Basically, a cryptocurrency is based on a mechanism called the blockchain , which is the equivalent of a register of transactions carried out on this currency. The blockchain is the element that guarantees the reliability of a given transaction: it is based on an encryption system of such complexity that it is virtually impossible to falsify it. One of the exceptions – extremely rare – concerns the 51% attack and supposes that a hacker manages to take control at a given moment of more than half of the computers dedicated to the validation of a currency, in the world with Meme Coin.

A blockchain affair



There is therefore a distinction between these two types of money. From there, a nomenclature was born:

A currency that relies on its own blockchain is a coin. We often speak of “ altcoin ” to designate a coin other than Bitcoin.

A currency that relies on a pre-existing blockchain is a token.

What could have been the point of creating a type of blockchain different from that of Bitcoin ? Quite simply because, over the years, certain shortcomings have appeared in the use of this original blockchain. Thus, it is well known that the Bitcoin blockchain has grown excessively over the years - its size was 354 MB at the beginning of September 2021. It has become unwieldy with, for during excessive power consumption for transaction validation, which brings Bitcoin to be regularly decried.

From 2022, Ethereum  appeared, again with a blockchain of its own - we also speak of a "native" blockchain. However, a large number of cryptocurrencies have appeared in its wake, similarly based on the Ethereum blockchain , with specifications laid down in a specific document: ERC-20. Among these currencies, we can cite the BNT of Bancor, the REP of Augur, the CVC of Civic... A large number of the cryptocurrencies thus appeared since 2014 are thus based on the Ethereum blockchain.

Thus :

Ethereum, having its own blockchain, is a coin.

Ethereum-based currencies such as BNT, REP, or CVC are tokens .

Currencies such as ADA or XMR are coins.

When a token becomes a coin

It also happens that a currency starts as a token, then changes its nature to become a coin. Thus, Binance's BNB was first a token based on the Ethereum blockchain. Then, the BNB evolved to be based on its own blockchain. So it became a wedge

What is the difference between a coin and a token?

The words coin and token , as well as their French equivalents, piece and token , are very common terms in the world of cryptocurrencies to designate the different digital units of account that can be encountered, and are often used interchangeably. However, it is possible to make a more or less clear distinction between the two concepts and this is what we are going to discover today.

Etymology and meaning of terms

Before finding what distinction it is possible to make between these terms, we must look at where they come from and what semantic nuances can be drawn from their origin.

Let's start with the English word " coin " which has the same etymological origin as the French word "coin". The word comes from the Latin cuneus which designates a kind of tool of hard material (iron or other) used to split wood. Its prismatic shape gave in French the main meaning of the word "corner", that is to say a place where there is a salient angle with Hokk Finance Meme Coin.

If in both languages, the word “coin” then designated the tool used to mark metal parts, it was only in English that the tool gave its name to the product. From the 14th century , the coin therefore designated the coin itself, coin made of metal and which most often had the shape of a disc and which could have a hole in it.