/data/photo/2021/09/17/6143b17c491f3.jpg "Don’t Say It Wrong! This is the difference between Coins and Tokens in Cryptocurrency")
KOMPAS.com – When you first enter the world of currency crypto-not a few people are confused by the many assets in it, including the existence of coins and tokens.
The difference between coins and tokens is not only in the name.
However, the function, origin, and benefits are also different.
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What is the difference between coins and tokens?
Before proceeding to the discussion of coins and tokens, you must first understand what they are blockchain.
Quoted from YouTube account Tech In Asia, blockchain is a system of supporting crypto currency transactions without having to go through third parties such as banks.
This system is managed directly by all users.
What is a coin?
Reported from Business Insidercrypto coins are digital assets that are built and stand on the network blockchain his own.
Coins are issued directly by the protocol developer blockchain.
Therefore, coins are also referred to as crypto assets native or a native on the network blockchain the.
For example, Bitcoin (BTC) operating on the network blockchain Bitcoin, and Ether (ETH) operating on the network blockchainHis name is Ethereum.
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In one network blockchain, users can send coins to other users. Like Bitcoin sent to Bitcoin, Litecoin to Litecoin, and so on.
Even so, it doesn’t support transferring between networks blockchain. For example, a user cannot sell 1 Bitcoin and buy 200 Litecoins from the network blockchain Bitcoins themselves.
Meanwhile, the function of coins is like money in general. Coins are used to transfer money as well as store value or investments.
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What are tokens?
Reported from Business Insidertokens are digital assets built on a network blockchain belongs to another party.
Tokens are created by a project which are then used as payment in order to enjoy the services that the project provides.
Generally, tokens operate in blockchain by using the concept smart contract.
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Reported from Tech In Asia, smart contract is a code application blockchain with the aim of entering into an agreement between several parties.
Example blockchain the one commonly used by tokens is Ethereum, which also uses the system smart contract.
Examples of tokens are Tether (USDT), USD Coin (USDC), DAI, UMA, and Basic Attention Token (BAT).
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Bitcoin is the first cryptocurrency to have the largest capitalization value-
Although operating above blockchain On the other hand, tokens can develop into coins as the project develops blockchainthemselves and move their tokens to blockchain new as coins.
Examples of token development into coins are Binance Coin (BNB), Tron (TRX), and Zilica (ZIL) which were previously in blockchain Ethereum.
The token function is used as a medium of exchange when running a project service that provides tokens.
For example, Musicoin, which is a token that allows users to access various features such as: streaming music from the Musicoin platform.
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The difference between coins and tokens in Cryptocurrency
Reported from Bitcouriersome conclusions regarding the difference between coins and tokens are as follows.
- Coins have blockchain genuine, while the tokens just “ride”.
- It’s cheaper to create tokens than coins that have to build a network blockchain alone.
- Coins have characteristics like money, which can be used as a means of payment as well as an investment. While tokens, even though they have a market value, are technically not a currency.
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Infographic: What is it Crypto?
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