Cryptocurrency Tokens & Cryptocurrency Coins Are Not The Same!!!
We unquestionably have come across a drastic digital transformation. Our previous generation went up and down the streets to surf the internet in a browsing center. We are lucky to use them from our phones, simply using our smartphones.
A blockchain exchange development company can lead you to build a successful business apt for this digital epoch. In this tech era, digital assets have gained rapid popularity with the internet evolution. However, this digital space also makes people get confused between different entities. Let us discuss one of them here.
Cryptocurrency is something we all are interested in, and it is one of the quickest ways to yield huge returns within a short span. This extends further interest in it.
People these days buy crypto coins; no, it is crypto tokens.
Wait!! – Are crypto tokens and crypto coins the same? – Solve the riddle with us!
Cryptocurrency Coin - What is it?
Cryptocurrency or crypto coin is a digital asset belonging to the native blockchain network. These coins can be stored, traded, or swapped by network users as a medium of exchange. They do not have a sole purpose for crypto transactions but also for incentivizing network users.
Characteristics of Crypto Coins
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Cryptocurrency is decentralized, and thus, there is no central governance
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Cryptography is employed to secure the system
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If a payment goes wrong, there is no way to reverse the transaction.
Cryptocurrency Token - What is it?
Crypto tokens are digital assets deployed on a blockchain using smart contracts. Tokens have slight similarities with coins present on the same blockchain. Also, crypto tokens have different creation methods and standards. ERC721 and ERC20 are the two most popular crypto standards.
Characteristics of Crypto Tokens
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Cryptocurrency tokens are for the global audience, and one can trade them across countries.
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Smart contracts play an essential role in ensuring the tokens’ traceability, immutability, security, and transparency.
Differences Between Crypto Coins & Crypto Tokens
Now, you would have understood that crypto coins and tokens are different. However, we have given you more in-depth information about its dissimilarities in the section given below.
By definition:
Crypto coin is the native currency of their own blockchain. On the other hand, different crypto tokens can be created and traded in a blockchain network. The latter is crafted on an existing blockchain.
By usability:
Crypto coins are the digital version of our real-world currency but in a digital form. On the contrary, a crypto token represents a particular digital asset or utility.
By mining:
Crypto tokens are not meant for the minting process. Token creators often distribute them as a utility. Contrarily, cryptocurrency coins can be mined.
By purpose:
Cryptocurrency coins serve as a medium of exchange for trading goods and services. Crypto tokens have numerous purposes, which include DeFi, gaming, commerce, etc.
Examples:
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Crypto coins are similar to USD. Examples are Bitcoin and Ethereum.
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Crypto tokens are similar to real-world gift vouchers.
End Notes
So far, you might have thought that crypto tokens and crypto coins were the same. We hope this blog might have helped you understand the thin-line difference between both of these entities. You can consult a blockchain exchange development company to create your own coin or token.
