One of the most repeated questions in crypto is what is the difference between tokens and coins and on today’s blogger have the answer ready for you:
we use the term coin and token interchangeably when we talk about cryptocurrencies out there in the world today, and in reality, the difference is pretty simple but we should try and use the right terminology going forward:
We are going to try our best to do that in these blogs although it’s very difficult admittedly.
What is the difference between a cryptocurrency coin and a cryptocurrency token:
What is a coin:
you can store your Bitcoin and hold it almost like a bank account and then you can use it to exchange as a medium of exchange like a currency.
now there are a lot of other examples of this and there are even cryptocurrencies out there that kind of tow the line between these two coinsand a token and then there are some that blend both but let’s talk about what a token is:
What is a token:
If you’re trying to store you know the tokenized version of your gold it is valued and you are storing value but that token itself doesn’t have value it’s the physical gold that has the value just a digital representation so that’s the difference.
A token is a digital representation of an asset that can be exchanged using the blockchain network so it’s not necessarily a store of value even though it sort of is in a way if you think about it?
It’s a little bit cloudy between the two but the references are still there a coin is an exchange of value or a store value and a token is a digital asset that represents something in the physical world or something like IP.
We always want to think about that going forward when we’re looking at different cryptocurrency projects because the end of the day cryptocurrencies do fall into several different categories that also help us evaluate how useful a cryptocurrency itself is whether it’s a coin or whether it’s a token what is it used for how is it intended to be used as it supposed to accrue in value is it supposed to stay relatively close to a $1 US peg like understanding that is important to evaluating something for investment so that’s why I
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