While they both represent blockchain-based cryptocurrencies but a token isn’t the same as a coin.
• What is a coin?
- Coin is a digital currency created with its blockchain network and will develop in the future similar to common currency, but in digital form with non-physical real world equivalent. Each coin differs in terms of network size, coin volume, performance, and consensus system.
- The characteristic of being based on its blockchain is significantly important for a coin. By being able to establish its protocol, the coin gets the highest level of independence and flexibility. The company or group that started it can decide on every aspect of the cryptocurrency, like consensus mechanism, fees, or transaction mechanism.
- Currently, coins are primarily used to trade and pay for service. Prices tend to fluctuate according to the demand and supply of the coin in the market.
( Ex: Bitcoin, Ethereum, Dogecoin, EOS, etc. )
- some coins can pay for gas fees (such as paying ETH to create a smart contract on the Ethereum network.)
.
• What is a Token? - Token is a digital currency created on other blockchain networks without its network and has different functions. In the cryptocurrency market, a token is a digital representation of an asset. The asset represented by the crypto token may embody a utility, tradable commodity, loyalty point, voting rights, and more.
- Tokens are generated by smart contracts to create dApps (decentralized Apps) or Defi (decentralized finance) and creators can choose to build their blockchain networks such as Ethereum or Binance Smart Chain.
- Tokens can exchange goods and services like a coin but it has unique features as they are built, such as granting access to Defi service, correlating with another asset to provide stablecoins, etc.
(Ex: Tether (USDT), Yearn Finance (YFI), Uniswap (UNI), etc.)
• What’s the difference?
- Algorithm
- Coins are based on their blockchain
- Tokens are based on a smart contract (other blockchain networks).
2. Utility
- Coins have money utility it can be used to back applications, smart contacts, validate transactions, staking, etc.
- Tokens are digital representations of an asset, tradable commodity, loyalty points, etc.
3. Fees
- Coin can be traded on its network with a little gas fee but much pay more fee for other networks when you trade coin to the token.
- Coins offer the highest degree of independence and flexibility. On the other hand, they are expensive to build and need large communities to support and adopt them.
- Tokens are cheap, fast, and easy to develop. They require no maintenance but come with dependence on the main network, which gives little to no flexibility. Tokens may work as side projects that bring funds to the main business, or in any way that they represent real assets that can be moved around without physically.
MegaMoon has a token called $Moon, it’s a DAO token of MegaMoon ( ERC-20 ) contract on Polygon blockchain with 10,000,000,000 max supplies, $Moon can be used on the MegaMoon platform and also can be exchanged for other tokens or coins.
Please follow MegaMoon for more information and come to win huge profits.📍📌
Website: https://megamoon.space/
Twitter: https://twitter.com/0xMegaMoon
Facebook: https://www.facebook.com/OxMegaMoon
Medium: https://medium.com/@0xmegamoon
MegaMoon community: https://t.me/Oxmegamoonchat