Finder makes money from featured partners, but editorial opinions are our own. Advertiser Disclosure

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.

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.

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

Learn how and where to buy crypto coins and tokens

Learn how and where to buy cryptocurrency by following our simple step-by-step guides and comparing 30+ crypto exchanges.

Get an expert outlook on the crypto market

Get an expert outlook with our coin and token price predictions, forecasts and analysis reports.

Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Read more on this topic

  • Aptos (APT) price, chart, coin profile and news

    This guide provides step-by-step instructions on how to buy Aptos, lists some exchanges where you can get it and provides daily price data on APT.

  • How to buy Aptos (APT)

    This guide provides step-by-step instructions on how to buy Aptos, lists some exchanges where you can get it and provides daily price data on APT.

  • EthereumPoW (ETHW) price, chart, coin profile and news

    This guide provides step-by-step instructions on how to buy EthereumPoW, lists some exchanges where you can get it and provides daily price data on ETHW.

  • Coinbase Wrapped Staked ETH (CBETH) price, chart, coin profile and news

    This guide provides step-by-step instructions on how to buy Coinbase Wrapped Staked ETH, lists some exchanges where you can get it and provides daily price data on CBETH.

  • How to buy EthereumPoW (ETHW)

    This guide provides step-by-step instructions on how to buy EthereumPoW, lists some exchanges where you can get it and provides daily price data on ETHW.

  • How to buy Coinbase Wrapped Staked ETH (CBETH)

    This guide provides step-by-step instructions on how to buy Coinbase Wrapped Staked ETH, lists some exchanges where you can get it and provides daily price data on CBETH.

  • How to buy Optimism (OP)

    This guide provides step-by-step instructions on how to buy Optimism, lists some exchanges where you can get it and provides daily price data on OP.

  • How to buy Efinity (EFI)

    This guide provides step-by-step instructions on how to buy Efinity, lists some exchanges where you can get it and provides daily price data on EFI.

  • How to buy Threshold Network (T)

    This guide provides step-by-step instructions on how to buy Threshold Network, lists some exchanges where you can get it and provides daily price data on T.

  • How to buy UltraSafe (ULTRA)

    This guide provides step-by-step instructions on how to buy UltraSafe, lists some exchanges where you can get it and provides daily price data on ULTRA.

Ask an Expert

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and finder.com Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site