Crypto Coin vs Token: Learn the difference

Crypto Coin vs Token
Crypto Coin vs Token


  • Coins are any cryptocurrency that has a standalone independent blockchain.
  • Tokens are cryptocurrencies that do not have their own blockchain but live on another blockchain.

Now in 2022, Everyone who is an active internet user knows about cryptocurrencies. But, knowing about cryptocurrencies and understanding them are not the same things. There are several terms that you may know just by name but don’t actually understand what exactly it is. In the same way, most people have confusion between crypto tokens and crypto coins. Several people argue that they are the same things. But they are not. There’s a big difference between crypto tokens and crypto coins. In this article, I will try to explain the difference between crypto coins and tokens in an easy-to-understand manner.

What is a crypto coin?

Cryptocurrency coins are created to be used as a currency for buying different goods and services. The most common examples of crypto coins are Bitcoin, Ethereum, Dogecoin, and Monero. A crypto coin operates on its blockchain network to keep a track of all transactions.

There are basically two ways to earn a crypto coin. One is through mining i.e. Proof of Work system. The second way is Proof of Stake. Obviously, you can also trade any other currency to get a crypto coin. When you spend a crypto coin, it doesn’t move but accounts balance changes.

Also see: Best Cryptocurrency Exchanges in India

What is a cyprot token?

Unlike crypto coins, crypto tokens do not have their own blockchain. They operate on blockchains of other crypto coins. For example, there are several crypto tokens including BAT, BNT, & Tether that use the Ethereum blockchain. Like crypto coins, crypto tokens also have their own value and can be traded. Crypto tokens are programmable, permissionless, trustless, and transparent. Tokens are run by software protocols and rely on smart contracts. an array of codes that facilitate trades or payments between users.

Tokens are purchased via ICOs. When you spend a token, it physically moves from one place to another. This is another difference from crypto coins.

The transaction fee of Tokens is also higher than the transaction fee of a crypto coin. Token transfer fee is also paid in some cryptocurrency coins.

Also see: What is Crypto Credit Card?

Wrap Up

I have explained both Coins and Tokens. The primary difference is that Coins have their own blockchain, but Tokens don’t. That means crypto coins operate independently but tokens are built onto a cryptocurrency platform. Tokens rely on smart contracts. Tokens move physically when you transfer them from one person to another person while coin doesn’t.