Difference between coins and tokens explained.
Let's explain the difference between a coin and a token. Because there are a lot of different tokens exist in the world of cryptocurrencies. Each coin aims to have a unique purpose, but the way to achieve that purpose can be similar to other tokens.
Refers to all the coins and tokens
A coin is an asset that is native to its own blockchain. Each of these coins exists on their own blockchain. Example: Bitcoin, Ether
Tokens are created on existing blockchains. Example: Tokens built on the Ethereum blockchain; ERC-20 tokens.
A cryptocurrency is a coin or token that is solely used as a currency, to pay for goods and services.
The utility token is meant to be used to get acces to services. Utility tokens are also called app coins and represent the right to participation in an online network.
A stablecoin aims to create stability and is for that reason backed by FIAT currency or other valuable goods to achieve stability.
Equity tokens represent ownership of an asset such as debt or company stock. These tokens are often issued by start-up companies or projects.
Voting tokens are often used in decentralized autonomous organizations and are meant to create democracy in an organization. Voting tokens can be used for governance of a decentralized autonomous organization.
Reputation or Reward tokens are a type of tokens that show appreciation or give credits to participants in an ecosystem. The input of a participant can be validated with this type of token. This can be used for reviews, services, gaming, etc.