Ever wondered what makes a coin different from a token? How about an altcoin? If these are still not clear to you, don’t worry. A lot of people are still confused about it.
Altcoins are every cryptocurrency other than Bitcoin. Bitcoin was the first cryptocurrency and every other cryptocurrency that followed is called an alternative coin = altcoin.
Coins are cryptocurrencies whose primary purpose is to be an alternative to money. They bear money’s characteristics namely, a unit of account, a store of value, and a medium of transfer. Bitcoin
is a coin and so are Litecoin
The utility value of coins are limited in comparison to tokens but they do offer a more mature ecosystem and are easy to understand because of their use as just replacements for money.
Tokens on the other hand are cryptocurrencies that usually offer utility and run on top of another existing blockchain like Ethereum or NEO.
ETH straddles the line between being a token and a cryptocurrency because it is used as an alternative to money, a unit of account and a store of value. But it has additional utility in that it is also used to pay for transactions and computations on the Ethereum blockchain and in the future will be used for mining when proof of stake is implemented.
In day to day use, the terms tokens and coins are used interchangeably for all cryptocurrencies because there is no current legal definition. But as cryptocurrency acquires a legal element, we may see a further distinction or legal definition between the two.
The ico-check team hopes that this article has been informative and clarifies the differences between coins and tokens.
All the best from you ico-check team!