Cryptocurrency: Coin and Token (The Difference You Didn't Know About)
Introduction
For some time now I have been seeing these two words coin and token as one, and I know most of us are in the same boat. When explaining something relating to cryptocurrency we often classify a coin and a token as the same thing but unfortunately they have their own classification. Getting a coin or token is a decision you take when you want to make a cryptocurrency, however, one is easier to get than the other.
Creating a cryptocurrency is not actually easy because you have to consider some basic stuff like the choice of blockchain to use because this is what they rely on, the consensus mechanism like should it be proof-of-stake or proof-of-work, their tokenomics and their utility etc. There are different crypto projects out there that it has looked easy to develop, well it can be easy though but what you should know is that it takes a lot of hard work, time and dedication to come up with one.
Difference between a Coin and a Token
| Coin | Token |
|---|---|
| A coin requires its own blockchain | while a token is built on a network that is already existing. |
| Creating a coin is usually done by a team of developers due to its complexity | Unlike a token, anyone can create it single-handedly despite it still needs some good knowledge about it |
| Creating a coin requires an expert with good knowledge and takes effort | Creating a token requires less time and effort and can be created easily |
| In terms of cost creating a coin is very expensive | developing a token is relatively cheap and that's why it's very easy too |
| It can be used for products | It can be used for services |
Summary
Like I said earlier there are times in which some of us have classified a token and a coin as one or mistook one for the other, however, I believe the above difference listed might have helped clear the air.
The token and coin are both cryptocurrencies and they both have values that can be used for different purposes and both can be used to get one another.
Examples of coins are Bitcoin and Ethereum while examples of tokens are Pancakeswap, Uniswap, Shiba Inu, Tether and pretty much everything that isn’t Bitcoin and Ethereum because all other cryptocurrencies are built on a pre-existing network which makes them tokens.
Posted Using LeoFinance Beta
https://twitter.com/Sweetboydave2/status/1560084174316388352
The rewards earned on this comment will go directly to the people( @attentionneeded ) sharing the post on Twitter as long as they are registered with @poshtoken. Sign up at https://hiveposh.com.
I've known this since my Steemit days. But good thing you wrote this. Many here, even long-time bloggers from the Steemit days, don't know the difference between the two.
Exactly 💯 some people still think they are one but different names