These are the differences between coins, tokens and virtual currencies
Jul 29, 2019
In the crypto world, there is a lot of talk about “coins”, “tokens”, and virtual currencies. But what is the difference? And what differentiates them from ordinary cryptocurrencies. Trijo News works out the concepts.
A coin – a cryptocurrency with its own blockchain
Perhaps the most well-known example of a coin is bitcoin – the world’s biggest cryptocurrency.
The fact that a cryptocurrency is a coin means that it has its own blockchain.
Among these are both cryptocurrencies that have a completely unique blockchain – for example, ethereum and monero – and cryptocurrencies such as litecoin or bitcoin cash that are created by a so-called fork from an existing blockchain.
Another important thing to remember is that a coin is always a cryptocurrency.
Tokens are used in specific projects
The biggest difference between a token and a coin is that coins are designed to be used as a means of payment (although as of now they are more commonly used as investment instruments).
Tokens are designed for use in specific projects. It can be a computer game or as a means of payment within an app.
In addition, tokens are always built on an already existing blockchain, such as ethereum’s.
Tokens are not always cryptocurrencies, but they are if they can be used as a means of payment.
Virtual currencies – not cryptocurrencies
Virtual currencies are fairly easy to define as the EU has decided what it is.
It is money issued by a specific company for use in a specific project.
But that’s what tokens are, you think. No, tokens are based on a blockchain. Virtual currencies are not. Rather, these are the coins or points you can use in computer games like FIFA or World of Warcraft, according to Cointelegraph.
As always when it comes to languages it is important to remember that definitions are not set in stone and that they can change over time.