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10 Differences between Crypto Tokens and Coins

10 Differences between Crypto Tokens and Coins
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    1. A Blockchain can only have one native asset (coin), whereas it can have hundreds of tokens built on top of it.

    ā€œ While ETH is the cryptocurrency native to the Ethereum Blockchain, there are many other different tokens that also utilise the Ethereum Blockchain. ā€ says Vikram Subburaj, CEO, Giottus Crypto Platform.

    https://www.outlookindia.com/business/demystified-the-difference-between-crypto-coins-and-crypto-tokens-read-here-for-details-news-197683

    2. Coins can be bought and sold as assets (Bitcoin, Ether is the coin for Etherium)

    3. All coins can be considered tokens, but not all tokens are considered as coins

    Coins are referred to as the "native token" of a blockchain.

    4. Coins are generally "mined" using proof of work or proof of stake

    5. Coin transactions are handled by a blockchain, tokens are managed/exchanged using smart contracts

    Blockchains use their own smart contracts: Etherium uses ERC-20 tokens.

    6. NFTs are Non Fungible Tokens

    7. Coins are designed to be digital money. Tokens can represent non numeric things like assets, actions taken, memberships (like Bored Ape Yacht Club)

    "Everyone has used a token at least once in their life. That dinner for two vouchers you got in the mail is a token. Your car title is a token. When you sell your car, you transfer the value of that title to someone else. However, you can't go to Microsoft and buy a computer with that title or dinner voucher." - Liquid blog post https://blog.liquid.com/coin-vs-token

    8. Confusingly, ICOs (Initial Coin Offerings) frequently refer to Tokens

    9. The essential elements for an ICO include a blockchain, a smart contract, a token (or multiple tokens) and infrastructure

    https://cointelegraph.com/funding-for-beginners/ico-101-a-beginners-guide-to-raising-capital-using-cryptocurrencies

    10. Tokens combined with smart contracts are essentially computer code and can be used for different functions

    includes

    utility (access to a product or service).

    Participation (voting capability to determine the course of the project)

    Investment (a record that you funded the project, like a share of stock). Also referred to as Security Tokens (by Forbes). These are regulated by the SEC in the United States.

    Asset Backed, sometimes called Value Tokens. (token represents ownership of physical digital or intellectual assets.)

    Payment Tokens (Ether and Bitcoin)

    11. What are the four types of cryptocurrency?

    The four major types include utility, payment, security, and stablecoins. There also are DeFi tokens, NFTs, and asset-backed tokens. Of all cryptocurrencies, the most common are utility and payment tokens. These do not have their investment-backed or guaranteed by regulation.

    https://www.softwaretestinghelp.com/types-of-cryptocurrency/

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