Dissimilation between Coin and Token
Crypto coins basically have their own blockchain network or protocol. But tokens do not have their own network, they are created using any coin's blockchain. Coins are primarily designed for payment processing. Coining cryptocurrency is a bit time-consuming and difficult but creating tokens is very simple and can be done using the blockchain of any existing coin. What is created from each blockchain is a token. Each coin will have its blockchain, on top of which new tokens can be created.
Protocol/ Coin:
A protocol is a set of rules. Like Bitcoin, Ethereum is a type of protocol. Each protocol has its own defined rules. Each protocol defines which types of rules it accepts and which types of rules it does not. Some examples of coins are Bitcoin, BNB, Solana, Terra, etc.
What are these rules?
How the participants in the network will communicate with each other. That is, the protocol decides how the pairs included in the blockchain will communicate with each other.
The protocol defines how authentication will take place within a network, i.e. how it can be verified or validated.
The protocol describes how mining takes place and how miners are rewarded.
These are some sets of rules that define the protocol, these roles change from coin to coin. Bitcoin has its own set of rules, and Ethereum also has its own set of rules.
Now it's time to talk about coins. Each protocol provides some sort of coin. For example, Bitcoin is a protocol that provides some coins. In the case of Bitcoin, its protocol name is bitcoin and its coin name is also bitcoin but in the case of Ethereum, its protocol name is Ethereum and the coin name is Ether.
Token:
A token is a type of cryptocurrency that represents an asset or a specific use and resides on their blockchain. Each token has its blockchain. Ethereum, the web has its token. Examples: Tether, USD Coin, Cronos, Dai, etc. A token included in the Ethereum blockchain is Tether. And a token included in the Klaytn platform is BORA.
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VEIGO (Community Mod)
This article provides a clear and concise explanation of the difference between coins and tokens, making it easy to understand for anyone interested in cryptocurrency.