06/09/2021
๐๐ก๐ข๐ช๐๐๐๐๐: ๐๐ฟ๐๐ฝ๐๐ผ ๐ง๐ผ๐ธ๐ฒ๐ป ๐๐ ๐๐ฟ๐๐ฝ๐๐ผ ๐๐ผ๐ถ๐ป
Sometimes people use the term โcoinโ to refer to what other people call โtokensโ, and โtokenโ to refer to what others call โcoinsโ. Some people will use either name to refer to all the digital assets currently available.
However, there are considerable differences between crypto coins and crypto tokens, so you must know what they are!
โญ ๐ช๐ต๐ฎ๐ ๐ถ๐ ๐ฎ ๐๐ฟ๐๐ฝ๐๐ผ ๐๐ผ๐ถ๐ป?
Definition of a digital coin is an asset that is native to its own blockchain. Think about Bitcoin, Litecoin, or Ether. Each of these coins exists on its own blockchain.
Transactions of digital coins can be made from one person to another. However, no physical coins move when you send and receive them. All the โcoinsโ exist as data on a giant global database. This database (blockchain) keeps track of all the transactions and is checked and verified by computers worldwide.
โญ ๐ช๐ต๐ฎ๐ ๐ถ๐ ๐ฎ ๐๐ฟ๐๐ฝ๐๐ผ ๐ง๐ผ๐ธ๐ฒ๐ป?
Tokens often get called digital coins. However, this isnโt correct. There is a major difference!
Tokens are created on existing blockchains. In fact, thanks to the creation and facilitation of smart contracts, the most common blockchain token platforms are Ethereum and Binance. Tokens that are built on the Ethereum platform are known as ERC-20 tokens and on the Binance platform are BEP-20.
Anyone can make their own custom token on one of these platforms.
โญ ๐๐ผ๐ป๐ฐ๐น๐๐๐ถ๐ผ๐ป
You should now know the simple definition of both a coin and a token: coins are native to their own blockchain. Whilst tokens have been built on top of another blockchain, like Ethereum, Binance, NEO, or Waves.
You should also know the most common uses for both coins and tokens. Coins are most often used simply as money; however, some coins do have other uses. These include being used to fuel applications, being used as a stake to validate a network transaction, or fuel smart contract and token transactions.
Meanwhile, tokens serve a different purpose. If they were created to be used on a dApp, then their purpose will depend on the application itself. In some cases, they are for features such as voting rights. In other cases, they are used for transactions on the dApp (like Civic) or to reward the users with things like discounted fees, etc. (like Binance). [๐ด๐ฐ๐ถ๐ณ๐ค๐ฆ: ๐ฃ๐ช๐ต๐ฅ๐ฆ๐จ๐ณ๐ฆ๐ฆ.๐ฐ๐ณ๐จ]
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