Tokens and coins are not the same. What’s the difference between them and why are they even different? What about Altcoins? If you are still thinking about the right answers to these questions, you don’t need to beat yourself over it, as you are not the only person that is confused about it. A lot of people are still not clear about the difference between an altcoin, a token, and a coin. This article will highlight the differences between them.
Altcoins are every other cryptocurrency beside Bitcoin. The first cryptocurrency to ever emerge was Bitcoin, and every other crypto that came after Bitcoin is classified as an alternative coin – altcoin.
A coin is a cryptocurrency whose fundamental purpose is to serve as an alternative to money. They bear the traits of money such as a medium of transfer, a store of value, and a unit of account. Bitcoin as well as Zcash, Monero, and Litecoin are all coins.
The utility value of a coin is limited in comparison of the coin to a token, but the coins offer an ecosystem that is more mature and better. They are also very easy to understand because they are just used in the place of money.
On the other hand, tokens are cryptocurrencies that often provide utility, and they function with the help of already existing blockchain such as Ethereum. ETH stands in the line between being cryptocurrency and a token; this is because ETH is used as a store of value, a unit of account, and an alternative to money.
But it has other uses, as it is used to pay for computations and transactions on the Ethereum blockchain. When stake proof is implemented in the future, ETH will be used for mining.
We hope these simple definitions have answered your questions.