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Coins vs tokens: what’s the difference?

The terms “coin” and “token” are often used interchangeably, but there are a few key differences to be aware of.

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Tim Falk

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If you’re new to the world of cryptocurrency, you’ll no doubt have found that there’s a whole lot of jargon and technical terminology to try and wrap your head around. Two terms that can be the source of much confusion are “coin” and “token.” Both of these words can be used to describe units of blockchain value and there are plenty of similarities between the two.

However, there are some important differences as well, which we’ll look at in this article.

Disclaimer: This page is not financial advice or an endorsement of digital assets, providers or services. Digital assets are volatile and risky, and past performance is no guarantee of future results. Potential regulations or policies can affect their availability and services provided. Talk with a financial professional before making a decision. Finder or the author may own cryptocurrency discussed on this page.

What is a crypto coin?

In general terms, a cryptocurrency coin is just that – an encrypted digital currency meant to be used as a form of payment. A coin is a unit of value that operates on its own blockchain, independently of any other platform. It can be used to store value and pay for services, in much the same way that you would use physical money.

Bitcoin (BTC) is easily the best-known cryptocurrency coin around the world, but it’s far from the only coin available. In fact, there are thousands of crypto coins in existence. You may see many of these other coins referred to as altcoins, an abbreviation of alternative coins, simply because they offer an alternative to Bitcoin.

Most altcoins are a fork of Bitcoin and were developed using Bitcoin’s open-source protocol. Examples include Litecoin (LTC) and Dogecoin (DOGE).

However, there’s also a long list of other altcoins that haven’t been derived from the Bitcoin protocol and have instead created their own blockchain and protocol. Some well-known examples include Ethereum (ETH), Ripple (XRP) and Cardano (ADA).

What is a crypto token?

Tokens are used to represent digital assets that are fungible and tradeable, including everything from commodities to voting rights. However, rather than operating on their own blockchain, tokens are hosted by another platform, such as Ethereum.

While tokens are also a medium of exchange, they offer functionality above and beyond that of coins. Tokens give their holders the ability to take part in some kind of activity – for example, if you want to bet on the outcome of future events through decentralized prediction market Augur, you’ll need to use REP, the Augur platform’s native cryptocurrency token. Tokens can also offer value to buyers, for example through buybacks.

Tokens are usually created and distributed to the general public through Initial Coin Offerings (ICOs), which are a form of crowdfunding. Some of the best-known crypto tokens include EOS (EOS), Tron (TRX) and OMG Network (OMG), with Ethereum being the most popular platform for token development.

However, there are also plenty of other platforms which tokens can be built upon, including Omni, NEO, Waves and Qtum.

Must read: Coins vs tokens

Coins are standalone cryptocurrencies based on their own blockchain. Tokens are built and hosted on existing blockchains.

Explore more coins and tokens

Find all coin and token profiles, news and history to get you started with crypto trading and investing.

Bitcoin guide
Bitcoin profile
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Ethereum
Ethereum profile
Get the latest Ethereum (ETH) price, coin profile, news and history.

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50
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73
281
Bank transfer, Credit card, Cryptocurrency, Debit card, P2P
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8
222
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8.2Great
eToro Cryptocurrency Trading
8.2Great
18
79
Bank transfer, Credit card, Debit card, Neteller, Skrill
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Binance Cryptocurrency Exchange (Not available to US users)
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1
369
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8Great
Gate.io Cryptocurrency Exchange
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8
1609
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Bybit Cryptocurrency Exchange

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Kraken

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  • Large selection of cryptocurrencies
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KuCoin Cryptocurrency Exchange

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  • Buy, sell and trade over 700 crypto assets
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Kraken Cryptocurrency Exchange

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Binance Cryptocurrency Exchange (Not available to US users)

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Bybit Cryptocurrency Exchange

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Tim Falk is a freelance writer for Finder. Over the course of his 20-year writing career, he has reported on a wide range of personal finance topics. Whether you're investing in stocks and ETFs, comparing savings accounts or choosing a credit card, Tim wants to make it easier for you to understand. When he’s not staring at his computer, you can usually find him exploring the great outdoors. See full bio

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Tim has written 26 Finder guides across topics including:
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  • Cryptocurrency
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