People interested in the cryptocurrency industry should be aware of the terminology used in this environment in order to make informed investment decisions. [There are a variety of acceptable terms for cryptocurrency that people interested in the industry should know in order to make informed investment decisions.] Sometimes it can be challenging to distinguish between terms, especially when they are often incorrectly used interchangeably. In this article, we will look at the difference between coin and token.
WHAT ARE COINS?
Let’s start off with coins. This is perhaps the most liberally used word in the world of digital currencies. Coin refers to a form of currency that’s held digitally. This digital money is kept secure using encryption, which is the process of converting meaningful information into a secret code. Bitcoin is the most famous example of a coin. It has the same characteristics as money: easily exchangeable, divisible, secure against counterfeit, and has a limited supply. These characteristics allow for Bitcoin, or any altcoin, to inherently have value and act as a medium of exchange.It is important to note that coins do not perform any function besides acting as money. They are sent, received, mined, and held on a public blockchain. Basically, coins cannot function specifically, but only as a general measure of value. Similar to how dollars can be exchanged for nearly any good or service available, coins can be exchanged for specific items, but the possibilities are general, not specific.