Coins vs Tokens

Back It Up

First, it’s important to understand a couple of basic facts about decentralized networks, which is where blockchain shines.

What is a Coin?

A coin is the native cryptocurrency to the network.

What is Mining?

Many people confuse regular nodes (full nodes or lightweight nodes) with miners. Miners download special mining software that allows them to hash away at the Proof-of-Work algorithm of the coin — in Bitcoin’s case, the mining algorithm is SHA-256.

What is a Token?

Let’s move back to Ethereum — a blockchain platform that allows projects to launch applications on the decentralized network. For Ethereum, Ether is the coin used to pay for transaction fees and rewards miners for their work.

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Michael Rosenblat

Michael Rosenblat

Cryptocurrency Consultant, Community Manager, and Writer — https://twitter.com/CryptyMike