What Is the Difference Between a Crypto Coin and a Token?

In the world of cryptocurrency, the words *coin* and *token* are often used interchangeably. But they have different technical meanings — and understanding the difference helps you navigate crypto markets with more confidence and clarity.

What Is a Crypto Coin?

A crypto coin is a digital asset that runs on its own blockchain. It is the **native currency** of that network and is designed to be used for payment, value transfer, or to secure the network itself.

• Coins operate independently on their own blockchains.
• Examples include Bitcoin (BTC), Ether (ETH), Cardano (ADA), and Solana (SOL).
• They are often used to pay transaction fees and reward network participants.

Coins are analogous to digital money — they serve as the backbone of a blockchain network.

What Is a Crypto Token?

A crypto token is a digital asset that is **built on top of an existing blockchain** rather than created with its own network. Tokens take advantage of a host blockchain’s infrastructure and security.

• Tokens rely on another blockchain (like Ethereum, BNB Chain, or Solana).
• They often represent a specific use case inside an ecosystem rather than acting as a standalone currency.
• Examples include USDC (a stablecoin), UNI (a governance token), and various NFTs.

Because tokens are built on top of an existing blockchain, developers can issue them without creating a whole new network.

Key Differences Between Coins and Tokens

• Blockchain: Coins have their own chain, while tokens run on another chain.
• Purpose: Coins act as currency or store of value; tokens often represent access, rights, or utility within an ecosystem.
• Creation: Coins require launching a full blockchain; tokens are created through a smart contract on an existing blockchain.

Think of a *coin* as the native money of a blockchain, and a *token* as a digital asset that lives inside another blockchain’s ecosystem.

Types of Tokens

Tokens can serve a variety of purposes depending on how they are designed:

• Utility Tokens — provide access to a product or service.
• Governance Tokens — give holders voting rights in a protocol or DAO.
• Stablecoins — tokens pegged to real-world assets like USD.
• NFTs (Non-Fungible Tokens) — unique digital items used for art, collectibles, or identity.

Why It Matters

Understanding this difference helps you:

• Choose the right wallets and exchanges for each asset.
• Understand use cases and risks for coins vs tokens.
• Navigate decentralised finance (DeFi) and Web3 applications with confidence.