What is Coin, Token, Stablecoin?

In the world of cryptocurrencies, the terms “token,” “coin,” and “stablecoin” are often used and confused with each other. Today we will explain what this trio represents and how they differ from each other.

A coin is a digital currency that operates on its own blockchain platform. BTC, ETH, ZEPH, XNA, and QRL are all coins. Simply put, a coin is a virtual coin, a piece of code, a ledger that contains information and can be transferred between users.

There are also altcoins (alternative coins), which, without delving too deeply, are coins of other blockchains created in the likeness of Bitcoin. Roughly speaking, everything that is not Bitcoin is an altcoin.

Only coins and altcoins can be mined because mining is the process of adding new blocks to the blockchain network, which is a key element for most coins. At MiningOcean you can find all the coins that we provide for mining.

Now, what is a token? Tokens are often confused with coins, but unlike coins, tokens are not the native currency of a blockchain. A token is a digital asset issued on an existing blockchain platform. For example, Ton is a blockchain that has its own Toncoin. But on this platform, anyone can create their own token. All fees and costs for creating tokens are paid in Toncoin. For example, the Notcoin token was created on the Ton network. However, Notcoin is not the native currency of the Ton blockchain, but is merely created on its base. Therefore, it is a token. Its very simple. Tokens can represent various assets, such as ownership rights, access to a service, or even a share in a company. They are also more versatile in terms of their purpose and usage.

So why do we need tokens if there are coins? First of all, creating a coin requires a lot of effort to develop a blockchain platform. Not everyone can do this, and not everyone needs to. But creating a token is very simple, and you don’t need to maintain the infrastructure.

The last thing to clarify is what are stablecoins? A stablecoin is a type of cryptocurrency that is pegged to the value of a traditional asset, such as the US dollar, euro, gold, or other assets. Simply put, a stablecoin is a subtype of coins or tokens that is pegged to the value of a traditional asset to maintain a stable price. For example, USDT (Tether) or USDC (USD Coin) are pegged to the US dollar, ensuring price stability (1$), unlike coins and tokens, which are highly volatile. Stablecoins are used for transactions, capital storage without the risk of loss, and as a medium of exchange within cryptocurrency ecosystems.

Consolution

A coin operates on its own blockchain platform and is used as a full-fledged currency.

A token is issued on an existing blockchain platform and can represent a variety of assets or rights.

A stablecoin is a subtype of coins or tokens that is pegged to the value of a traditional asset to maintain a stable price.

What to use depends only on your goals. Have a good day!