Updated: Aug 4, 2021
Some say a coin, some say a token. What Say Ye"
A recent question was raised as to the difference between a Token and a Coin. Are they both crypto currency? What IS the difference ?
The difference is not obvious to the newcomer. All these things look very similar, and they are all called "crypto currency." Crypto Asset comes closer to defining a token. This debate and it's finer points will be discussed in detail in follow-up articles.
A Coin is an asset that is native to its own blockchain. Ethereum exists on its own blockchain. BitCoin exists on its own blockchain. A giant database ( DLT) exists globally and these "coins" exist on this public digital ledger. Not in a physical sense, but in a digital world.
Many coins have become similar to cash in that they serve a purpose similar to fiat currency. They also serve more purposes than just money.
The 3 main attributes of money as we define money are; 1. a store of value that can be saved or spent on goods and services. 2. To transfer money, give and receive value by using them.
3. As a unit of account. With this unit of account ; goods can be described via a # or price and thereby Commerce, exchanges and ledgers (debit and credit) can be updated with simple arithmetic .
Tokens are generally a unit of value. A programable asset managed by a smart contract that is launched on a blockchain (most often Ethereum). Recently, many new distinct blockchains have evolved and will support newer and faster and more secure tokens. Some are fungible and now , NFT's (non-fungible) Tokens are gaining in utility and popularity.
As an asset (tangible or non-tangible) is converted into a token, the process is called tokenization. More info is found in the education and learning section of all crypto exchanges such as Coinmarketcap.