There are hundreds of coins in the crypto market and new ones being added each day. One of the most notable coins that many may know of is Bitcoin. Since Bitcoin is by far the largest cryptocurrency and employs the suffix “coin,” let’s define a coin as a digital asset that functions as a currency. Bitcoin is naturally considered a coin and not just because ‘coin’ is in the name. It’s considered a coin for all the right reasons. The fact that it’s paired with a blockchain, the ability for anyone to send, receive, or earn it, and finally, the fact that there is a private key tied to what may be your bitcoin wallet. Not one, but all three of these attributes are what makes bitcoin a coin, and not a token.
The key attributes of a coin include:
It’s tied to an open and publicly accessible blockchain.
Anyone can send, receive, and earn (mine) coins or fragments of coins through participation in the blockchain.
The owner has full control at all times, helped by a public and private key system tied to the cryptocurrency wallets.
A commonly known purpose of a coin is to enable commerce, so it is logical that there is a very strong network effect that drives them to higher market valuations. The more people that accept a certain coin, the more popular it becomes - creating a virtuous cycle of growth. Bitcoin is not the only ‘crypto-coin’ however, and there have been many alternatives or “alt-coins” that have made an appearance over the years - most of which emphasize entirely different characteristics than bitcoin and offer uses for people with secondary objectives.
Apart from Bitcoin, there are many Alternative coins with a variety of use cases, here are a few examples:
-Monero features transaction anonymity and privacy beyond bitcoin.
-Dash provides transaction privacy and is accepted by hundreds of online merchants around the world.
-IOTA emphasizes a new ecosystem concept of Internet of Things interactivity.
While anyone could technically create their own coin, creating one and programming a protocol to follow it is more complex than the average user may be able to do. Creating tokens on the other hand is a much easier process as you do not have to modify the codes from a particular protocol or create a blockchain from scratch. All you have to do is follow a standard template on the blockchain – such as that of Ethereum – that allows you to create your own tokens. This functionality of creating your own tokens is made possible through smart contracts which are programmable computer codes that are self-executing and do not need any third-parties to operate.