HomeAnswerNotificationsCustomize Feeds
HOMEQUESTION
What is the difference between cryptocurrency Coins and tokens?
$0.00
2 ANSWERS

Wow, great question. This question was asked on a certain discord server a couple of days ago and it prompted me to actually do some research on the matter.

Cryptocurrencies are basically digital currencies which are encrypted using cryptocurrency. Tokens and coins are both classified as cryptocurrencies.

As far as the difference between tokens and coins go, there's just one major difference. Coins be it bitcoin or Ethereum have their own blockchain and protocol. Whether or not their blockchain is a fork of another blockchain or if it was built from scratch, for a particular cryptocurrency to be classified as a coin, then it must possess its own blockchain.

Tokens on the other hand do not inherently possess their own blockchain. Yes they are built on a blockchain, but that blockchain wasn't built specifically for them. Tokens basically represent any asset or utility that has been built on top of a blockchain and when creating them, all you have to do is follow the same protocols of a particular blockchain that supports the creation of tokens, and simply make use of the template that's been created for the express purpose of creating tokens.

Tokens are usually used for creating Dapps(decentralised apps) and they make use of smart contracts which are computer protocols which are used to enforce and verify the the negotiations, performance and agreements of a particular contract.

To summarize everything, the major difference between them is that cryptocurrency coins have their own Blockchains while tokens are created from or better yet built on top of already existing Blockchains.

I hope this helps.

$1.48
Reply

From my understanding the difference is a crypto coin is the main coin and a token represents a value against that currency.

Steem is the crypto currency for the Steemit block chain. Whatever Dapps use the Steemit block chain and have their own tokens they are valued against Steem. The reason being is that the tokens are using a block chain that is not their own and can't be valued unless they are calculate against the coins block chain they are on.

If Musing bought out a token tomorrow it would be valued against Steem otherwise it wouldn't have any value.

$1.46
Reply