Difference between Coin and Token
The skyrocketing rise of cryptocurrencies in the past two years has attracted many investors in the world. However, not many people know the new terms related to this industry. Some do not even know if they are buying tokens or coins. So that's why I am here to clarify the difference between coin and token
Cryptocurrency being a new industry includes a lot of new terms to refer to digital assets. Investors often use them interchangeably. Many people think that cryptocurrency and tokens are the same. It should be borne in mind that these two things are not the same. According to industry experts, all coins are tokens but all tokens are not coins in the crypto industry at the most basic level.
Let's take a look at it.
Cryptocurrency is usually native to the blockchain and is used to trade currency and store value, while tokens tend to use the blockchain for another currency. For example, Ethereum is a blockchain. Its original currency is ether. However, many tokens such as BAT and Looping
run on the blockchain. Coins directly represent the proposed medium of exchange. On the other hand, tokens represent an asset. The tokens can be held in value, or traded, and wagered to earn interest. Some examples of tokens are Uniswap, Chainlink, and Polygon.
Cryptocurrency transactions are handled by the blockchain, while tokens rely on smart contracts for trading. When a token is spent, it moves from one place to another. For example, NFTs (non-fungible tokens) are unique items, so the change in ownership must be handled manually. The currency does not need to be moved from one place to another. All transactions are recorded on the blockchain.
A token represents what a person has, while a coin indicates what they can own.
Everyone has used a token at least once in their life, even if it wasn't like that. According to experts, if an investor wants to buy a product, then coins are preferable, and if it is a service, then tokens can be used. If you want to know more about Coin vs Token Click the link: Difference between Coin and Token