What is the difference between coins and tokens?


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As I understand it, coin is strictly a currency that can be traded, and accepted by people buying and selling things if those buyers and sellers choose to accept the coin. And a coin has its own blockchain or equivalent, and is not built on another like Etherium.

But a token is something that can be built on another platform, like Etherium, and a token actually plays role within the business operations and transactions of the company that issues it.

Am I right or wrong? And please share more insight.


    Ethereum is a platform, with it’s own blockchain and Ethereum’s “coin” or better put currency is Ether. Ethereum is similar to Bitcoin in that Bitcoin also uses a blockchain data structure but has it’s own currency called Bitcoin.

    A “token” by definition is a representation any fungible tradible good such as currency, loyalty points, gold certificates, in game items and more.

    The idea of a token itself is niether exclusive to Ethereum nor any other platform. A token is really an abstraction. It represents that I own a underlying tradable asset.

    Currently the Ethereum space is very hot with ICOs which are really token offerings. These tokens represent an exchange medium within the project. For example, Golem Project pays app developers who publish on the platform and CPU renters in GNT

    Because GNT represents the internal medium of exchange in the golem project, people who want to participate in this ecosystem must have GNT.

    If someone wants to buy GNT but only has ETH, they can offer to trade their currency ETH for my GNT at a price say 0.5ETH / GNT.

    In a more real life example. You pay $2 at a pinball machine effectively exchanging your currency for 3 pin balls (tokens) to be used to play within the pinball game.

    Edited on July 24, 2017