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Learn the difference between Crypto Token and Coin

Many people get confused a coin with a token in the cryptocurrency sector. The truth is that the token and coin are pretty similar on a basic level. They both show value and can have payments. Also, you can exchange tokens for coins and vice versa. The significant difference among these two is the utility. There are certain things that you can easily do with tokens and can’t do with coins. Alternatively, some markets will only accept coins rather than tokens. It is essential to know that most users of cryptocurrency own both Crypto Token and coins. So, let’s understand some more critical differences between coins and tokens.

What is a Coin?

Some noticeable features differentiate tokens from crypto coins, which are the same as real-world money. Experts define coins by the following qualities. 

  • Acts as real money: Bitcoin was introduced for the single objective of substituting conventional money. The absurd appeal of anonymity and transparency encouraged the formation of other coins, comprising Litecoin, NEO, and ETH.
  • Runs on its blockchain: A blockchain records all transactions involving its local crypto coin.
  • Can be mined: people can earn coins in two manners. One is via conventional mining on the Proof-of-Work structure. Bitcoin hunters use this way to increase their gains. Another method is Proof-of-Stake, which is a more stylish way to earn coins. 

What is a Crypto Token?

Different from coins, tokens don’t possess their blockchain. Instead, they run on other crypto coins’ blockchains like Ethereum. Some very popular tokens on Ethereum include Tether, BNT, BAT, and different stablecoins such as the USDC. If blockchain deals with crypto coin transactions, then tokens depend on smart contracts that are codes that allow payments or trade between users. When you spend a token, you actually move it physically from here and there. The trading of NFTs is the perfect example of this. They are exceptional products. Thus a change in possession should be handled manually. NFTs usually carry just artistic or sentimental value; hence, they are close to utility tokens. 


The difference between coin and token is not huge; however, it can become a headache if you overlook it often. The fastest way to determine which one you should use is to watch what you are purchasing. If it is services, you can use utility tokens, and if it’s a product, you would require coins.


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