Cryptocurrency coins and tokens

Know your altcoins from your tokens with our jargon-busing guide.

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There are thousands of crypto coins and tokens in existence. Here are the main types, and their distinguishing characteristics, plus some of the best-known examples of each.

What is a crypto coin?

A cryptocurrency coin is the native currency of a blockchain (a distributed ledger maintained by multiple independent participants rather than one central authority). So Bitcoin is the native currency of the Bitcoin blockchain, for example.

It’s an encrypted digital currency meant to be used as a form of payment. It can be used to store value and pay for services, in much the same way that you would use physical money.

What is an altcoin?

Quite simply a coin that’s not Bitcoin. An “alternative coin” to Bitcoin, as the name implies.

Despite not being Bitcoin, many altcoins are a “fork” of Bitcoin – developed by duplicating 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 had their own blockchain and protocol created from scratch. Some well-known examples include Ethereum (ETH) and Cardano (ADA).

What is a meme coin?

A coin with a lot of buzz (but not necessarily any enduring value).

Sometimes meme coins are created specifically to enrich insiders – AKA a “pump and dump” play. These are best avoided, unless you’re absolutely sure you’ve got your timing right!

What is a stablecoin?

A coin with a value that’s tied to an asset – often a traditional currency. So Tether, for example, is a stablecoin whose value is tethered to the US Dollar.

In theory this makes a coin less speculative. The case of TerraUSD begs to differ: in 2022 TerraUSD was unable to maintain its peg to the US dollar, and soon collapsed to a tiny fraction of its intended value.

Stable coins may be backed by a real reserve of the asset they’re pegged to, but that’s not always the case.

What is a privacy coin?

A coin that’s all about keeping the details of transactions private. For example, Monero. So the sender, the recipient and the amount are all obscured as far as possible.

Privacy coins use cryptographic techniques to prove transactions are valid (so that the ledger is still accurate) but without revealing all the details. Nodes can still verify the ledger’s integrity even though amounts, senders, or recipients may be hidden.

Realistically, the are both legitimate and illicit reasons why senders and recipients might want privacy.

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 decentralised 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: What's the difference?

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

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.

*Cryptocurrencies aren't regulated in the UK and there's no protection from the Financial Ombudsman or the Financial Services Compensation Scheme. Your capital is at risk. Capital gains tax on profits may apply.

Cryptocurrencies are speculative and investing in them involves significant risks - they're highly volatile, vulnerable to hacking and sensitive to secondary activity. The value of investments can fall as well as rise and you may get back less than you invested. Past performance is no guarantee of future results. This content shouldn't be interpreted as a recommendation to invest. Before you invest, you should get advice and decide whether the potential return outweighs the risks. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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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

Tim's expertise
Tim has written 11 Finder guides across topics including:
  • Banking
  • Personal Loans
  • Car Loans
  • Stock Trading
  • Cryptocurrency
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