What's the difference between a token and a coin in cryptocurrency?
By looking up different currencies, you will undoubtedly recognize that some are called coins (which is the most common way), and some are called tokens. Cryptocurrency can be either one or the other. Firstly, as you might know already a Cryptocurrency is called Cryptocurrency, because it requires solving cryptographic tasks to validate the information.
“Coins” are the most represented kind of Cryptocurrencies. In general, a coin has its very own underlying technology, the blockchain. That means every currency which is not built on top of another blockchain and uses its source code is defined as a coin. For example Bitcoin, Litecoin, Dogecoin, and so on.
(In theory, a token is not an altcoin, but is generally declared as such.)
“Tokens” on the other hand are built on top of another Cryptocurrency, such as Ethereum or NEO. Tokens are used to compensate the underlying technology for their services, such as the mining power to approve transactions or the system as a whole. Therefore, tokens are often called “fuel” for platforms. Ethereum, for example, has erc20 tokens, which are the “fuel” of the Ethereum blockchain.
(In case you want to see all of the coins and tokens you can go to www.CoinMarketCap.com, which is the place you can check all the coin values, and filter between “all”, “coins” and “tokens”.)
0 Comments