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Major Differences Between Cryptocurrency Coin and Token.

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 enthusiastcs know about Tokens existance.

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

Independent.

Types Of Blockchain

Coins are independent, because they have their own blockchain to function.

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

On the other hand, 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.

Creating.

Prosess 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 new Coin.

The best example is Ethereum based tokens (ERC-20) 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!.

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 be used as coins but they have broader 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.

Mining.

Mining

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

You already knows that tokens are build upon the coin blockchain that’s why they dont have mining power.

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 Soft Fork.

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

Above are some major differences between cryptocurrency Coin and Token.

But here in crypto world some Coin are fee like a Token.

For example, Ripple. In my opinion, Ripple is a coin because it had its own blockchain network.

One major difference is it is not mineable, rather than mining, Ripple works by consensus.

I am not going to write about Ripple working prosess, but majority 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 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 is shows a Ripple details.

Ripple details

This image is shows Bitcoin details.

Bitcoin details

Above image you can clearly able to see which coin is mineable and which is not, also you can find out which is coin and which is token.

In below image you can see details about Augur token.

Augur details

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

Still in confuse??

If you’re still in confuse 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 internet then 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 connect to internet is called as Coins in crypto space and software or app that installed on devise is like a Token.

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

Conclusion.

From 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 crypto world bigger and better.

Because Coin is providing a Blockchain platform for creators to use this revalutionary 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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