Coin Definition | Decryptopedia™ by BabyPips.com

In cryptocurrency, a Coin is a digital asset that operates on its own underlying blockchain.

It doesn’t run on the blockchain of other cryptocurrencies.

Bitcoin(BTC) is the best example of a coin.

It operates on the Bitcoin network.

Ether, another great example of a coin, is the native cryptocurrency of the Ethereum blockchain.

Coins are mainly used for payments or mediums of exchange or as a store of value within a specific network.

A token, on the other hand, is a digital asset that operates on a parent blockchain or on another digital asset’s blockchain, because it doesn’t have a blockchain of it’s own.

Ethereum is the most widely used parent blockchain, allowing users to create tokens on top of it.

If the Ethereum blockchain disappeared today, as the underlying platform, all of the tokens created and existing on top of it would also disappear.

ERC-20 tokens, also known simply as “ERC-20”, are a technical standard that is used to create all smart contracts on the Ethereum blockchain.

It outlines all of the rules that Ethereum tokens must adhere to, and it simplifies what developers have to do when trying to create and develop new projects.

It creates a standard expectation of how tokens will function within the Ethereum network.

Related Terms

Token

A Token is a digital asset that operates on a parent blockchain or on another digital asset’s blockchain because it doesn’t have a blockchain of its own. The term “token” also tends to describe almost all other cryptocurrencies other than Bitcoin and Ethereum, the two largest cryptocurrencies in existence today. Tokens have multiple purposes and use cases.

Ethereum (ETH)

Ethereum is a decentralized blockchain platform that makes digital money, global payments, and applications possible using open-source software and smart contract functionality. The big difference between the two is that Ethereum is programmable, meaning you can build and use decentralized apps on the network. That means the Ethereum blockchain can be programmed to do virtually anything.

Bitcoin (BTC)

Bitcoin (BTC) is most well known as a digital decentralized cryptocurrency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer Bitcoin network without the need for intermediaries, such as payment gateways or banks or routing services. Think of bitcoin as Internet money, that you can send and receive directly, to and from anyone, and you can use it to pay for stuff.

Digital Currency

Digital Currency, also called digital cash, digital money, or virtual currency is any form of currency or money-like asset that’s only available in purely digital or electronic form.

Polkadot (DOT)

Polkadot (DOT) is an open-source blockchain protocol for cryptocurrencies, dubbed the “blockchain of blockchains”, that allows different, incompatible networks to communicate with each other and share data, using a multichain design.