In the world of cryptocurrencies, Token and Coin are often used interchangeably, but their fundamental differences are significant. To truly understand crypto asset investing, first clarify these two concepts.
Coin vs Token: What is the most fundamental difference?
Coins (tokens) have their own independent blockchain ecosystem. Bitcoin operates on the Bitcoin blockchain, and Ether operates on the Ethereum blockchain. They are the native assets of these networks, serving as the foundation of Layer-1.
Tokens, on the other hand, are assets that exist on existing blockchains. Tokens do not have their own blockchain but are issued on other public chains (mainly Ethereum). Since the launch of the ERC-20 standard in 2015, anyone can easily issue tokens on it, which is why today Ethereum has become the platform with the largest token issuance volume.