COIN VS TOKEN Explained

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GM Wikerians, Let me quickly explain a coin and a token in blockchain for a 10-year-old kid.

Imagine you have a piggy bank where you keep your allowance money. Every time you get some money, you add it to your piggy bank.

The piggy bank is like a blockchain because it keeps track of all the money you put in it, just like a blockchain keeps track of all the transactions that happen on it.

Now, imagine you have two different kinds of coins in your piggy bank. One kind is a regular coin like a quarter or a dime. The other kind is a special coin that you made yourself, and you wrote your name on it. This special coin is like a token.

In the blockchain world, a coin is a digital asset that has its own blockchain, just like the regular coin in your piggy bank has its own value and can be used to buy things. Examples of coins are Bitcoin, Ethereum, Litecoin etc.

A token, on the other hand, is like the unique coin you made with your name on it. It’s a digital asset that runs on top of an existing blockchain, and it represents something else, like a digital certificate, a membership to a website, or even a ticket to a concert.

Examples of tokens are ERC-20 tokens on the Ethereum blockchain or BEP-20 tokens on the Binance Smart Chain like AXS, BNX etc

So, in summary, a coin is like a regular coin with its own value, while a token is like a special coin that represents something else and runs on top of an existing blockchain.

See also  What is Ethereum and how it works

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