Token vs Coin: What's the Difference? (Complete Guide 2025)

The terms "token" and "coin" are often used interchangeably in cryptocurrency, but they actually refer to two different types of digital assets. Understanding this distinction is crucial before creating your own cryptocurrency, as it determines which blockchain you'll use and what tools are available.

In this comprehensive guide, we'll break down the exact differences, explain when to use each, and provide real-world examples to make this concept crystal clear.

The Simple Answer

What is a Cryptocurrency Coin?

A coin (also called a "native coin" or "cryptocurrency") operates on its own independent blockchain network. The coin is fundamental to that blockchain's operation and is used to pay transaction fees, reward validators/miners, and maintain network security.

Key Characteristics of Coins:

• Own blockchain: Bitcoin runs on Bitcoin blockchain, Ethereum on Ethereum blockchain, etc.
• Native currency: Used for paying gas fees on that network
• Mining/Staking: Coins are typically mined or staked to secure the network
• Foundation layer: Other tokens can be built on top of coin blockchains

Examples of Coins:

What is a Cryptocurrency Token?

A token is a digital asset built on top of an existing blockchain. Tokens don't have their own blockchain but instead leverage the infrastructure of established networks like Ethereum, Solana, or Polygon.

Important: When you create a cryptocurrency using no-code tools, you're almost always creating a token, not a coin. This is because building your own blockchain is extremely complex and expensive.

Key Characteristics of Tokens:

• Built on existing blockchain: Uses infrastructure of another network
• Smart contract-based: Created using smart contracts (ERC-20, SPL, BEP-20)
• Gas fees in native coin: Pay fees in the blockchain's native coin (ETH, SOL, etc.)
• Easier to create: No need to build entire blockchain infrastructure

Examples of Tokens:

Token vs Coin: Side-by-Side Comparison

Which Should You Create: Token or Coin?

For 99% of creators, the answer is: create a TOKEN.

When to Create a Token:

• ✅ You want to launch quickly: Tokens can be created in minutes
• ✅ Limited budget: Tokens cost $0.01-$200 vs $100,000+ for coins
• ✅ No technical team: No-code tools make token creation accessible
• ✅ Standard use cases: Utility, governance, memecoins, community tokens
• ✅ Want to leverage existing ecosystem: Use established blockchains' infrastructure

When You Might Need a Coin (Rare):

• ❌ Need custom blockchain features: Unique consensus mechanism
• ❌ Enterprise-scale project: Millions in funding, dedicated development team
• ❌ Building new Layer 1: Creating foundation for other projects
• ❌ Specific regulatory requirements: Some jurisdictions require separate blockchain

Reality check: Even major projects like Uniswap, Chainlink, and most DeFi protocols use tokens, not coins. Creating your own blockchain (coin) is almost never necessary for individual creators or small teams.

Token Standards Explained

Tokens follow specific standards depending on which blockchain they're built on:

ERC-20 (Ethereum)

The most common token standard. Used for fungible tokens on Ethereum and Ethereum-compatible chains (Polygon, Base, Arbitrum, etc.).

• Examples: USDC, UNI, LINK, SHIB
• Blockchains: Ethereum, Polygon, Base, Arbitrum, Optimism
• Gas fees: Paid in ETH (or native chain coin)

SPL (Solana)

Solana's token standard, equivalent to ERC-20 but built for Solana's high-speed architecture.

• Examples: USDC on Solana, BONK, WIF
• Blockchain: Solana
• Gas fees: Paid in SOL (ultra-low: ~$0.00025)

BEP-20 (BNB Smart Chain)

Binance Smart Chain's token standard, compatible with ERC-20.

• Examples: Most tokens on PancakeSwap
• Blockchain: BNB Smart Chain
• Gas fees: Paid in BNB

Real-World Examples

Example 1: Dogecoin - Is it a Coin or Token?

Answer: It's actually a COIN! Dogecoin has its own blockchain (forked from Litecoin). However, most "memecoins" inspired by Doge are actually tokens built on Ethereum or Solana.

Example 2: Shiba Inu (SHIB)

Answer: It's a TOKEN! SHIB is an ERC-20 token built on Ethereum. It uses ETH for gas fees and relies on Ethereum's infrastructure.

Example 3: Uniswap (UNI)

Answer: It's a TOKEN! UNI is an ERC-20 governance token. Even though Uniswap is a major DeFi protocol worth billions, they use a token, not a separate coin.

Common Confusions

Practical Implications for Token Creators

Choosing Your Blockchain

Since you're creating a token, you need to choose which blockchain to build on:

• Ethereum: Most established, high fees ($50-$200), largest ecosystem
• Polygon: Ethereum-compatible, low fees ($0.01-$0.50), good for beginners
• Solana: Ultra-low fees ($0.00025), very fast, great for memecoins
• Base: Coinbase's chain, low fees, growing ecosystem
• BNB Smart Chain: Low fees, PancakeSwap integration

Tools You'll Use

Since tokens use smart contracts, you'll use platforms like:

• Thirdweb - Multi-chain token creator
• Moralis - Full Web3 platform
• OpenZeppelin - Secure contract templates

These tools create tokens (not coins) because they deploy smart contracts on existing blockchains.

Conclusion

Understanding the difference between tokens and coins is fundamental:

• Coins have their own blockchain (rare, expensive, complex)
• Tokens are built on existing blockchains (common, affordable, accessible)
• For creators: You'll almost always create a token using no-code tools

When people search for "how to create a crypto coin," they're usually looking to create a token. The good news is that tokens are easier, cheaper, and faster to create—perfect for most use cases!