What Is the Difference Between Coins and Tokens?
The main difference between a regular cryptocurrency and a token is that a token will make use of an existing blockchain like the Ethereum network. Most tokens are currently created on the Ethereum blockchain and they are called ERC-20 Tokens.
Of course, tokens can be created on other blockchains like NEO, Waves, Lisk, and many others. However, Ethereum tokens are by far the most popular as they became widely used.
On the other hand, if you build your blockchain and issue a cryptocurrency based on it, it will be ‘coin,’ not ‘token.’
Then, why do many blockchain projects issue tokens instead of coins?
Creating a token is relatively easier and it requires less technical ability than creating a coin. Building a new network takes a lot of time, money, and effort and not all projects can afford them. For them, using the existing chain is much convenient and beneficial.
If so, why some projects build their own blockchain and issue coins? What are the benefits of creating coins?
The benefits of developing a new blockchain are quite clear; you get a complete platform to build any application while using an established cryptocurrency. You can form your ecosystem with full independence.
Moreover, your own mainnet means your project possesses enough resources such as money and high technology, which may make the project more credible to investors.
Also, projects may suffer from network problems when they use the existing chain since many of the existing networks cannot handle too many DApps operating simultaneously. In case of Ethereum, there were cases that one single project could clog up the entire network, which means all the projects built on Ethereum faced a slow network. Moreover, increased gas fees also caused inconvenience to both users and DApps.
It, however, is not always a problem with all platforms. FLETA, for instance, makes use of innovative technology to allow each decentralized application to operate independently using its sub-chain. FLETA is a blockchain platform specifically created to support the creation of decentralized applications. It strives to create the best environment for DApps.
FLETA is the platform capable of offering infinite scalability, high transaction throughput and a multi-chain structure while being easy to use and intuitive. Anyone can build a decentralized application on FLETA.
Even better, the gateway system provided by FLETA enables anyone to swap their old ERC-20 tokens for the new mainnet coins. It also allows DApps to continue using their tokens while using FLETA’s chain which gives developers a lot of flexibility.
For many projects, it is not easy to develop the whole blockchain network, so it is the better choice for them to operate their DApps on the existing network. However, not all blockchain networks can handle many DApps to be operated properly. Some of them sometimes suffer from network congestion. Therefore, FLETA can be a great option for the projects that issue tokens. With FLETA, projects and create their own token economy and utilize FLETA chain with unlimited scalability and fast speed of 14,000TPS.
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