When discussing cryptocurrencies, the terms "coin" and "token" are frequently used interchangeably. Despite their apparent closeness, there is a distinction between the terms, and it is critical to distinguish them. A digital currency is created on its own blockchain and functions similarly to traditional cash. It may be used to store value and facilitate the exchange of goods and services between two business partners. Coins include the currencies Bitcoin and Litecoin.

Tokens and digital currency coins are distinct forms of digital assets within the blockchain ecosystem. Digital currency coins, such as Bitcoin and Ethereum, serve as native currencies on their respective blockchains, facilitating transactions and serving as stores of value. They are independent entities with their own networks and operate as mediums of exchange or stores of value.

On the other hand, tokens are created on existing blockchain platforms and represent various assets or utilities. They can signify ownership in a project, grant access to specific services, or even represent physical assets. Unlike coins, tokens are built on established blockchain infrastructures like Ethereum, Binance Smart Chain, or others, leveraging their existing functionalities. Tokens often adhere to specific standards (e.g., ERC-20 for Ethereum) and can be customized by developers.

In summary, while digital currency coins function as standalone currencies, tokens are created within existing blockchain frameworks, offering a wide range of use cases beyond mere transactions.