Coins and tokens are two terms commonly used in the context of cryptocurrencies and blockchain technology. While they share some similarities, there are distinct differences between them. Here’s a breakdown of the key differences:
- Nature: Coins are native digital currencies that operate on their own independent blockchain networks. They are created with the purpose of being a medium of exchange, store of value, or unit of account. Examples of coins include Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC).Tokens, on the other hand, are digital assets that are built on existing blockchain platforms, such as Ethereum or Binance Smart Chain. Tokens are created using smart contracts and are designed to represent a particular asset, utility, or functionality. They rely on the underlying blockchain’s infrastructure for their existence. Examples of tokens include ERC-20 tokens (e.g., Tether (USDT), Chainlink (LINK)) and BEP-20 tokens (e.g., Binance Coin (BNB), PancakeSwap (CAKE)).