What is the difference between Coin vs Token?

The cryptocurrency that we see has a very wide variety of currencies, such as Bitcoin, Ethereum, or even Bitkub. which we can divide into 2 types: coins and tokens. These two types have quite different meanings. Let’s take a look today.

Coin vs Token

What exactly is a coin?

A coin is a digital currency created with its own blockchain, often playing the role of money used in exchange but in digital form. Mining of that coin can be done in any form. This is in accordance with the details and conditions of the coin. Another meaning is in the emergency degree on digital asset business act. The definition is that coins or cryptocurrencies are created specifically for the exchange of goods or services. similar to a currency or even used for trading other cryptocurrencies Examples of coins are Bitcoin (BTC), Ethereum (ETH), and Dogecoin (DOGE).

Functions of the Coin.

Today, coins have a similar purpose to physical coins, they are mainly used to trade goods and services, while the price of the coin often fluctuates according to the demand and supply of the coin in the market. Some coins can also be used to pay the network fees (gas fees) that users have to pay to use the functions of the blockchain network, such as paying Ether (ETH) to create smart contracts on the Ethereum network.

What exactly is a token?

Tokens are cryptocurrencies that are built on other blockchains that do not have their own network. which has different functions. For example, tokens such as Tether (USDT), Yearn Finance (YFI), and Uniswap (UNI), etc., the tokens are divided into two types:

  1. Utility Token is a type of point or coin that is created electronically to “determination” of receiving a specific product or service.
  2. An investment token is a type of point or coin that is created electronically to “determine the rights” of a person holding a coin who is entitled to “benefits or dividends” or the holder will have the right to receive revenue sharing, including dividends, from the business.

Tokens' Functions

Tokens, like coins, can be used to exchange goods and services. 

But it has unique features, such as granting access to DeFi services, or tokens that correlate with other asset classes to provide stablecoins.

To check the cryptocurrency, you can click to see https://coinmarketcap.com/ and type the coin’s name in the search box.

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Coins are generated on its own blockchain network, while tokens are generated on other blockchain networks like Ethereum through smart contracts.

Both coins and tokens have different advantages and uses. To keep our investments low-risk and get a return. Do not forget to search for more information before investing as well.

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