What is the Difference between a Crypto Coin and a Token? (animated explainer video)

What is the Difference between a Crypto Coin and a Token? (animated explainer video)

The cryptocurrency industry is riddled with jargons and terms that are frequently interchanged, such as token versus coin. As a result, no one will throw you in jail for not understanding the difference. Even well-known industry professionals and authors frequently use both terms interchangeably. But, in this video, we will explain to you that there is a technical difference between a crypto token vs coin.

You may be able to distinguish some of the distinctions between crypto coins and tokens based on the definitions we've explained. However, we'll highlight them a bit more, so you can see what we're talking about:

Tokens lack a native blockchain, whereas coins have a native blockchain.

Because a token is based on an existing blockchain, it is less expensive to manufacture than a coin, which needs its own blockchain.

When a project creates its own blockchain and migrates its tokens to the new blockchain as coins, tokens can eventually become coins. Binance Coin (BNB), Tron (TRX), and Zilliqa (ZIL), which were formerly tokens on the Ethereum network, are examples of successful migrations.

Coins are generally used as a payment cryptocurrency, whereas tokens may be used for a number of purposes.

Let’s explain to you some of the classifications of crypto tokens.

Security tokens:
These tokens are digital assets that are used to represent traditional "assets." Some security tokens, for example, represent firm shares or bonds that are issued to raise cash from investors.

Asset-backed tokens:
These are tokens that represent assets in the real world, such as a piece of real estate or tokenized copies of gold held in a vault. The issue of these assets allows them to be exchanged without the need for a physical transfer of the underlying commodity.

NFTs (Non-Fungible Tokens):
These are tokens that are primarily used as collectors. NFTs may be made for practically anything, including art, baseball, virtual real estate, and event tickets, among other things. We have a video on the channel based entirely on NFTs if you want to check it out to learn more about them.

Stablecoins (Tokenized Money):
These are crypto tokens that represent digital equivalents of fiat currencies. They're generally linked to the underlying currency at 1:1, so they're always redeemable for the same amount. USD Coin (USDC), Tether (USDT), and Gemini Dollar are all popular examples (GUSD). #cryptodecoded

Видео What is the Difference between a Crypto Coin and a Token? (animated explainer video) канала Crypto Decoded