs Coin - What is a Coin?

A coin is a cryptocurrency asset that is native on its own blockchain.

Some examples of crypto coins are:

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Litecoin (LTC)
  • Solana (SOL)
  • Tron (TRX)
  • Monero (XMR)
  • Stellar (XLM)
  • Ripple (XRP)
  • Cardano (ADA)
  • Cosmos (ATOM)
  • Dogecoin (DOGE)

Cryptocurrencies can be exchanged from one person to another. However, when you give and receive coins, no actual coins move. A massive global database contains all the "coins" as data. All transactions are recorded in this database (blockchain) which is checked and confirmed by computers (nodes) all around the world.

 

Types of Crypto Coins

The way coins are made, their worth, and the purpose they serve can all be different.

Here are a few major types of crypto coins:

Native Coins: As the primary medium of exchange for a network, native coins operate on their own blockchain.

Native Coins Examples:

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Litecoin (LTC)
  • Solana (SOL)

Forked Coins: These are coins that are created by forking or branching off from an existing blockchain.

Forked Coins Examples:

  • Ethereum Classic (ETC)
  • Bitcoin SV (BSV)
  • Bitcoin Cash (BCH)
  • Wownero (WOW)

Wrapped Coins: Users can access cross-chain capabilities and liquidity thanks to this type of coin.

Wrapped Coin Examples:

  • Wrapped Bitcoin (WBTC)
  • Wrapped Ether (WETH)
  • Wrapped MATIC (WMATIC)
  • Wrapped CRO (WCRO)

Stablecoins: Coins whose value is tied to that of another asset, such as gold or fiat currency. They seek to stablize prices and reduce volatility.

Stablecoin Examples:

  • Tether (USDT)
  • USD Coin (USDC)
  • Dai (DAI)
  • Binance USD (BUSD)

 

How to Use Crypto Coins

Cryptocurrency coins are usually used similar to how fiat currencies are used - as money. In fact, Monero has now become the de facto digital payments currency that Bitcoin was originally designed to be, as Satoshi Nakamoto stated in the original Bitcoin whitepaper. Bitcoin, on the other hand, is now seen and used more like a store of value, akin to gold.

Coins are generally used for the following purposes:

  • Transferring money (giving and receiving value while using them)
  • Storing value (saving and later swapping them for something of value)
  • Using them as units of account (pricing products and services)

In essence, coins are magical internet money.

However, there are coins that also have additional uses besides being used as money, such as be used for gas in transactions, earning staking rewards, and voting on decisions that affect the direction of the coin’s parent blockchain.

 

Crypto Token vs Coin - What is a Token?

Tokens are often called coins. However, there are some key differences between tokens and coins.

A token is produced and exists on an existing blockchain like Ethereum.

Some examples of crypto tokens are:

Speaking of Ethereum, it is the largest blockchain and houses the most tokens out of any blockchain, although BNB Chain is also way up there. Ethereum is still the king of tokens given it is the OG smart contracts platform that created the ERC-20 token standard that countless tokens have used to create their token smart contracts.

 

Creating a Crypto Token

It has become incredibly simple to create a crypto token today. Thanks to online tools like Remix, OpenZeppelin, and token generators, anyone can create a token smart contract very easily.

It’s no wonder there are now literally millions of crypto tokens available to trade on decentralized exchanges, although on CoinGecko you will currently only see around 10,000 tokens due to their stringent listing rules.

The most common crypto tokens created these days are known as meme coins. This is due to the relative ease in creating a memecoin project and token smart contract, as well as the appealing allure of fast and massive gains. In fact, some memecoins, like PEPE, have gone on to generate over 10,000x in profits for some buyers.

This is a big reason why we created CoinSpotter, so that you, too, can discover the latest potential 1000x gems in old favorites like the Ethereum Ecosystem all the way to the new kid on the block, the Base Ecosystem. We want to help provide information on the latest projects that can potentially land you massive gains, while filtering out honeypots, rugpulls, and other scam projects.

Creating a token requires having gas in the form of the parent blockchain’s coin to validate the token transaction that creates the token smart contract. Every transaction done with the token will then also carry with it a gas fee. A token on Ethereum, like PEPE, will also require ETH for the gas fees when sending PEPE to another wallet or swapping on a DEX.

 

Conclusion

There you have it! You now know the difference between a crypto token vs coin. Both coins and tokens are integral aspects of the cryptocurrency space. If you’re here on this site, you are most likely interested in crypto tokens. And you’re in luck because we have thousands of tokens listed on CoinSpotter for you to explore and determine which ones could be the next 1000x gem.

Happy gem hunting!

 

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Disclaimer:

This blog is for educational purposes only. The information we offer does not constitute investment advice. Please always do your own research before investing. Any views expressed in this blog and by CoinSpotter do not constitute a recommendation that any particular cryptocurrency (or cryptocurrency token/asset/index), portfolio of cryptocurrencies, transaction, or investment strategy is suitable for any specific person.

 

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