Cryptocurrency has gained lots of attention and popularity in the past decade and can be broadly classified into two categories: Crypto Coins and Crypto Tokens.
The major distinction between Crypto Coins and Crypto Tokens is that the former has its blockchain, whereas the latter is created through another pre-existing blockchain.
However, due to the similarities between Coins and Tokens, these terms are used interchangeably many times.
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Key Differences –
Crypto Coins –
- Crypto coins are a type of Cryptocurrency that has its own blockchain. Crypto coins are used to buy Crypto tokens.
- A Crypto coin is a form of currency.
- Crypto coins are largely used for buying and selling things.
- Crypto Coins are more expensive than Crypto Tokens.
- Examples include Bitcoin, Binance Coin, Cardano, etc.
Crypto Tokens –
- Crypto Tokens do not have their own blockchain. They are created with the help of a smart contract.
- Crypto Tokens can not be used to buy Crypto Coins.
- Crypto Tokens are a form of digital or virtual assets.
- Crypto Tokens are largely used for
- Crypto Tokens are comparatively more affordable than Crypto Coins.
- Examples of popular Crypto Tokens include Basic Attention Token (BAT), Bancor (BNT), BNBBNB, THORchain (RUNE), Tether (USDT), USD Coin (USDC), Glitzkoin (GTN), Wirex Token (WXT), Status (SNT),
Comparison Between Crypto Coins And Crypto Tokens
| Parameter | Crypto Coins | Crypto Tokens |
|---|---|---|
| Meaning | Crypto coins are a type of Cryptocurrency that have their blockchain. | Crypto Tokens do not have their blockchain, they are created with the help of a smart contract. |
| Nature | These Coins are a form of conventional currency stored digitally or virtually. | These Tokens are a form of digital or virtual assets. |
| Types | Crypto Coins do not have any subtypes. | Crypto Tokens can be classified into Security Tokens, Utility Tokens, Governance Tokens, Platform Tokens, and Transactional Tokens. |
| Blockchain | These coins have a blockchain of their own. | These Tokens exist on pre-existing blockchains of pre-existing coins. |
| Price | These coins are more expensive than tokens. | These tokens are comparatively more affordable than crypto coins. |
| Convertibility | Crypto Coins can not be converted into Crypto Tokens. | Crypto Tokens can be converted into Crypto Coins. |
| Creation Process | Creating Crypto Coins is a very difficult process. | Creating Crypto Tokens is a comparatively easier process. |
| To buy one another | Coins can be used to buy other tokens. | Tokens can not be used to buy coins. |
| Uses | Coins are generally used to act as a medium of exchange. | Tokens are used in governance, transactions, as utilities, etc. |
| Examples | The examples of popular Crypto Coins include Bitcoin, Ethereum, Tether, USD Coin, Dogecoin, Binance Coin, etc. | The examples of popular Crypto Tokens include Basic Attention Token (BAT), Bancor (BNT), BNBBNB, THORchain (RUNE), Tether (USDT), USD Coin (USDC), |
Major Differences Between Crypto Coins And Crypto Tokens
To understand the difference between Crypto Coins and Crypto Tokens, it is important to first understand what Crypto Currency is.
What exactly is Cryptocurrency?
Cryptocurrencies, like our conventional currencies, are a form of currencies that operate at an International Level and exist on the Internet.
That is why Cryptocurrencies are also known as Digital Assets or Digital Currencies. These digital currencies are called “Crypto” cause Cryptography backs up these digital currencies.
Since any central unit does not govern cryptocurrencies, how do Cryptocurrencies keep track of their transactions? The answer is through Blockchain Technology. This technology is the very reason Crypto exists.
It is responsible for keeping track of all the Crypto transactions. Some of the most famous cryptocurrencies are Bitcoin, Ethereum, Tether, Cardano, USD coin, Stellar, Polka Dot, Dogecoin, Litecoin, Solana, etc.
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Features of Cryptocurrencies –
- Cryptocurrency transactions are very fast as compared to our traditional currencies’ transactions.
- Cryptocurrencies are not governed; criminals widely use them for illegal uses.
- Cryptocurrencies make it possible for one to stay Anonymous in the digital Crypto world.
- These currencies are not legalized everywhere.
- There are no middlemen involved in Crypto Transactions.
- All of the Crypto transactions are recorded with the help of Blockchain Technology.
- Crypto comes with a “Virtual or Digital Wallet” that helps in keeping currencies.
- These currencies are not legalized everywhere.
- It is very easy to lose your digital wallet.
- Users of Cryptocurrencies can be vulnerable to cyber-attacks and scams.
What exactly are Crypto Coins?
Crypto Coins are a form of Cryptocurrency that has its own blockchain. Crypto Coins were created to serve the very purpose of Crypto Currency, i.e., act as money for purchasing and selling.
Thus, there are not many differences between conventional money and Crypto Coins. The only difference that exists between them is that Crypto Coins are virtual or intangible, but Conventional money is tangible.
A Crypto Coin’s blockchain can become the blockchain of two or more Crypto Tokens, but a Coin’s blockchain can not become the blockchain of any other Crypto Coin.
Therefore, it is fairly valid to question how crypto coins are created. The answer is simple, through the process of mining.
The mining process involves the creation of new coins and verifying the transactions and blockchains arising due to the creation of new coins.
There are two ways one can do mining: a Proof of work system and a Proof of Stake. Let us see what these are.
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Facts about Proof of work system and Proof of Stake –
In the Proof of work system, people are fighting all over the world to decode or solve a puzzle. But, wait! This does not end here. Whosoever wins in solving a puzzle gets to verify that transaction and update the blockchain to earn some amount of Crypto.
On the other hand, In Proof of stake, random users are chosen and are asked to verify the transaction and add the recent transactions to the blockchain. If they can do so, they get awarded some amount of Crypto.
Both methods are used to create a new blockchain for a new coin. Then, when the people are able to verify the transactions, their systems are added as a part of the new blockchain. And whosoever wins gets some amount of Crypto.
What exactly is Crypto Tokens?
Because the terms Crypto Coins and Tokens sound like synonyms, they are used interchangeably many times, but a Crypto Token is completely different from a Crypto Coin. Crypto Tokens do not have a blockchain of theirs.
Instead, they are created through the existing blockchains of existing Crypto Coins. These tokens are generally not used as digital or virtual money but as virtual assets.
The process of creating Crypto Tokens is known as Tokenization. Creating Tokens is easier than creating Coins, as these tokens do not need a separate blockchain.
One can create thousands of Crypto Tokens from a single blockchain. But one has to follow the rules and regulations of the very blockchain one wishes to create a crypto token on.
Crypto Tokens can be broadly classified into five categories: Utility Tokens, Security Tokens, Transactional Tokens, Governance Tokens, and Platform Tokens. Crypto Tokens are generally used for Utility, Transactions, Governance, etc.
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Following are the examples of Crypto Coins with their blockchain and the Crypto Tokens existing on that blockchain –
| Blockchain | Tokens |
| Ethereum | Basic Attention Token (BAT), Bancor (BNT), OmiseGO (OMG), Status (SNT), TenX (PAY), etc. |
| Binance | BNBBNB, THORchain (RUNE), USDD, STEPN (GMT), PancakeSwap (CAKE), etc. |
| Solana | Tether (USDT), USD Coin (USDC), Serum (SRM), ConstitutionDAO (PEOPLE), Raydium (RAY), etc. |
| Stellar | Glitzkoin (GTN), Wirex Token (WXT), SIX (SIX), Newscrypto (NWC), Mobius (MOBI), etc. |
Contrast Between Crypto Coins And Crypto Tokens
Meaning
- Crypto Coins – Crypto coins are a type of Cryptocurrency that have their individual blockchain.
- Crypto Tokens – Crypto Tokens do not have their own blockchain. Instead, they are created with the help of a smart contract.
Nature
- Crypto Coins – Crypto Coins are just like a conventional form of money. The only difference is Crypto Coins exist in a digital or virtual world.
- Crypto Tokens – Crypto Tokens are a form of digital or virtual assets.
Types
- Crypto Coins – There are no types of Crypto Coins.
- Crypto Tokens – Crypto Tokens can be broadly classified into five types: Utility Tokens, Security Tokens, Transactional Tokens, Governance Tokens, and Platform Tokens.
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Types of Crypto Tokens –
- Security Tokens – Security Tokens are those tokens created to denote the possession of other valuable assets.
- Utility Tokens – Utility Tokens are used to give their holders a way to utilize their rights in a blockchain system. For example, it could be less transactional fees than others, discounts on their products and services, etc.
- Transactional Tokens – As the name suggests, Transactional Tokens are used for transaction purposes. They are similar to Coins and are used to exchange several things.
- Governance Tokens – Governance Tokens are used to allow their holders the right to have their say or right to vote in the different blockchain projects.
Uses
- Crypto Coins – Crypto Coins are only used to act as a medium of exchange, i.e., to buy, sell, and trade.
- Crypto Tokens – Crypto Tokens are used
Blockchain
- Crypto Coins – Each and every Crypto Coin has its own blockchain. No two coins can share one blockchain.
- Crypto Tokens – Thousands of Tokens can be created with the help of a single blockchain.
Price
- Crypto Coins – Crypto Coins are more expensive than Crypto Tokens.
- Crypto Tokens – Crypto Tokens are more affordable than Crypto Coins.
Convertible
- Crypto Coins – It is impossible for a Crypto Coins to be converted back into a Crypto Token.
- Crypto Tokens – Crypto Tokens can be easily converted into Crypto Coins.
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Did you know that the crypto coins such as Binance Coin (BNB), Tron (TRX), and Zilliqa (ZIL) started out as Crypto Tokens on the Ethereum Blockchain and later invented their own blockchain and became Crypto Coins?
Creation Process
- Crypto Coins – Creating a Crypto Coin is generally more complex than creating Crypto Tokens, as Creating Crypto Coin demands the creation of a new blockchain, which becomes an overall very complex and hectic process.
- Crypto Tokens – The process of creating Crypto Tokens is a comparatively easier process as one does not have to create an entirely new blockchain.
One can easily create new Tokens on the existing blockchains, but it is important to remember the rules & regulations of the blockchain that one is choosing.
Purchases
- Crypto Coins – Crypto Coins can be used to buy new Crypto Tokens.
- Crypto Tokens – Crypto Tokens can not be used to buy new Crypto Coins.
Examples
- Crypto Coins – Examples of popular Crypto Coins include Bitcoin, Ethereum, Tether, USD Coin, Dogecoin, Binance Coin, XRP, Cardano, Polka Dot, Litecoin, etc
- Crypto Tokens – Examples of popular Crypto Tokens include Basic Attention Token (BAT), Bancor (BNT), BNBBNB, THORchain (RUNE), Tether (USDT), USD Coin (USDC), Glitzkoin (GTN), Wirex Token (WXT), Status (SNT), TenX (PAY), etc.
Conclusion
The terms Crypto Coins and Crypto Tokens are widely used in the crypto world yet, on several occasions, are used interchangeably. Crypto Coins are a form of Cryptocurrency that has their own separate blockchain.
These coins are more expensive than Crypto Tokens and serve as conventional currency in a virtual mode. On the other hand, Crypto Tokens are a form of Crypto Currency that does not have their own separate blockchain.
These are created with the help of the blockchains of existing coins. These tokens are cheaper than coins and have several uses.
Frequently Asked Questions (FAQs)
Q1. What is meant by Cryptocurrency?
Cryptocurrencies are digital currencies that operate on an international scale, being the medium for purchase and sales.
Q2. What is the difference between Utility Tokens and Governance Tokens?
The difference between Utility Tokens and Governance Tokens is that the former gives its holders a right to utilize their ownership by giving discounts, early access to the services offered to them, low transaction rates, etc.
On the other hand, Governance Tokens give its users a right to have their say in the decisions regarding a blockchain system.
Q3. What are the major differences between Crypto Coins and Crypto Tokens?
The major differences between Crypto Coins and Crypto Tokens are –
1. Crypto Coins have their own separate blockchain, while Crypto Tokens have pre-existing blockchains of pre-existing coins.
2. Crypto Coins are a form of virtual currency, whereas Crypto Tokens are a form of virtual assets.
3. Crypto Tokens can be converted into Crypto Coins, but Crypto Coins can not be converted into Crypto Tokens.
4. Crypto Coins can be used to buy Crypto Tokens, but Crypto Tokens can not be used to buy Crypto Coins.
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Business, marketing, and blogging – these three words describe me the best. I am the founder of Burban Branding and Media, and a self-taught marketer with 10 years of experience. My passion lies in helping startups enhance their business through marketing, HR, leadership, and finance. I am on a mission to assist businesses in achieving their goals.