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Key points on how Crypto Coins are different from tokens

The meteoric rise of the cryptocurrency business over the last two years has attracted a large number of individuals, both investors, and non-investors. While some saw a potential chance to make money immediately, others took a more methodical approach by reading and learning about the industry. Because it is a new business, there are many new words for digital assets, and individuals frequently use them interchangeably.

Many people assume that cryptocurrencies and tokens are the same things. They are not, though. At their most basic level, all currencies are tokens, but not all tokens are crypto coins.

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What is the reason behind this? What considerations go into determining which is which? The usefulness of crypto can assist newcomers in distinguishing between a coin and a token. The following are the significant distinctions:

– A coin is a unit of money that is native to a blockchain and is used to trade and store value. A token is comparable to a coin, except it usually uses the blockchain of another coin. Consider Ethereum, which is a blockchain. Ether is the local currency. This network, however, is home to a number of other coins, including BAT and Loopring.

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– Coins are a suggested medium of trade that is directly represented by coins. Tokens, on the other hand, are a form of currency. The tokens can be kept for their intrinsic worth or sold and staked for interest. Tokens include Uniswap, Chainlink, and Polygon, to name a few.

– Blockchain is used to conduct cryptocurrency transactions, while smart contracts are used to exchange tokens.

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– When a token is used, it is transferred from one location to another. Because NFTs (non-fungible tokens) are one-of-a-kind things, ownership changes must be managed manually. It is not necessary to move a coin from one location to another. On blockchains, all transactions are recorded.

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