๐ Crypto 101 | Day 5/101 ๐ฅ
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Coins vs Tokens ๐ช
Many beginners use "coin" and "token" interchangeablyโbut they're not the same.
Let's simplify it...
๐ช What is a Coin?
A coin is the native cryptocurrency of its own blockchain.
Examples:
โ
Bitcoin (BTC) โ Bitcoin Blockchain
โ
Ether (ETH) โ Ethereum Blockchain
โ
Solana (SOL) โ Solana Blockchain
Coins are mainly used to:
โข Pay transaction fees
โข Store value
โข Transfer money
โข Secure the blockchain
๐ท๏ธ What is a Token?
A token is created on an existing blockchain instead of having its own.
For example:
โข USDT (on Ethereum)
โข LINK
โข UNI
Tokens can represent:
๐ฐ Digital assets
๐ณ๏ธ Voting rights
๐ฎ In-game items
๐ Rewards
๐ฆ Access to DeFi services
๐ก Real-life example:
Think of Ethereum as a shopping mall.
๐๏ธ The mall is the blockchain.
๐ช The stores inside are different tokens built on Ethereum.
The mall owns the building, while each store serves a different purpose.
๐ Key Takeaway:
๐ช Coin = Has its own blockchain.
๐ท๏ธ Token = Built on an existing blockchain.
Understanding this difference will make learning crypto much easier.
Before today's series, did you think all cryptocurrencies were coins?? ๐
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