What Is a Coin and What Is the Difference Between a Coin and a Token?

Published 03 January 2024
What Is a Coin and What Is the Difference Between a Coin and a Token?


When it comes to cryptocurrencies, there often needs to be more clarity about terminology. The two most commonly used words — “token” and “coin/coin” — often raise questions for newcomers. And for many people, they are the same thing. In this article, let’s look at the difference between a token and a coin and define why this difference is so significant.

What Is a Token in Cryptocurrency?

Tokens are digital assets that are created based on an existing blockchain platform. Simply put, they operate within the ecosystem of another coin and are usually tied to a specific platform or project. Tokens utilize the infrastructure of an existing blockchain and the security and functionality of the underlying network without having to create their blockchain.

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The Ethereum blockchain is one of the most popular networks for creating tokens. As such, many tokens popular today have the ERC-20 standard or a similar standard on other networks.

Types of Tokens

Security Tokens

Security tokens are created to give investors ownership rights to stocks, bonds, shares in a company, etc. Roughly speaking, they are analogs of securities in the digital world. These tokens comply with securities laws and regulations, and the relevant authorities strictly regulate their issuance and circulation. Investors owning security tokens get rights to profit share, participate in corporate governance, and enjoy other benefits. And blockchain technology makes the management of these assets more transparent and efficient, avoiding bureaucracy.

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Security tokens improve traditional financial products by eliminating the middleman in investment transactions (broker, bank employee, and other intermediaries of financial transactions). Transactions with crypto security tokens are conducted without intermediaries, resulting in lower commissions, faster execution of transactions, free market access, a more extensive potential investor base, and automation.

Utility Token

Tokens that are “customized” for specific processes with a particular set of functions. For example, the Basic Attention Token (BAT) monetizes users’ attention in the Brave browser. Users receive BAT tokens as a reward for viewing advertisements in the browser.

The use of service tokens is often limited to specific platforms and usage scenarios. As a result, only some of these assets have retained their value over time.

Other Types of Tokens

  • Stablecoins are all tokens whose price is conditionally linked to the cost of another asset in a 1:1 ratio. This can be any asset with a stable price: government currencies (for example, the US dollar), precious metals, securities, and others. Investors and traders use stablecoins for trading and capital diversification. Unlike government currencies, stablecoins can be quickly and easily transferred between accounts and addresses anywhere an Internet connection is available. They also reduce risk and protect capital during market price fluctuations.

  • Governance Tokens are digital assets that allow the holder to participate in crucial decisions on developing a blockchain project. Moreover, these tokens also give holders the right to put forward their ideas and initiatives. Today, governance tokens are popular in DeFi and GameFi. The top three most popular governance tokens are Uniswap (UNI), Aave (AAVE) and Sushi (SUSHI).

  • NFT — Non-Fungible Tokens. They represent ownership of various digital assets: works of art, texts, images, audio recordings, game items or characters, domain names, etc. Information about the owner and his tokens is recorded in the blockchain and cannot be replaced or deleted.
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Assets Tokenization

Asset tokenization represents securities, precious metals, real estate, commodities, and other assets as digital tokens that can be bought, sold, and exchanged. They are linked to the underlying asset’s value: securities, commodities, derivatives, real estate, or art.

Tokenized assets may include the ability to exchange for the underlying asset. For example, Tether can exchange each USDT token for one real U.S. dollar in a bank account.

What Is a Crypto Coin?

A coin or coin is a cryptocurrency that runs on its blockchain — for example, Bitcoin or Ethereum. Developers create Many crypto coins from scratch, and a new blockchain is created along with the coin. A new coin can also be created by modifying the code of an existing blockchain. A well-known example is Bitcoin Cash, which was created based on Bitcoin.

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In addition, you may also encounter the term “altcoin” or alternative coin. This term came about because Bitcoin is the first and most recognized cryptocurrency; others are considered alternatives.

The blockchain network uses coins to perform various functions, such as paying transactions (fees) and distributing rewards to network participants, such as miners (in Proof-of-Work systems) or stakers (in Proof-of-Stake). Coins also function as digital currency, which can be used to pay for goods, exchange, and investments.

Types of Coins

Depending on the purpose and technological characteristics of cryptocurrency coins, they can be divided into these types:

For payments and storage:

  • Bitcoin (BTC) is the first and most famous cryptocurrency. Bitcoin is a digital analog of fiat currencies used to make payments or store.
  • Litecoin (LTC) is a fork of Bitcoin that aims to increase the speed of transaction processing.
  • Bitcoin Cash (BCH) is a Bitcoin fork created to increase the block size and reduce transaction fees.

For smart contracts:

  • Ethereum (ETH) is a platform that allows developers to create decentralized applications (dapps) using smart contracts. It is one of the most advanced platforms in this field.
  • Cardano (ADA) is an open-source platform created as an alternative to Proof-of-Work networks.
  • Polkadot (DOT) is a protocol that includes multiple chains and allows them to participate in a common security model.

With a focus on privacy:

  • Monero (XMR) is a coin focusing on increased transaction privacy.
  • Zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge) is based on Zcash (ZEC) — a cryptocurrency that aims to provide high data and transaction security.


  • WhiteBIT Network (WBT) — used for benefits on the WhiteBIT exchange and payments in the WB Network Ecosystem.

What Are Coins For?

Coins serve various functions on the blockchain. They serve as a medium of exchange and store value. Moreover, coins serve as payment of fees, rewards for miners and validators, and so on. In some cases, they allow holders to participate actively in network governance and various voting activities.

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Difference between Coin and Token

Parameter Token Coin
Blockchain Runs by an existing blockchain. It runs by its blockchain.
Purpose Created by projects within the blockchain and designed for various functions within that platform, such as accessing products and services, voting, etc. An independent digital currency designed primarily for transactions, rewards for miners or validators, and stores of value.
Creation Created by the project. Not extracted. New coins are introduced into circulation as rewards for miners or network validators. However, there are blockchains on which coins can be issued (e.g., DOGE).

Where to Buy or Receive Tokens?

You can buy cryptocurrency tokens and coins on crypto exchanges such as WhiteBIT. You can buy and sell a digital asset on the exchange by exchanging or placing a trade order. But, before doing so, you must create an account, undergo verification, and top up your balance.

Coins and crypto tokens can also be obtained from the Initial Coin Offering. During an ICO, the team sells digital assets to raise the funding needed to develop the project. Or, for example, through an Initial Exchange Offering (IEO). This is the same as an ICO; Only the exchange acts as an intermediary.

In addition, some projects distribute tokens as a reward for performing specific actions, such as mining, testnet, or participation in a loyalty program.

How to Sell Tokens on the WhiteBIT Exchange?

On WhiteBIT, you can sell tokens in the Exchange and the Trading Terminal. Everything is straightforward with the Exchange: selecting the desired currencies, amount, and exchange assets. The Trading Terminal offers many more features but requires a little familiarity with the platform before getting started. With it, you can sell tokens at a set price with a Limit order and at the market price with a Market order.

Before examining the two simple ways, check the exchange rate and crypto token prices.

How to sell tokens using the Exchange:

  1. Open the WhiteBIT website;
  2. Go to the “Convert” section;
  3. Select the assets you need;
  4. Click “Buy.”
  5. Click “Accept” within 10 seconds.
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How to sell tokens using the trading terminal:

  1. Go to the spot trading page;
  2. Select the desired pair in the upper-left corner;
  3. Select the trade order type in the upper-right corner of the terminal: Market order if you want to sell instantly at the market price, or Limit order if you set a desired selling price;
  4. Click the red “Sell” button.

Earnings on Tokens and Ways to Store Them

The most apparent way to make money is to buy an asset and wait for the price to rise, but there are many more tools for making money from tokens. For example, traders use any market movement to make money on the rise and fall of prices. How much a token is worth depends not only on market capitalization, but also on its unique application and functionality within a particular platform or project.

You can also earn money by investing in early-stage projects via ICO or Launchpad, mining or staking, or participating in Airdrop and Bounty programs. By the way, the WhiteBIT exchange also offers the opportunity to earn a passive income of up to 18.64% per year with Crypto Landing plans for over 40 tokens and coins.

Cryptocurrency wallets are used to store both coins and tokens. These can be exchanged in cold or hot wallets. Therefore, you should choose cryptocurrency wallets based on your needs.


This article has broken down what tokens are and why they are needed. Under the theme “coins vs tokens,” it’s clear that both coins and tokens are essential in cryptocurrencies and blockchain, providing various opportunities for investment, innovation, and financial transactions. Their differences and unique characteristics, as highlighted in the crypto token vs coin comparison, make them an integral part of today’s digital economy. Understanding their role and the nuances between them can help you make more informed decisions in this dynamic and rapidly evolving sector.


A token is a form of representing an asset or value on an existing blockchain. The functions of tokens and their other features depend entirely on the specifics of the platform or project.
In contrast to tokens, there are coins — native blockchain coins that are used to transfer funds, pay commissions, reward miners or validators, and a host of other functions within the blockchain.

You can buy tokens on both centralized exchanges and decentralized exchanges. In addition, you can use online and offline exchangers.

You can sell tokens on centralized exchanges, like WhiteBIT, or decentralized exchanges using a trading terminal or Converter.

Coins are assets on a proprietary blockchain that are used to transfer funds, pay commissions, reward network validators or miners, and a host of other functions. The most popular and well-known coins are Bitcoin, Ethereum, and Litecoin. Compared to a token, it's crucial to understand that a token cryptocurrency represents a specific utility or asset within a broader platform.

You can use the “Trading” section and the “Exchange” button. Everything you need to know about “Exchange” on WhiteBIT can be found in the detailed article on WhiteBIT Blog.