Coin vs Token: What Is the Difference?

A coin is the native unit of its own blockchain. Bitcoin.org describes the blockchain as a shared public ledger that the entire Bitcoin network relies on, and bitcoin units are recorded and moved on that ledger.

A token is created on an existing network by a piece of code called a smart contract. Its rules sit in that contract rather than in the network's base protocol, which is why a single network can host a large number of tokens.

The distinction tells you where an asset runs and how it is defined. It does not tell you whether the asset is safe or worth anything.

A coin is defined in a network's own protocol and circulates inside that network. BTC is the native unit of the Bitcoin protocol and does not depend on any smart contract, so this guide uses it as the reference example of a coin.

ETH plays the same role on Ethereum. Ethereum's own site says users pay transaction fees, known as gas, in ETH, and validators lock up ETH as collateral to confirm transactions. Tokens issued on Ethereum, by contrast, exist only because a contract on the network keeps their records.

A token is not the network's own unit; it is a unit that a contract running on the network keeps track of. Ethereum's ERC-20 page says that if a smart contract implements the standard's methods and events, it can be called an ERC-20 token contract.

How smart contracts work inside is beyond this guide. The practical point is that a token exists because a contract says so, so following a token means knowing which network its contract is deployed on.

The ERC-20 page defines a token by what its contract does, that is, the methods and events it implements, and not by who wrote or issued it. The page describes no approval or permission process for creating one.

Under the standard, each unit of a token is exactly the same in type and value as any other unit, a property known as fungibility. Units of the same token can therefore replace one another, though each contract can carry its own risks. The standard also includes an approve method, which lets an account allow a third party to spend a set amount of its tokens.

A name and a ticker do not identify a token uniquely. Different contracts can carry the same name or symbol: one may be the project's official contract and another a lookalike copy.

That is why a token is identified by its contract address and its network together. The first checks are whether the address appears in the project's own documentation and whether it can be found on that network's block explorer.

No, although neither protects against price swings. A coin's risks mostly concern the security and adoption of its own network. A token adds risks from its contract code, its ownership structure and the liquidity of the pools where it trades.

Those extra risks are not covered in detail here; the rug pull guide explains pulled liquidity and similar risks.

The Lzzo.com crypto list shows prices and price changes in US dollars. An asset's name or ticker alone does not reveal whether it is a coin or a token. For type and contract details, check the asset's own documentation and look up its address on the block explorer of the relevant network.