COIN VS TOKEN

Before getting into the business of the day which is Token Vs Coin, let's quickly at this simple analogy:

Let's say you want a new house now, well you have two options according to my opinion,

First you can order buy a house manage the house pay electricity bill pay number Bill do the maintenance and stuff like that and you know it’s your responsibility to keep the house because it’s yours.

So the alternative way is to rent a house, here you are not in charge of maintaining the house, yours is just to pay the rent and use it for any purpose you like without worrying about anything since it's not yours, you are not incharge.

Depending on the different factors you consider and stages of your life you have to choose the one that best fits your needs and the wiser one to go with.

Like you may not have enough cash now to buy a new house or you are just kinda busy, you don't want to take care of the maintenance or stuff like that.

That is a very simple analogy that's perfectly the same with the case of coin and token.

We can relate a coin to buying a new house i.e becoming the owner of the house and the token to someone that rents it and will be paying rent fee on the house.

Here's the simple definition I just came up with, a coin is a crypto asset that uses its own blockchain to store data and validate transactions while a token is an asset that uses someone else's blockchain and has its own infrastructure and it basically pays rent (charges).

You don't have to stress yourself creating a new block chain if you want to create a token, instead you just create your token on any blockchain you like and it'll be running on the blockchain that you choose for example.

Ether runs on its own blockchain (Ethereum blockchain) and uses it to store value and validate transactions.

The entire ethereum team has been working tirelessly since it's inception on improving the entire system and upgrading how it works also Patching vulnerabilities and all other responsibilities of the team.

Ethereum token known as ERC20 token uses Ethereum blockchain capabilities as its infrastructure example is token are Wrapped Bitcoin (WBTC), Shiba Inu (SHIB), Wakanda Inu and many more.

The Shiba Inu token and all other ERC20 token team doesn’t need to build their own blockchain network again since the token has been deployed on Ethereum blockchain and it will work according to the protocol of the blockchain

When you create a token on any blockchain, you don't have to worry about Creating a blockchain or writing the full code and worrying about how it should be validated. Instead you just create the token and it runs on that blockchain.

By creating a token, Shiba Inu, wakanda Inu and all other ERC20 token teams can rely on Ethereum Network to provide safety, scalability and stability while they focus on their own project.

Also you should know that a team of developers can migrate from a token to a coin if they decide that they're project is growing quickly enough.

It doesn't mean that the team will just convert the token to coin directly, rather they can create a coin that functions the same way and then create a bridge that will allow users to swap out their previous tokens to the new coins.

Another thing you need to know is that some coins are represented as tokens on other networks, for example Wrapped Bitcoin (WBTC). When you buy wbtc, you did not actually buy Bitcoin but a representation of Bitcoin on ether blockchain that mimics the price of Bitcoin.

The reason for creating this token is that it's much more affordable to trade the rep of BTC on ether network than to buy the coin on the network.

In conclusion : Coin uses it’s own blockchain to validate transaction and store data while token uses someone else’s blockchain to store data and validate transaction.