While it is common to speak of a cryptocurrency in the broad sense, there are however two main categories of assets: tokens and coins.

The terms are often used interchangeably, but do not mean exactly the same thing.

A "coin" is a unit of value that is unique to a blockchain.

A "token" or "token" in French, is a unit of value of a digital asset that does not have its own blockchain.

Concretely, we are therefore talking about a "coin" for Bitcoin (BTC), Cardano (ADA), Ether (ETH) or Avalanche (AVAX), and of a token for a cryptocurrency using one of these blockchains, for example, the Tether (USDT), the Shiba-Inu (SHIB), or the Basic Attention Token (BAT), all of which are based on the Ethereum blockchain.

Different uses

Theoretically, it is much easier to create a token than a coin.

Because in the case of a corner, you have to create a whole technology that goes with it, and in particular an economic model.

A token can theoretically be created in just a few minutes ... Be careful not to take shortcuts: some tokens have a real utility, like the MATIC, which was created for example to reduce transaction costs on the Ethereum blockchain , or Tether, which is a stablecoin, a cryptocurrency whose price is based on that of a “real world” asset, in this case, the dollar.

The term "stablecoin" is, as such, partially wrong because Tether (USDT) is indeed a token and not a coin.

What to add to the confusion!

By nature, the token is therefore designed to be exchanged on a particular blockchain and to be compatible with it.

A coin is therefore technically a token, we will often speak of “ETH tokens”.

But the reverse is not true.

A token is not a coin, even though that term appears in its name.

Understand the fundamentals before any investment

It is therefore advisable to be very careful when investing.

Because if you will not pay a large purchase fee on an exchange platform like Binance, you may have a bad surprise by transferring the funds to your wallet.

Ethereum "tokens" often come with very high transfer fees.

To transfer them to their wallet, an individual will have to pay an ether transaction fee (ETH).

The other fundamental difference between the two types of assets is that, by nature, a project that is carried by its own blockchain will take off much higher and will survive much longer over time than a simple token whose existence may be threatened by the closure of the blockchain it operates ... The fundamentals are different. The interest of MATIC could, for example, be called into question the day the creators of Ethereum decide to reduce the transaction costs of the blockchain.

Another flaw of tokens is that with the exception of a few projects, there is still a lot of “waste”. No programming knowledge is required to create a token. Some sites allow you to create your own token in 5 minutes. And there are many scams: some token creators keep almost all tokens at their disposal and voluntarily manipulate the markets. They also do not hesitate to use influencers to create a buzz on social networks. It is for this reason that it is always advisable to seriously inquire about a project before investing your money in it. By consulting, in particular, the whitepaper of the project.

Last point to be addressed: some blockchains are characterized by the existence of a "fuel" ("gas" in English). In the case of the Theta blockchain, the Theta Fuel will play this role. It is a cryptocurrency whose main purpose is to pay the transaction fees of smart contracts on the blockchain. In the case of the Ethereum blockchain, the “gas fee” is ETH. It is therefore not an element that is systematically found on each blockchain.

Finally, you will note that there has been a lot of talk about Ethereum, and little about other blockchains.

For good reason, if the ecosystems of Polkadot, Solana, Cardano or Avalanche are growing, the vast majority of tokens still rely on the Ethereum network.

And for good reason: Ethereum was one of the first blockchains to compete with Bitcoin.

Its capitalization now exceeds 500 billion dollars.

The Solana and Cardano blockchains are, by comparison, ten times smaller in terms of capitalization.


The cryptocurrency market exceeds $ 3 trillion


"The Satoshi Mystery": How the Creator of Bitcoin Became a Real Myth

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