In digital currency, the terms coin and token are sometimes used interchangeably, which is not necessarily wrong but can be misleading. By definition, coins and tokens have distinct characteristics.
What is Coin?
Coin is a cryptocurrency issued on a blockchain platform with basic features such as smart contracts, sending and receiving, mining… Coins are created to solve problems of payment, security, Finance, application development…
Typical coins: Bitcoin (BTC), Ethereum (ETH), NEO, Stellar (XLM), Cardano (ADA), Electroneum (ETN)…
What are tokens?
Token is a cryptocurrency issued in ICOs (Initial Coin Offering). Because the concept of ICO can be mistaken for a coin issuance, some projects switch to the concept of ITO (Initial Token Offering) combined with TGE (Token Generation Event) for a more accurate view.
Tokens are issued based on a certain coin’s foundation. For example, the majority of tokens currently issued on the Ethereum platform are based on the ERC-20 standard. Some other tokens are based on NEO, WAVES, STELLAR platforms and include Bitcoin.
Regarding the features of tokens, we divide them into 2 types:
What is Utility Token?
Utility Token is a utility token. Utility token was born to serve a project with specific goals and features. Example token for the Dock.io project with payment and voting features; Binance’s BNB Token Has a Transaction Fee Discount…
What is Security Token?
Security Token, also known as security token, is a form of electronic stock issued in the form of a token. You will be entitled to dividends based on the number of shares you own in that project. Security tokens also allow you to vote or participate in deciding some of the project’s work.
Difference between Coin and Token
When referring to the price and information of virtual currency on the website CoinMarketCap, you can also see that CMC has a clear identification of whether the currency is Token or Coin. So what is the difference between Token and Coin?
According to the definition of Coin Market Cap
- Coins are virtual currencies that can operate individually.
- Token is a virtual currency that must be based on another virtual currency to work. For example, Ethereum, NEO, and NXT platforms can be used to build tokens.
|Communication||Own platform||Depends on the platform of the coin|
|Wallet||There is a location||Share wallet with coin|
In terms of features:
Coins are created to be used as a currency, a store of value, and for transactions.
Tokens have a broader use (of course can also be used for payments). Tokens can be fuel for an active network (GAS) or a unit of exchange within an application (CMT).
A coin needs to be developed its own storage wallet. The transaction fee will be deducted directly from that coin.
Tokens can store the same wallet developed specifically for the native platform. Transaction fees are payable according to the rules of the native platform (Ether or GAS).
Where to buy and sell Tokens and Coins?
With Tokens then you can buy from ICO projects when it opens to sell Tokens, the advantage is that you can buy it cheaply, however, to make a profitable ICO investment, you must choose good and potential projects. When you buy a token from the ICO, then wait for that Token to list on the exchanges so you can sell the amount of Token you bought. And if you can’t buy it since the ICO took place, you can wait until it goes on the floor and then buy.
Coin it’s different Tokens, once you have become a Coin, you can only buy Coins on cryptocurrency exchanges, depending on what coin you want to buy, you can find out which exchange supports trading, then buy it through that exchange. . Tapchibitcoin will introduce you to some reputable and safe exchanges. (Click on the name of the exchange to see instructions for use 🙂
Remitano: This is an exchange in Vietnam that supports you to buy and sell in VND, Remi has 4 coins that you can buy and sell: Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH) and USDT ( Tether).
Binance Exchange: This is the international exchange and also the largest exchange in the world, Binance supports a lot of Coins and Tokens, but of course you can’t buy with VND but must use BTC, ETH or USDT to buy.
Huobi Exchange: Similar to Binance, also in the Top 3 largest exchanges in the world, supporting many Coins and Tokens. Huobi has an exchange called Huobi OTC in Vietnam, where you can buy coins in VND. I will write the user manual later.
Store tokens in which wallet?
To determine in which wallet the token is stored, you need to determine which blockchain the token works on.
- Tokens of Ethereum: stored in Ethereum wallets such as MyEtherWallet, MetaMask, Eidoo, ImToken…
- Token of NEO: stored at NeoTracker walllet.
- Token of Stellar: stored at Stratis Wallet.
- Same for other platforms like Waves, QTUM, NEM…
Hope you have understood with this article tWhat is oken, what is coin? and understand the difference between Coin and Token. Good luck
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