Cryptocurrency sites like Kriptomat tend to use the terms “coin” and “token” interchangeably, but in fact, there is a technical difference.
Both coins and tokens are denominations of crypto funds. When you want to say how much fiat currency you have in your pocket, you say you have 20 pounds or 30 euros. When you want to say how much cryptocurrency you have, you say you have 12 Ether or 0.05 Bitcoins or 15 Litecoins.
As units of cryptocurrency, “coin” and “token” mean exactly the same thing.
The difference is technical. Coins are the native cryptocurrency of the blockchain they run on. Bitcoin is a coin because it runs on the Bitcoin blockchain. Ether is a coin because it runs on the Ethereum blockchain. Tether is a token. The token maker created it to run on Ethereum, not on its own blockchain. Cardano is a coin because it runs on its own blockchain, while Uniswap is a token that runs on Ethereum.
Ethereum is the blockchain-of-choice for most tokens because of its ability to run smart contracts.
In addition to cryptocurrency coins and tokens, the world has seen the rise of non-fungible tokens. An NFT is a unique digital entity that is not currency. All NFTs are tokens, not coins. But not all tokens are NFTs.
NOTE
This text is informative in nature and should not be considered an investment recommendation. It does not express the personal opinion of the author or service. Any investment or trading is risky, and past returns are not a guarantee of future returns. Risk only assets that you are willing to lose.
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