How do cryptocurrency tokens and coins differ?

1 answers

• May 08, 2022 · 3 years ago
  At BYDFi, we often get asked about the difference between cryptocurrency tokens and coins. The main distinction lies in their purpose and underlying technology. Coins, like Bitcoin and Ethereum, are standalone currencies with their own blockchain networks. They are used for transactions and as a store of value. Tokens, on the other hand, are built on existing blockchain platforms, such as Ethereum, and represent a specific asset or utility within a project. They can have various functions, like granting access to services or participating in decentralized governance. So, while coins are more like traditional currencies, tokens are like digital assets with specialized functions within a particular project or ecosystem.
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