Crypto Coins and Crypto Tokens: There are some differences between crypto coins and crypto tokens.

The term cryptocurrency has become very common now.

Most people must have read about cryptocurrencies, many people will be aware of crypto trading.

Maybe some of us have even invested in crypto.

By the way, where firm research is needed before investing in crypto, it is also important to be aware of its technical terms.

We often use cryptocurrencies and crypto tokens in the same sense, but in reality there are some fundamental differences between these two and it is important to understand them.

Both of these are digital assets, but cryptocurrencies have their own blockchain, whereas crypto tokens work on an already existing blockchain. 

What is cryptocurrency?

A cryptocurrency is the native currency of a blockchain, that is, its own currency, such as bitcoin or ether.

And it is issued according to the protocol of that blockchain.

Often cryptocurrencies are used to pay transaction fees or to give incentives to users to keep the network safe.

Cryptocurrencies can be used either to buy a product or service or to exchange it with flat currency i.e. Rupee and Dollar.

Apart from this, it also has a store value.

That is, you invested in currency and stored it and then earned a return on it.

Cryptocurrency Value: Do you know how the price of a cryptocurrency is determined?

Understand the complete math here

Cryptocurrencies are decentralised.

That is, they do not run on the trust of any one institution or authority.

They work on the blockchain and every transaction is accounted for on a public ledger.

This helps in fair enforcement of the rules.

These crypto coins use cryptography – an encryption technique – to keep these networks and the entire crypto structure secure.

What is a crypto token?

Crypto tokens and cryptocurrencies have many similarities, but they are also different from each other.

For example, Ethereum is a blockchain and its native token is Ether (ETH).

But many other tokens – DAI, LINK, and COMP – also work on the Ethereum blockchain.

Like cryptocurrencies, tokens also have a value and can be exchanged, but the token itself can also act as a physical asset, that is, an asset, or a utility or service.

For example, some crypto tokens represent real estate or art.

The process of creating and assigning tokens is called tokenization.

There is confusion about investing in cryptocurrencies and gold, know which investment can give more profit?


The crypto industry is growing very fast, so the popularity and value of tokens will increase in the same way, people will continue to assign value to them according to the property.

In simple terms, tokens can be called a 'smart contract'.

These 'contracts' can represent any digital or physical asset.

Crypto tokens follow certain rules and have a blockchain address.

And whoever has the private key of that address, only he will be able to access it and he will be called the owner or custodian of that token.

Conclusion


Very often we use the terms crypto coins and crypto tokens in the same sense, but it is clear from the above mentioned difference that these two are also different from each other.

In such a situation, if you want to talk about both together, then you can use the term crypto asset for them.

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