Understanding Crypto Tokens And What's The Difference With Crypto Coins?

[fathafraink]

What Are Crypto Tokens?

Crypto tokens are crypto currencies that operate within the coin blockchain system. We can conclude that crypto tokens cannot run directly on the blockchain itself, but must ride on the blockchain system of a particular crypto coin.

What Are the Types of Crypto Tokens?

Non Fungible Token (NFT), SoV (Store of Value), Digital Currencies, Stablecoin, Utility Token, Security Token.

The Difference between Tokens and Coins

The most basic difference between tokens and coins is the blockchain system they have. Crypto tokens use the coin blockchain to operate their systems.

CONCLUSIONS

Crypto tokens are a type of cryptocurrency that operates within the blockchain system of a specific crypto coin. Unlike Coins that can run directly on their own blockchain network, tokens rely on the infrastructure of a host coin's blockchain. Various types of crypto tokens exist, including Non-Fungible Tokens (NFTs), Store of Value (SoV) tokens, Digital Currencies, Stablecoins, Utility Tokens, and Security Tokens, By understanding the distinction between tokens and coins is crucial in navigating the cryptocurrency landscape, as each has its unique characteristics and use cases.

Note: I created this topic because I still see many people calling TOKENS as COINS, even though they are not the same. Hopefully with this short thread, we can understand the difference better.

[Faisal2202]

Great post dear op, you have pointed a common mistake that mostly member do even i am included. Means, even those who knows the difference between these two terms but still use one in place of other. We should follow the rules and use only that which is correct term.

Your explanation is a good reminder for those who already knew it but it is a hard explanantion for those who are reading or getting familiar it for the first time. I think you should add some examples too. Like for the token you could say any ERC-20 token based on Ethereum Blockchain or any BRC-20 token based on BTC blockchain.

And for the coin you could say BTC is a coin because it has its own blockchain while BRC-20 tokens are based on BTC blockchain. Well again, you make a good post keep it up.

[tranthidung]

Main differences between coins and tokens are

• A coin has its own blockchain. Whatever its blockchain is, whatever its algorithm is: either Proof of Work, Proof of Stake, etc. It has an own blokchain.
• A token does not has its own blockchain. It is built on another blockchain and if that blockchain die, stop working, that token stop working too.
• In other words, tokens are like parasites on other blockchains and tokens on a blockchain will need that chain native coin for transaction fee. ERC20 tokens need ETH for fee, BEP20 tokens need BNB for fee.

theymos' explanations on Definition of tokens

[Hamza2424]

__SNIP__

Hmm, Quite an Interesting topic at least it's not a redundant one, as for how to get merits, what is post quality, how to trade, etc etc.. Respect your different take and for guiding the new ones on the basic difference between the Tokens and Coins.

⚫ With that I have an investment guide for the new ones who are inserted in long-term investment it would always prefer the Coin investment on behalf o the Token because in the Coin there is a whole bussnies ideology and ecosystem support to the project which gives the worth to the feasible investment to the ecosystem users and other Bussnies  Retailers.

⚫ At the same time token has lower usability anticipation most of the tokens are governance tokens and for a limited range of utility which decreases the investment capital and attraction of the institutional funding.

[o48o]

I have accepted that language changes. I used to get arguments about the origins and now i just don't care anymore. I've seen even talented developers using term "native token" about their incentives in L1. At that point i got frustrated and decided that this is not worth my time anymore so i completely stopped trying to preach the origins to everyone.

People have been using name shitcoins and memecoins more often then meme tokens or shit tokens so i am assuming it have been a lost battle for a while now. I don't really care. People who care understand the difference and people who don't care... Well i don't care if they do. It's not like they have even any say in the matter.

[fathafraink]

Great post dear op, you have pointed a common mistake that mostly member do even i am included. Means, even those who knows the difference between these two terms but still use one in place of other. We should follow the rules and use only that which is correct term.

Your explanation is a good reminder for those who already knew it but it is a hard explanantion for those who are reading or getting familiar it for the first time. I think you should add some examples too. Like for the token you could say any ERC-20 token based on Ethereum Blockchain or any BRC-20 token based on BTC blockchain.

And for the coin you could say BTC is a coin because it has its own blockchain while BRC-20 tokens are based on BTC blockchain. Well again, you make a good post keep it up.

Great Thanks @Faisal2202, yes I think it's a reminder, because I believe most of member already know about that, but maybe some seniors forgot too to call or say token as coin.

Main differences between coins and tokens are

• A coin has its own blockchain. Whatever its blockchain is, whatever its algorithm is: either Proof of Work, Proof of Stake, etc. It has an own blokchain.
• A token does not has its own blockchain. It is built on another blockchain and if that blockchain die, stop working, that token stop working too.
• In other words, tokens are like parasites on other blockchains and tokens on a blockchain will need that chain native coin for transaction fee. ERC20 tokens need ETH for fee, BEP20 tokens need BNB for fee.

theymos' explanations on Definition of tokens

Thanks for the reference, it's really helpful, especially for me as a newbie on this forum. Those long explanation is very clear to explain difference between A token and Coin.

__SNIP__

Hmm, Quite an Interesting topic at least it's not a redundant one, as for how to get merits, what is post quality, how to trade, etc etc.. Respect your different take and for guiding the new ones on the basic difference between the Tokens and Coins.

⚫ With that I have an investment guide for the new ones who are inserted in long-term investment it would always prefer the Coin investment on behalf o the Token because in the Coin there is a whole bussnies ideology and ecosystem support to the project which gives the worth to the feasible investment to the ecosystem users and other Bussnies  Retailers.

⚫ At the same time token has lower usability anticipation most of the tokens are governance tokens and for a limited range of utility which decreases the investment capital and attraction of the institutional funding.

Thanks for saying that it's not a redundant, because I think this is just a reminder. Regarding to how to ger merits, sometimes I need to do a hardwork to make a post that can be qualified as a quality post/thread, so I need some references from you or other senior in this forum how to get merits, hope I could develop myself better.

I have accepted that language changes. I used to get arguments about the origins and now i just don't care anymore. I've seen even talented developers using term "native token" about their incentives in L1. At that point i got frustrated and decided that this is not worth my time anymore so i completely stopped trying to preach the origins to everyone.

People have been using name shitcoins and memecoins more often then meme tokens or shit tokens so i am assuming it have been a lost battle for a while now. I don't really care. People who care understand the difference and people who don't care... Well i don't care if they do. It's not like they have even any say in the matter.

Why don't you care? Shouldn't fellow forum members be mutually beneficial to one another ?, so as to create a forum environment full of knowledge and understanding. I feel the warmth of the forum all this time, I think we should care about each other, right?

[@sriyan]

What Are Crypto Tokens?

Crypto tokens are crypto currencies that operate within the coin blockchain system. We can conclude that crypto tokens cannot run directly on the blockchain itself, but must ride on the blockchain system of a particular crypto coin.

What Are the Types of Crypto Tokens?

Non Fungible Token (NFT), SoV (Store of Value), Digital Currencies, Stablecoin, Utility Token, Security Token.

The Difference between Tokens and Coins

The most basic difference between tokens and coins is the blockchain system they have. Crypto tokens use the coin blockchain to operate their systems.

CONCLUSIONS

Crypto tokens are a type of cryptocurrency that operates within the blockchain system of a specific crypto coin. Unlike Coins that can run directly on their own blockchain network, tokens rely on the infrastructure of a host coin's blockchain. Various types of crypto tokens exist, including Non-Fungible Tokens (NFTs), Store of Value (SoV) tokens, Digital Currencies, Stablecoins, Utility Tokens, and Security Tokens, By understanding the distinction between tokens and coins is crucial in navigating the cryptocurrency landscape, as each has its unique characteristics and use cases.

Note: I created this topic because I still see many people calling TOKENS as COINS, even though they are not the same. Hopefully with this short thread, we can understand the difference better.

Coins :

Coins operate on their own blockchain. These coins typically have their own independent networks and are built from scratch.
Eg: BTC, ETH, LTC

Tokens :

Tokens are created and hosted on an existing blockchain platform, usually as a smart contract. The most common blockchain used for creating tokens is Ethereum, but other platforms like Binance smart chain and solona also support token creation. Tokens can represent various assets or utilities, and their functionality is determined by the smart contract they are built on.

Eg :
ERC-20 token like chainLink(Link)
Non-fungible token(NFT) like CryptoKitties
Utility tokens like BNB or UNI

[o48o]

I have accepted that language changes. I used to get arguments about the origins and now i just don't care anymore. I've seen even talented developers using term "native token" about their incentives in L1. At that point i got frustrated and decided that this is not worth my time anymore so i completely stopped trying to preach the origins to everyone.

People have been using name shitcoins and memecoins more often then meme tokens or shit tokens so i am assuming it have been a lost battle for a while now. I don't really care. People who care understand the difference and people who don't care... Well i don't care if they do. It's not like they have even any say in the matter.

Why don't you care? Shouldn't fellow forum members be mutually beneficial to one another ?, so as to create a forum environment full of knowledge and understanding. I feel the warmth of the forum all this time, I think we should care about each other, right?

You are confusing caring enough to be enthusiast about it. How is it beneficial to anyone if keep on correcting people when they are not the ones who don't care. And honestly one word doesn't change anything. While history of the words is important "coins and tokens" were made up words in the first place. They were used because there were really no alternatives, even before tokens came people thought we should call them colored coins.

I rather speak about L1 and L2 projects, and some aren't that clear so i wait for the new terms to arise. Those are way more describing anyway and you don't have to explain to everyone what are coins vs tokens. I used to care way more, now it doesn't really matter to me.

[darewaller]

I have accepted that language changes. I used to get arguments about the origins and now i just don't care anymore. I've seen even talented developers using term "native token" about their incentives in L1. At that point i got frustrated and decided that this is not worth my time anymore so i completely stopped trying to preach the origins to everyone.

People have been using name shitcoins and memecoins more often then meme tokens or shit tokens so i am assuming it have been a lost battle for a while now. I don't really care. People who care understand the difference and people who don't care... Well i don't care if they do. It's not like they have even any say in the matter.

Why don't you care? Shouldn't fellow forum members be mutually beneficial to one another ?, so as to create a forum environment full of knowledge and understanding. I feel the warmth of the forum all this time, I think we should care about each other, right?

Keep it cool buddy. I think he is not referring to you. What you did there was still helpful for some who are still new in crypto or even to the veterans who didn't know yet the difference between the two but of course, as long as you did your research first and found out that there is no existing thread yet about this one. You guys are right, so many people often mistaken coins with tokens.

@o48o already gave a sample in the form of meme coins and shit coins. I think I know the reason on why they got used to it. Might started with DOGE because DOGE was a coin and not a token but it wasn't a big deal as saying that Bitcoin is a token. Many people will surely be offended by that.

[rat4]

Nowadays I tend to use terms a base token and an application token, while in a ledger structure context it's the coin.

For example,
A staking token is a base token that is used to reward a participation in a proof of stake consensus.
But,
A coin [of the staking token] keeps a record of a sender public key for a purpose of cold staking.

War. War never changes.

[yazher]

I believe there were already topics concerning this one but most of the users don't have any time to search about it and it would be best to have a new description of it since we now have things called NFT and others. Some people don't really want to know and to distinguish between these two because they thought it was just some small differences but the reality will gonna shock them when they join bounty campaigns since most of the coins are the ones that always have some value and tokens are mostly not real and their developers often leave the project. If you want to have a high chance of getting a profit, you need to always check whether the rewards are coins or tokens.

[danherbias07]

Note: I created this topic because I still see many people calling TOKENS as COINS, even though they are not the same. Hopefully with this short thread, we can understand the difference better.

I don't worry about this anymore. I think I got used to other members who confuse them and sometimes I do too, not being a hypocrite.
Someone already posted about this topic in the past explaining the same things but it's hard to dig them out again. That was when many ICOs are being created under the ERC20 of the Ethereum which are what we call tokens.
As of today, new investors don't really care about this anymore but I think it's a good thing to refresh them about the difference between these two things.
That way, they will know that the other one is like a rental project while the other one is the owner of it.
But, I don't think it's not much important anymore for them as the number of tokens keeps on growing and the demand versus supply rule is being neglected due to hype.

[Xal0lex]

Note: I created this topic because I still see many people calling TOKENS as COINS, even though they are not the same. Hopefully with this short thread, we can understand the difference better.

For many people, it is no longer fundamentally different whether they are looking at a token or a coin. In many discussions, I often see that people call everything tokens, simply because it is convenient for them. In technical terms, of course, there is a difference, but from the point of view of a user, investor, speculator, etc., there is no special difference in calling ETH. Call it a token or a coin. I assume that the word token has become a kind of household name, which is how any cryptocurrency is now called in ordinary discussions.