Crypto coins vs tokens
Have you ever wonder what the difference is between a crypto coin and a token? Well I have so I started to research a little. This small story tells you the difference.
A crypto coin is the native cryptocurrency of a blockchain. Examples are BTC for the bitcoin chain, ETH for the Ethereum chain and XMR for the Mirror chain. These coins are used to pay and reward for the gas fees on these chains. A coin can best be compared with regular money like dollars and euros.
A crypto token do not have their own native blockchain but they can exist on multiple blockchains. In fact these are smart contracts on Ethereum or Binance Smart Chain for example. In the former case we talk about ERC-20 tokens and in the latter about BEP-20 tokens. In fact these technical specifications that describe how a smart contract of such a token must look like, which methods they should support and how it is built up. A crypto token can best be compared with stocks of a company. The only difference is, at the moment, that a lot of paperwork is required to use stocks. Whereas in the crypto world it is fairly easy to begin. That’s also one of the risks of these tokens. They are fairly new and not regulated. That’s why you see a lot of copy cats projects, copied from PancakeSwap.
An example of a BEP-20 token is Pancake (CAKE). This smart contract can be watched on bscscan.
Just fill in “PancakeSwap” within the search bar on the top right and you will get to the token page of CAKE. As you can see the contract is 0x0e09fabb73bd3ade0a17ecc321fd13a19e81ce82.
When you click on this contract link, you will get more information about this smart contract. In fact you can even see the smart contract code (just click the “Contract” tab) and you will get the Solidity code. There is a funny “beginners” guide to code your own token on the BSC. It can be find here.
This was a small explanation of the difference between a coin and a token.