The concepts of “token” and “coin”, which are often used in the crypto world, are often confused with each other. The term token has become one of the topics of interest, especially with the growth of decentralized finance (DeFi). Come first to better understand the difference between token and coin what is token Let’s look for the answer to the question.
What is Token?
Considered one of the cryptocurrencies tokenIt can be defined as a value that is not built on the standalone blockchain but is released by integrating it into an already working blockchain. Tokens or tokens (in Turkish, the term ‘jeton’ can also be used from time to time, as in its full direct pronunciation in English or Turkish) are created using the blockchain of a different cryptocurrency and have a certain unit value, which can be exchanged over the unit value. salable. The token used in the blockchain system can represent any type of cryptocurrency.
What are the Token Types?
There are three main types of tokens on the blockchain. These; It can be defined as service token, security token and stock token. service tokens; software, digital content, etc. Provides access to services or products such as Security tokens represent real-life physical assets. A stock token, on the other hand, corresponds to partial ownership in a company.
How to Get Tokens?
To purchase tokens that exist on another blockchain, you must have a virtual wallet. You can obtain virtual wallets from various exchanges or wallet providers.
For example, if you want to buy tokens listed on Binance and you don’t have a Binance wallet, Binance Guide: What is Binance, How to Use It? Is Binance Exchange Safe? You can check our guide.
What is MetaMask for you to create a wallet using MetaMask? How to use? How to Open MetaMask Wallet? You can check our guide.
What Are Token Standards?
- ERC-20: The most widely used standard. It is a token standard belonging to the Ethereum blockchain. Almost all major tokens support the ERC-20 standard. There are currently over 259,000 ERC-20 tokens.
- ERC-233: This standard developed after the flaws in the ERC-20. For example, in ERC-20, tokens sent to the wrong smart contract are lost, while ERC-233 does not have such problems. It is also an important advantage that it is 50% cheaper compared to the ERC-20.
- ERC-721: This standard, which enables NFTs to be created, represents unique entities on the blockchain. They act as verifiability and proof of ownership on this blockchain. Games in the crypto world often use this standard.
- Different token standards also exist on different blockchains. For example, TRON network also includes token standards such as TRC-10 and TRC-20.
What is the Difference Between Coin and Token?
The main difference between them; The coin uses the science of cryptography and performs the encryption with this technique. The token is obtained using an already created blockchain. The coin can increase in value over time and can be considered a form of digital money. Token, on the other hand, is considered a symbol representing the contract.
While it is necessary to create and use different blockchains for coins, tokens are produced through different projects and can also be used as a payment method. Creating tokens is quite easy, but creating coins is a rather complicated process. Coin is a digital currency; A token is a digital asset. When purchasing cryptocurrencies with Coin, a service or product can be purchased with the token.