Token vs coin: what's the difference?

Q: Token vs coin: what's the difference?

A Distinction Most People Blur Strictly speaking, a coin is the native asset of its own blockchain—BTC on Bitcoin, ETH on Ethereum, SOL on Solana. Coins are used to pay transaction fees and secure the network through mining or staking. A token is an asset issued on top of an existing blockchain via a smart contract—USDC, LINK, UNI, and most assets in DeFi are tokens, not coins. The distinction matters because the mechanics differ. Sending USDC on Ethereum still requires ETH for gas, because USDC has no native fee system of its own. Coins typically have fixed monetary policy baked into the protocol; tokens have whatever supply schedule the issuing contract defines, which can include minting, burning, and freezing—if the contract permits it. In casual usage the words are often interchangeable, and market data sites lump them together as cryptocurrencies. Within technical discussions or regulatory contexts the distinction sharpens. Token standards like ERC-20, ERC-721 (NFTs), and ERC-1155

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A Distinction Most People Blur

Strictly speaking, a coin is the native asset of its own blockchain—BTC on Bitcoin, ETH on Ethereum, SOL on Solana. Coins are used to pay transaction fees and secure the network through mining or staking. A token is an asset issued on top of an existing blockchain via a smart contract—USDC, LINK, UNI, and most assets in DeFi are tokens, not coins.

The distinction matters because the mechanics differ. Sending USDC on Ethereum still requires ETH for gas, because USDC has no native fee system of its own. Coins typically have fixed monetary policy baked into the protocol; tokens have whatever supply schedule the issuing contract defines, which can include minting, burning, and freezing—if the contract permits it.

In casual usage the words are often interchangeable, and market data sites lump them together as cryptocurrencies. Within technical discussions or regulatory contexts the distinction sharpens. Token standards like ERC-20, ERC-721 (NFTs), and ERC-1155 define how tokens behave on Ethereum. Other chains have analogous standards. Whenever you read about a new project, the first question worth asking is: is this a coin on its own chain, or a token deployed on an existing one?