What is the difference between a token and a coin!?

 

First and foremost

• A coin is a currency on the blockchain.

A token is a smart-contract that is used on decentralized applications (dapps). All transactions made with tokens are later on broadcasted to the native blockchain.Different types of tokens
It took me some time to understand the difference between a token and a coin because i didn't really understand what a smart-contract was. Once i understood that better i also understood what kind of tokens there were and what purposes they had. The twoo main tokens are utility tokens and security tokens.

• Utility tokens
  These tokens are mainly used on one of many decentralized application on for example the Ethereum network and are only aquireable by an unregulated ico. Everbody can make its own token in less then 10min and put a product/service and marketing behind to make it a usefull utility token. 
•  Security tokens
  These tokens are a little different. They give ownership of an asset and is created for investors to make profit on. Security tokens can be raised with a regulated KYC offering instead of an unregulated ICO. Polymath is a great example of spreading security tokens. 

Example of a utility token
Now this may sound a little strange but tokens are very useful on porn sites... yes i know... Nowadays people have to purchase a premium membership on porn sites with their credit card. This automatically means their identity gets paired with the porn site and is no longer private information. This often makes it difficult for people to do apply themselves for such websites. A token however can solve this problem! People can buy Ethereum for example and buy tokens on the porn website with Ethereum in exchange. Since Ethereum is a decentralized and private currency it can't be tracked to a person's identity. That is what makes tokens so awesome!  



Conclusion

Again, I’d like to point out that i keep my educational posts as short as possible.

Best regards,

Sem