In the crypto market there are some technical terms that not many people use, but are often good indicators to differentiate something.
One of those terms are Tokens and Coins which in the technical sense are two different things in the crypto market.
While both of them are cryptocurrencies, the difference between the two can ease people to understand what the project is quicker and help differentiate the potential of both.
Differences Between Tokens and Coins
Tokens and Coins are two different types of cryptocurrencies which is a correct technical term to easily understand what the project is behind the cryptocurrency.
What are Coins?
Coins are cryptocurrencies that have a blockchain as its underlying product where the coin itself is usually used as a gas fee or the overall utility and governance crypto of the blockchain.
Some of the examples of Coins are ETH, BTC, MATIC, AVAX, SOL, and many others that have their own blockchain.
Coins are natively built on top of a blockchain and are directly correlated and used to run the blockchain itself.
Technically correct crypto enthusiasts often use the term Coins to explain that the project has a blockchain underlying it so that the understanding of the project is much easier.
What are Tokens?
Tokens on the other hand are cryptocurrencies that are built on top of a blockchain but are built by developers who are creating a project on top of the blockchain.
Tokens usually represent a decentralized application or DApps, or just a regular community such as DAOs or decentralized autonomous organizations.
Cryptocurrencies of meme related projects who only rely on their community are also considered Tokens, which is why most times the term meme coin might not be technically correct.
In general, Tokens are cryptocurrencies that do not have their own blockchain, which is why the term Tokens are more used in the crypto market rather than Coins.
Conclusion
Overall, the difference between the two is not something you should sweat about, as most don't really care about these differences.
But to some hardcore investors, the proper use of both terms most times matter to them, which is why it is good to know the difference between the two terms so that when you meet someone or are trying to be seen as the crypto guy, you can explain the difference between the two.
If you properly use both terms correctly when explaining a project, it can help the people you are explaining to understand much faster and better.
Also, if you are explaining it to a hardcore crypto enthusiast, you might be considered one of them as you possess the technical slang to keep out with them, just by saying the basics.
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