If you are crypto investors or just crypto enthusiast then, you heard about Tokens.

Everyone is familiar with Bitcoin and almost cryptocurrencies but, only crypto enthusiasts know about Tokens existence.

If you already know about Tokens and still confusing what actual difference between Tokens and Cryptocurrency Coins then, this article is for you.

Ok, now let’s dive into actual differences.

1. Independency.

Coins are independent because they have their blockchain to function.

Like Bitcoin and Ethereum both have their blockchain for working but, Ethereum is open to creating a token using their blockchain.

On the other hand, the Token is depended upon Coin blockchain to function.

Token creation option is in the hand of Coin also they can set some parameters to create a Token.

2. Creating.

The Process of creating an entirely new blockchain and launching a coin is typically considered to be more complex and time-consuming.

But creating a token is easier than building a new Coin.

The best example is Ethereum based ERC-20 tokens. If you want to create an ERC-20 token than you just need to develop a smart contract if that contract passes some parameters than you are the creator of a new token within 2 or 3 days!.

3. Function.

Coin main function is. It is a medium of exchange like your paper money.

You can use coins to buy or sell any goods or services.

Tokens can use as coins, but they have broad usages than a coin.

For example, a token can perform the functions of the digital asset, represent a company’s share, give access to the project’s functional and many more.

4. Mining.

Obviously, when a coin has it’s own blockchain network then it is open to everyone to mine that coin.

You already know that tokens built upon the coin blockchain that’s why they don’t have mining power.

5. Fork.

Coins can be forked.

That means coins blockchain network can be split in.

Basically, there are 2 types of fork one is Hard Fork another is Soft Fork.

However, the token is built with the help of coin blockchain that’s why token can’t be forked but, if a token creator wants to convert the token to coin then, they can do that by exiting coin blockchain.

Above are some major differences between cryptocurrency Coin and Token.

But here in the crypto world, some Coins are felt like a Token.

For example, Ripple. In my opinion, Ripple is a coin because it had its blockchain network, but one major difference is it is not mineable, rather than mining, Ripple works by a unique distributed consensus mechanism.

I am not going to write about Ripple working process, but the majority of people confuse about tokens and coins like in ripple case.

An easy way to see which is Token and which is Token is coinmarketcap.com website.

This website tracks all details about coins and tokens, with the help of that website you can check full details about coins like Ripple and also it shows it is Coin or Token and Mineable or Not.

Below image shows a Ripple detail.

This image shows Bitcoin details.

From the above images, you can able to see which coin is mineable and which is not also you can find out which is a coin and which is token.

In the below image, you can see details about Augur token.

With the help of coinmarketcap, you can easily find out which is Coin and which is Token.

Still in confuse??

If you’re still in confuse with what is a difference between coin and tokens then, I have a simple example for you to explain the difference.

Let’s imagine Blockchain is the Internet. If you want to connect to the internet, you need a device like Mobile or PC, and then you need a browsing software or app to connect your device to the internet.

Devices you use to connect to the internet is called Coins in crypto space, and software or app that installed on the device is like a Token.

One thing is, coins have their Blockchain, but only one Internet connects the whole world.

Conclusion.

From the below examples, I believe that you’re able to find which are the tokens in the crypto world and understood the difference between Coin and Token.

There is no big difference between coin and tokens, but both are needed to grow the crypto world bigger and better.

Because Coin is providing a Blockchain platform for creators to use this revolutionary technology to help mankind.

That’s why most of the Blockchain startups are using Token as their financial fuel.

If you have any suggestions or any points to add then feel free to mentions those in comments.

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