What is the difference between a cryptocurrency token and a coin?
Hey, blockchain visionaries. I’m George Levy. Did you know that Bitcoin and Dogecoin are both coins, but Shiba Inu is a token? Yeah, they’re different. And in this video, I’m going to tell you what the difference is between a coin and a token in cryptocurrencies. If you’re not a subscriber to this channel, I invite you to hit subscribe and hit the bell. So you know, every single time I publish brand new videos, I publish every single week. And I would love to share this information with you. In this lesson, I’ll tell you exactly what’s the difference between a coin and a token. Let’s do it.
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In this lesson, we will be talking about the difference between a coin and a token. As you get involved into the world of cryptocurrencies, you will often come across the term coin, and sometimes you will hear the term token. In this lesson, I’ll explain to you the difference between both. To understand what a coin and a token are, let’s go over the definitions of each. A coin is a cryptocurrency that operates independently from any other platform. This will become clearer as I go through this lesson. For example, Bitcoin is a coin. Litecoin is a coin. Ether, that is the cryptocurrency that is on ethereum is a coin. All of these are coins because they operate independently from any other platform. By comparison, a token is a digital unit of cryptocurrency that requires another platform such as ethereum to exist and operate. What you will find is that there will be digital tokens that run ON Ethereum. And I will be explaining this to you as I will give you some concrete examples right now to do. So I’m going to go on a crypto field trip, and I’m going to look at one coin, in this case, Dogecoin, and I’m going to compare it to Shiba Inu, which is a digital token.
Let us now take a look at CoinMarketCap. This is one of the sites you should become most familiar with as it tracks the entire cryptocurrency market. As of the time that I’m recording this lesson for you, we have 13,954 cryptocurrencies. If you were to look today, you may probably find that that number is even higher. That’s because new cryptocurrencies are regularly added. Additionally I want to point out to you. The market cap is right now around $2.9 trillion, and these are all the cryptos. Now I’m going to show you how to use this site so you can actually look at the differences between coins and tokens and why it’s so important. First and foremost, what you’re seeing right now is all cryptocurrencies, and they are ranked right now by market cap from the highest market cap just dropping, dropping, dropping. Now, you have both coins and tokens being listed, but it is possible to filter them out. Let me show you how you can do that. What you can do is you can go to filters and you’ll find the option here to add a filter. That filter lets you list between coins and tokens.
For the purposes of this lesson, let me show you the difference. If I select just coins, what you will find is that we will now have Bitcoin, Ethereum. I talked to you about Dogecoin, I talked to you about Litecoin. All of these are coins. These are actually cryptocurrencies that don’t need any other cryptocurrency to exist. If you have a Bitcoin, Bitcoin doesn’t really rely on any other platform. If you have an Ether, Ether doesn’t really rely on any other platform other than Ethereum. Same thing with Litecoin. Litecoin has its own platform. In fact, if I go to Dogecoin, what you can find is that Dogecoin you even have the option to look at block explorers that will look at the Dogecoin blockchain. And I wanted to point that out to you because, as I mentioned, Dogecoin is a coin. Now, I’m going to actually sort out by tokens and I’m going to show you some key lessons I want you to learn. If I filter out and I add the filter cryptocurrencies, I go to Tokens, what you’ll find is that Bitcoin is no longer there, Litecoin is no longer there, Ethereum is no longer there.
Why? Because those are coins, these are tokens. And these tokens are actually built or created on top of another platform. So I wanted to show you the example of Shiba Inu to set the whole trend so you understand what I’m talking about. If I select Shiba Inu, what you will find is that it is ranked as a token. But I also have a smart contract that’s referenced here. Now, a smart contract for digital tokens means that you can create a digital token using a smart contract on a different platform. In this case, we’re creating the Shiba Inu token on top of Ethereum. So if I go to Etherscan, which is a block explorer just for Ethereum, what you find is that this is the contract that created the token called Shiba Enu. You will find that it is actually an ERC 20 token. I want to point out this to you because you’re going to run into ERC 20 tokens many times when you have an initial coin offering. For instance, those are typically ERC 20 tokens that are generated and then they’re made available for buying and selling. Shiba Inu is such a token, an ERC 20 token.
But I want to show you something very, very interesting, because creating an ERC 20 token is really not that complicated and anybody can actually do so. As a matter of fact, I’ve created my own ERC 20 token. I have a token called George Levy’s One Blockchain At A Time Token. And I created 2 billion of these One Blockchain At A Time Tokens. I want to point out this lesson for you, because often you may run into a new token that’s been issued and somebody will tell you, buy this token, buy this token. But I want to show you that it really isn’t that complicated to create a new token. So if and when you’re actually going to buy a token, do your due diligence. Make sure of what you’re buying. Because the reason why there’s so many cryptocurrencies is because it’s really not that complicated to create a cryptocurrency. Specifically, when you’re creating a digital token, just letting you know, because sometimes you may get an offer to buy a new token just because it’s new, just because it looks like another one that was successful or it’s going to be the next Bitcoin, watch out.
Because creating an ERC 20 token, for example, is really not that complicated. So what I want to show you is that there are other types of digital tokens as well. For example, you can run into what are known as Crypto Kitties. Crypto Kitties is a type of digital token. In this case, it’s an NFT or what’s an ERC 721 – that’s a different type of token. These ERC 721’s ones are what are known as non fungible tokens. And they’re built on top of Ethereum. I want to show you right now because this is my Crypto Kitty, Satoshi Catamoto, I’m the owner. And what you’ll find is is token number 701380. Well, I was able to go specifically within the smart contract for Crypto Kitties, and I looked up my specific token, 701380. And what’s interesting is I can even look inside the latest transaction. You’ll find my Crypto Kitty there. This is Satoshi Katamoto. And what you’ll find is that this token was transferred to this is actually the address to my cryptocurrency wallet. This is one of my cryptocurrency wallets and it is actually a digital token, an ERC 721 that was transferred to me.
So the key point I want to tell you is that the difference between these coins and tokens is that a coin stands alone. A coin can live on its own. Like a Bitcoin is merely a coin. Litecoin is a coin. Ether is a coin. But tokens such as Shiba Inu require a separate platform in order to exist. I hope you enjoyed this video and that you learned something in the process. I bring you brand new videos every single week, so make sure to subscribe to this channel. And if you have any questions or comments, please leave them below. I would love to hear from you. Until next time. I’m George Levy. We’re changing the world one blockchain at a time. See you next time.