Hey everyone,
As someone still new to the crypto world, I’ve come across the terms "coins" and "tokens" a lot. At first, I honestly thought they meant the same thing — but after doing some reading and asking around, I finally get the difference.
I thought I’d share what I learned in a simple way to help other beginners avoid the confusion I had.
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Coins vs Tokens – Simple Breakdown:
Coins (e.g. Bitcoin, Litecoin, Ethereum)
They have their own blockchain.
-BTC runs on the Bitcoin blockchain.
-ETH runs on Ethereum.
-LTC runs on Litecoin’s chain.
Coins are usually used as currency — for transferring value, paying fees, or storing wealth.
You can think of coins as standalone currencies like dollars or euros in the crypto world.
Tokens (e.g. USDT, UNI, SHIBA, LINK)
They’re built on top of an existing blockchain.
Most tokens live on Ethereum or BNB Chain, using smart contracts.
Tokens rely on the coin's blockchain to operate.
Tokens can represent anything — currency, access rights, votes, NFTs, or even real-world assets.
So tokens are more like applications running inside a blockchain (like apps on a phone).
Why It Matters:
I used to just buy random tokens thinking they were like coins but now I realize:
If you’re buying a token, check what blockchain it's built on.
You’ll need the native coin (like ETH or BNB) to pay gas/fees when transferring that token.
Not all tokens are meant to be currencies. Some are used for voting, staking, or governance.
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Advice for Fellow Newbies:
If you’re just starting, try exploring a few top coins first to understand how native blockchains work. Then move into tokens to learn about smart contracts and dApps.
Also — always double-check what you're buying. A "coin" and a "token" may look the same on an exchange, but they behave differently behind the scenes.
Hope this helps someone who's where I was just a few weeks ago! If I missed something or misunderstood anything, I’d love to hear corrections from senior members.
Thanks to this amazing community for making learning crypto so much easier 🙏
— Shawheer
