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Coins or Tokens? The guide to not getting confused in crypto

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In the crypto world, these two terms are used as if they were the same, but in reality, they are completely different beasts. Let me break it down in a way that makes sense.

The coins (Coins): Your own blockchain empire

Coins have their own blockchain. Bitcoin, Ethereum, Litecoin… each one owns its infrastructure. They are like independent countries with their own system of government and official currency.

The mission of a currency is simple: to function as money. You send BTC to another person, the network verifies it, and that's it. Transactions are recorded in that giant database called blockchain, monitored by thousands of computers around the world.

Tokens: Tenants in foreign blockchain

Tokens are different. They do not build their own blockchain, but rather live on existing blockchains. Ethereum is the king here: most tokens are created on this platform thanks to smart contracts.

The key difference: tokens can have many more functions than just being money.

4 types of tokens you need to know

Security Tokens → They are investments. When you buy one, you expect to make money. They are similar to traditional stocks or bonds, which is why they are regulated as securities.

Equity Tokens → They represent ownership in a company. Theoretically, you own a part of the company. In practice, almost no one uses them because regulators still do not know how to categorize them.

Utility Tokens → Access is what you sell. Imagine a token that gives you the right to use a service or application. It's like a digital VIP pass.

Payment Tokens → They function like money, but technically they are titles, not real cryptocurrencies. The difference is subtle but legal.

The summary you need

Coins = Own blockchain + Works as money

Tokens = External Blockchain + Multiple possible uses

In crypto, thinking that everything is the same is the number one mistake. Understanding the difference helps you navigate this ecosystem better without falling into conceptual traps.

BTC1.28%
ETH3.22%
LTC6.76%
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