New York has expeditiously explained the usefulness of the Cryptocurrencies in the form of Tokens and Coins. He has stressed that the entities should be both helpful in social accounting as well as in monetary benefit to the society. Sometimes people often confuse themselves between the coins and tokens. As soon as these both become related to the cryptocurrencies the confusion not only increases but the doubts also scale the new heights. Sometimes people use the term “coin” in place of “token” and sometimes the reverse is also seen.
Also, there are people who use the two names interchangeably without thinking about the confusion and doubts that it will create at a later stage of an important stage of the project. However, there is a very big difference between the two terms i.e., the Crypto coins and tokens. In this article we will be discussing these two entities in a wholesome and expeditious manner so that the confusion about the size of Mt. Everest could be reduced to the scale of a small scalable hill. If you are interested in bitcoin then you can try these bitcoin earning methods
To get to know about the remarkable differences in tokens and coins we must know what they mean in real sense and that too separately. In simple words a coin can be called as nothing but a digital currency such as in the form of Bitcoin and Altcoin. Accordingly, the well-known and most famous cryptocurrency coin is known to us by the name Bitcoin. It is basically based on an again famous technology called Blockchain. In short, a Blockchain is said to be the underlying technical asset of these coins. Not only this in the present world of technology and day to day progress new coins have arrived but these have the same characteristics as defined earlier. Also being able to interchange the crypto coins are mutually interchangeable as compared to the money that we use in our daily routine.
Characteristics of digital coins:
- These coins are created in the process involving blockchain technology so there is no trust issue. It can be further explained as when a transaction in a digital currency form is made the nodes that are present in the blockchain verify it at every stage that also adds to the reduction in the chances of fraud. In short, the blockchain acts as an underlying decentralized ledger and ledger being the principal book of accounts.
- The second characteristic can be an advantage or the limitation of the crypto coin that the crypto currency in the form of coin is immutable i.e., once the transaction is done it is impossible to retract, redo or undone the transaction. It means that the owner of coins before the transaction no longer remains the owner of those many entities of coins once the transaction is done and the coins transferred have a new owner from that instant of time.
- As earlier mentioned, the decentralized nature of bitcoin it leads to the decentralized nature of coins. In short coins are only meant to act and work as in the value of monetary terms and no role beyond that.
Characteristics of digital tokens:
- They are not made in the process of blockchain but rather they have their own unique blockchain, thereby making their unique functionality beyond the coins.
- If the token is of Bitcoin, it will be referred to as a bitcoin token and if it is of some other entity, it is called the token of that currency. E.g., XYZ token.
- Unlike crypto coins the tokens can’t be made on their own. If someone wants tokens to get generated, he/she has to spend some crypto coins so that the same is validated from the respective miners.
- Tokens are of many types like currency token, utility token, investment/asset token.