Currency or Token? Here is the real difference.

Many confuse these terms, but it is simpler than it seems.

The coins (Coins) have their own blockchain. Bitcoin, Ethereum, Litecoin… each one operates on its independent network. They are like pure digital money: they transfer directly between people and are recorded in a massive decentralized database.

Tokens are born on existing blockchains. Most are created on Ethereum thanks to smart contracts. Here’s the important part: they are not money, they are assets with specific functions.

There are four main types:

• Security Tokens: are like digital stocks or bonds. You buy them expecting profits. Regulated like traditional securities.
• Equity Tokens: represent ownership in a company. Few projects have attempted this because the regulation is confusing.
• Utility Tokens: give you access to a service or application. For example, the token of a platform to use its network.
• Payment Tokens: they are only used for payment, they look like coins but technically they are securities, not real cryptocurrencies.

In summary: coins are the native money of their blockchain. Tokens are smart contracts built on existing blockchains with specific uses beyond being money.