What is the difference between a crypto coin and a crypto token.

in LeoFinance2 years ago

Modern crypto world: crypto coin vs crypto token.

Today more and more people are getting into cryptocurrency market. Majority of the new comers enter the market with the expectation of getting rich in a short time with minimum investment, In most of the cases this new comers are left disappointed. Most of the time these new comers don't understand the most basic concept. Yesterday was giving little crypto advice to one of my friend, i told him to invest in coins rather than token, for which he asked what difference does it make if it's a coin or a token? after all it's all cryptocurrency. This is when i released that most of the new comers don't know the difference between a crypto coin and a crypto token. This encouraged me write this small piece of blog to differentiate between a cryto coin and a crypto token.

To understand the difference between a crypto coin and crypto token its very important to know what is a blockchain.

▁ ▂ ▄ ▅ ▆ ▇ █ 𝕊𝕠, 𝕎𝕙𝕒𝕥 𝕚𝕤 𝕓𝕝𝕠𝕔𝕜𝕔𝕙𝕒𝕚𝕟?. █ ▇ ▆ ▅ ▄ ▂ ▁


Blockchain is a technology which is in use for more than last 30 years, however the blockchain came to the the public limelight only in 2012 after bitcoin gained popularity even though bitcoin came to existence in 2009. So in simple words for a layman to understand, blockchain is a technology where any data are stored in blocks and each block is connected to the previous block of data and to the next block of data and the stored data cannot be modified, edited or tampered with because the stored data are protected by another technology named cryptography. So in short the bitcoin works on the blockchain but many newbies think bitcoin is blockchain. Having said that the question is hand is the difference between crypto coin and cyrpto token and lets dive in to know thing the diffence and we can talk about blockchain and bitcoin in detail in another post.

▁ ▂ ▄ ▅ ▆ ▇ █ 𝕊𝕠, 𝕎𝕙𝕒𝕥 𝕚𝕤 𝕒 𝕔𝕣𝕪𝕡𝕥𝕠 𝕔𝕠𝕚𝕟?. █ ▇ ▆ ▅ ▄ ▂ ▁
As we saw above, the whole crypto market we are in today works on the principle of blockchain. Any experienced programmer can create their own blockchain. When ever someone is making a new blockchain they are on their own and independent of any other blockchain. Technically they are their own boss . We can say a blockchain is the infrastructure. For better understand lets say the blockchain is your “HOME” or an “OFFICE”. So to have your own house or an office is not so simple, they need a good investment and experienced people to take care of the property and to do the regular maintenance to keep the property in good condition. Like wise keeping a blockchain is expensive and need financial power and skilled man power to keep the chain in healthy condition and to do regular maintenance. So any crypto asset issued directly by the blockchain owners are named crypto coin.

Some prime examples of crypto coins are

  • Bitcoin,
  • Etherium,
  • Cardano,
  • Hive and
  • Ripple


▁ ▂ ▄ ▅ ▆ ▇ █ 𝕊𝕠, 𝕎𝕙𝕒𝕥 𝕚𝕤 𝕒 𝕔𝕣𝕪𝕡𝕥𝕠 𝕥𝕠𝕜𝕖𝕟?. █ ▇ ▆ ▅ ▄ ▂ ▁

In crypto coin we learned that its expensive and to built a blockchain and how we need more experienced people to do the maintenance. As we had seen how expensive a house can be or an office can be. What if a person without a very strong financial background want to buy a house? What if he don't have enough finance or experience to buy a own house?? For this person the easiest way is to take a house on rent. So by taking a house on rent he has a house to eat and sleep but at an expense of 1/100 of buying a new house and he dont have to worry about the maintenance of the house. Like wise what if a person with no experience in blockchain or no infrastructure want to build his own blockchain based projects?? Just like the other person who coudnt buy a house, rented a house, like wise this person can also use the existing blockchain of a user and in that blockchain he can run his application. So this programmer can also use the facility of the blockchain and the maintenance of the blockchain and other aspects will be taken care of the owner of the parent blockchain. Thus any crypto assets issued by the projects that runs on third party blockchain network by paying the owner of the blockchain a certain about of fee as per their terms and conditions persons are called crypto token.

Some prime examples of crypto tokens are

  • Basic Attention Token, which is a ERC-20 token which runs on etherium blockchain.
  • WIN tokens are ERC-20 token which runs on Tron blockchain.
  • Chainlink's LINK token is an ERC677 token.


What are these ERC-20 and ERC-677 ?? we can see them in a different blog.

Hope everyone enjoyed reading the blog and hope the new commers understood the difference and hope it is of some kind of use to them and thank you all for your valuable time.

Please feel free to give me your comments.



Edo Calvin !! Mannipaya!!