Coins Vs Tokens – What is the difference?

Even though people use ‘coin’ and ‘token’ interchangeably as if they are synonyms, they refer to two different concepts. Coins are digital money, created using encryption mechanisms. For example, Bitcoin is the digital equivalent of legal tender.

There are coins which operate on Bitcoin’s original protocol (created by Satoshi Nakamoto) and coins which operate on blockchains built specifically for them. They have the same characteristics as money; fungible, divisible, portable, acceptable, durable and in limited supply.

Tokens are digital assets. We can use them as a method of payment within the ecosystem of a cryptocurrency. Digital tokens have certain use within only specific projects. They represent an asset or a utility. You can create them using templates, which is easy, unlike creating coins, which take a lot of computing power.