The Capital
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The Capital

Coins vs. Tokens

There’s a lot of jargon out there surrounding crypto coins and crypto tokens. Unfortunately, it can be difficult for newcomers to wrap their heads around all this new terminology.

This article breaks down the important differences between coins and tokens in simple terms. Read on if you want to find out more about it!

What Are Crypto Coins?

Cryptocurrency coins are digital currencies encrypted on their own blockchains. They are exchanged for fiat currency and are used in transactions as a method of payment. Crypto coins, similarly to physical coins, are units of value that can be exchanged for goods and services.

The most well-known crypto coin by far is Bitcoin (BTC), but there are many other types of cryptocurrency out there. These are often called altcoins, a shortened form of alternative coins, as they can be used as an alternative to Bitcoin.

What Are Crypto Tokens?

Crypto tokens represent interchangeable, tradeable digital assets. Unlike crypto coins, tokens do not operate on their own blockchains. Instead, they’re hosted on other platforms.

Like coins, tokens can be exchanged. However, they can be used for more than just making purchases. With tokens, you can participate in various kinds of activities, such as voting or betting. You can also make a profit with tokens through buybacks.

Generally, tokens are created and shared through Initial Coin Offerings (ICOs). These crowdfunding efforts enable creators to distribute their tokens.

What Are the Most Popular Coins and Tokens?

Now that we have defined crypto coins and tokens and explained the main differences between them, we’ll move on to some real-life examples. Below, you can find two tables showing the top five crypto coins and top five crypto tokens according to market capitalization at the time of writing.

Where Can You Buy Coins and Tokens?

When it comes to buying coins and tokens, there are many different sites for you to choose from. Here are five of the most popular options, including a few key bits of information.

Conclusion

This article has explained the differences between crypto coins and crypto tokens, along with providing a list of some of the more popular variants of each. It’s also given a list of some popular places where you can invest in crypto coins and tokens. Hopefully, with this information, you now feel better equipped for the world of crypto!

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