Understanding the difference between Coin and Token

What is a coin?

  • Bitcoin (BTC) is used and runs on the Bitcoin blockchain.
  • Ether (ETH) is a cryptocurrency that operates and functions on the Ethereum network.
  • Solana (SOL) is a cryptocurrency that operates and functions on the Solana blockchain.

What is a token?

Types of tokens:

Security Tokens

Coin vs Token

  • Tokens do not have a native blockchain, whereas coins do.
  • Because a token sits on an existing blockchain, it is less expensive to generate than a coin.
  • Tokens can eventually become coins if the project creates its own blockchain and migrates it to the new network.
  • Binance Coin, Tron, and Zilliqa are examples of successful migration cases that formerly existed as tokens on the Ethereum blockchain.
  • Coins are typically used as a payment cryptocurrency, whereas tokens serve various purposes.

Conclusion

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