The terms “coin” and “token” are often used interchangeably in cryptocurrency, but they refer to distinct types of digital assets. Understanding their differences helps investors, developers, and users navigate the crypto ecosystem more effectively.

What Are Crypto Coins?

A crypto coin is a digital asset that operates on its own blockchain. It serves as a store of value, a medium of exchange, or a unit of account, similar to traditional money. Coins are typically used for transactions, mining rewards, or network security.

Key Features of Coins:

Native to a Blockchain – Coins run on their own blockchain networks. For example:

• Bitcoin (BTC) runs on the Bitcoin blockchain.
• Ether (ETH) runs on Ethereum.
• Solana (SOL) runs on the Solana blockchain.

Used for Transactions & Network Fees – Many coins facilitate transactions, pay gas fees, or secure networks through staking.

Typically Used for Payments – Many cryptocurrencies, like Bitcoin and Litecoin, are designed as digital money for purchasing goods and services.

What Are Crypto Tokens?

A crypto token is a digital asset that is built on top of an existing blockchain rather than having its own network. Tokens often serve functional roles, such as governance, rewards, or access to decentralized applications (DApps).

Key Features of Tokens:

Built on an Existing Blockchain – Tokens do not have their own blockchain but use one like Ethereum or Solana. Examples include:

• USDT (Tether) – A stablecoin operating on Ethereum and other blockchains.
• UNI (Uniswap) – A governance token for the Uniswap decentralized exchange.
• MATIC (Polygon) – Used to scale Ethereum transactions.

Used for Specific Functions – Tokens can represent:

• Stablecoins (e.g., USDC, DAI) for low-volatility transactions.
• Utility Tokens (e.g., BNB, LINK) for accessing blockchain services.
• Governance Tokens (e.g., AAVE, UNI) for voting on protocol decisions.

Easier to Create – Tokens can be developed using smart contracts, making them more accessible for projects launching on existing blockchains.

Coins vs. Tokens: A Side-by-Side Comparison

Feature	Coins	Tokens
Blockchain	Runs on its own blockchain	Uses an existing blockchain
Use Case	Currency, transaction fees, security	Governance, rewards, utility, stablecoins
Examples	BTC, ETH, SOL, ADA	USDT, UNI, MATIC, SHIB
Creation	Requires a new blockchain	Created using smart contracts
Primary Function	Acts as money	Represents assets, voting power, or services

Which One Is Better?

Neither coins nor tokens are inherently “better”—it depends on their use case. Coins are ideal for decentralized payments and blockchain security, while tokens offer flexibility for DApps, DeFi, and governance. Understanding their differences is crucial for navigating the crypto space.