Token vs coin: what is the difference?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 4 min
In short
A coin has its own blockchain; a token is issued by a smart contract on someone else's chain. The distinction matters in practice because it determines which asset pays the fee and which network you must send to.
Key points
- A coin runs on its own chain
- A token is issued on an existing chain
- Token transfers are paid for in the host chain's coin
- Anyone can mint a token, so fakes exist
Definition
A coin is the native asset of its own blockchain; a token is an asset issued by a smart contract on another blockchain.
BTC is native to the Bitcoin chain and ETH to Ethereum — those are coins. An ERC-20 asset issued on Ethereum is a token: it borrows Ethereum's chain rather than running its own.
The practical difference shows up in fees. Sending an ERC-20 token costs ETH, so a wallet holding only the token cannot move it at all. 'I have the token but it won't send' almost always comes down to having no gas.
The other difference is how easily each is created. A coin needs a chain and a consensus mechanism; a token needs one contract deployment, which anyone can do. That is why fakes sharing a real project's name and symbol are everywhere, and why you verify the contract address before buying.
Watch out for
- · Multiple tokens can share one name and symbol — confirm the address from the project itself
- · Keep some of the host chain's native coin on hand, or you cannot move the token at all